Ready to Become a Homeowner?

31 05 2017

What to Keep in Mind as You Leave Renting Behind

Each year, millions of Americans purchase a home. In 2015, that was about 5.2 million, according to the National Association of Realtors, and about 35% of them were first-time buyers. If you’re anything like those millions, you’ve been waiting for the moment you finally feel ready to become an owner yourself. You’ve probably carefully considered your budget, your rising rent, and your future prospects — do you plan to move or have kids in the next few years? Can you get by with a two-bedroom, or should you spring for three?

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While you’re weighing your needs with your means, there are a few other components of the transition to keep in mind.

1. Down Payment

Surely you haven’t overlooked this massive expense, which remains one of the biggest obstacles for hopeful homebuyers. Although you can negotiate the terms of your loan, depending on your credit score, you should plan to have 10% to 20% of your future home’s value saved up for a down payment — plus a few thousand more so you can be prepared for unanticipated repairs or other financial hiccups. If that seems impossible, the Federal Housing Administration has a program for first-time homebuyers, offering loans with down payments as low as 3.5%. However, with that small deposit comes larger monthly payments, and a larger amount paid by the end of the loan. Smaller down payments also result in another monthly cost: private mortgage insurance, which lenders sometimes require to protect themselves from loss.

2. Closing Costs

Yes — there’s even more cash that comes into play when you finalize your home purchase. The down payment goes toward the home’s value, but then there is also a cluster of smaller fees that get thrown into the “closing costs” bucket: loan origination fee, credit report, loan underwriter, home inspection and appraisal, title search, survey fee, and taxes (on the sale, not property taxes), and other assorted fees delineated by your real estate agent. Fortunately, you’re not looking at another $30,000 — unless you’re planning to buy a $1.5 million home. Your closing costs will typically add up to between 2% and 5% of the home’s value.

3. Insurance

As a renter, you probably paid a monthly insurance premium to make sure your personal belongings were protected in the event of a fire or other accident (at least you should have). And those premiums were probably pretty cheap. Your homeowners insurance premiums, however, will be quite a bit higher, and that’s because it has more to cover aside from the extra square footage. Homeowners insurance will financially protect you from damages incurred to your home, and all of your belongings inside of it, from damage caused by wind, hail, ice, fire, and more.

4. Taxes

This is another one of the costs that discourages a lot of renters when they begin to consider owning. But property taxes don’t have to be scary, or even that expensive. Familiarize yourself with the local tax rate before the purchase, and then set aside money in an escrow account each month so that you have enough to make the payment when it comes due, instead of scrambling into your savings. Many lenders require this escrow account. When they’re due — and how often — depends on your location, but the average U.S. household pays just over $2,000 in annually.

5. Maintenance

Time to start filling up that garage: Get a lawnmower, shovel, weedwacker, rake, or any other implement you’ll need to keep your property attractive and safe in every season. Additionally, plan to spend about 1% of your home’s value on annual maintenance projects, which can range from new batteries for your smoke detector to replacing your hot water heater or significant replumbing. Even brand-new houses aren’t immune to maintenance costs, so keep a devoted savings account at the ready — and don’t overlook your duties. Create (or find) a maintenance checklist and schedule to stay on top of important upkeep.

This article was provided by Sam Radbil, a contributing member of the marketing and communications team at ABODO. ABODO Gainesville apartments was founded in 2013 and is headquartered in Madison, Wisconsin.
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Pending Home Sales Hit a 10-Year High in April

28 05 2016

Pending home sales rose for the third consecutive month in April and reached their highest level in over a decade, according to the National Association of Realtors® (NAR).

All major regions saw gains in contract activity last month except for the Midwest, which saw a meager decline.

The Pending Home Sales Index – a forward-looking indicator based on contract signings for homes that have not yet sold – hiked 5.1 percent higher to 116.3 in April from an upwardly revised 110.7 in March. Year-to-year, it’s 4.6 percent above April 2015 (111.2).

After last month’s gain, the index has now increased year-over-year for 20 consecutive months. Vast gains in the South and West propelled April’s pending sales in April to its highest level since February 2006 (117.4), says Lawrence Yun, NAR chief economist.

“The ability to sign a contract on a home is slightly exceeding expectations this spring, even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” Yun says. “The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market.”

Mortgage rates have remained below 4 percent in 16 of the past 17 months, but Yun says it remains to be seen how long they will stay this low. Along with rent growth, rising gas prices – and the fading effects of last year’s cheap oil on consumer prices – could edge up inflation and push rates higher. For now, Yun foresees mortgage rates continuing to hover around 4 percent in coming months, but inflation could potentially surprise the market and cause rates to increase suddenly.

“Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search,” adds. Yun.

Following the housing market’s best first quarter of existing-sales since 2007 (5.66 million) and a decent increase (1.7 percent) in April, Yun expects sales this year to climb above earlier estimates and be around 5.41 million – a 3.0 percent boost from 2015. After accelerating to 6.8 percent a year ago, national median existing-home price growth is forecast to slightly moderate to between 4 and 5 percent.

Pending sales in the Northeast climbed 1.2 percent to 98.2 in April, and are now 10.1 percent above a year ago. In the Midwest, the index declined slightly (0.6 percent) to 112.9 in April, but it’s still 2.0 percent above April 2015.

Pending home sales in the South jumped 6.8 percent to an index of 133.9 in April – 5.1 percent higher than last April. The index in the West soared 11.4 percent in April to 106.2, and it’s now 2.8 percent above a year ago.

Source: National Association of Realtors





Clint Eastwood is Moving to Jacksonville, Florida

7 03 2016

I saw this in the news yesterday. In a big surprise to everyone in Los Angeles, Hollywood actor Clint Eastwood reveals in a new interview that he is moving to the Jacksonville, Florida area. He tells the magazine that he is “tired of the California lifestyle” and is looking for a big change in life.

“I’m just tired of the California lifestyle and the fake people, honestly, and I feel like, at this point in my life, I’d rather just live in a place full of real, genuine people. I’ve been to Jacksonville a few times over the years and the people there are real… they’re genuine, and yeah every community has its problems but the people there are good, decent people and they care about their community. Those are the things I find most important in deciding where to live,” Eastwood told the magazine.

“I’m not retiring, I’m just looking for a change in life and I think I’ve found that in Jacksonville, Florida,” Eastwood reassured fans. Let us know what you think in the comments section below especially if you’re a resident of the Jacksonville, Florida area.





June Home Starts Surge – Highest Pace in 28 Years

18 07 2015

The U.S. Commerce Department announced that housing starts in June climbed 9.8 percent to a seasonally adjusted annual rate of 1.17 million homes. All of that growth came from a 28.6 percent surge in multi-family housing that put apartment construction at its highest rate since November 1987. Starts for single-family houses slipped 0.9 percent last month.

U.S. builders broke ground on apartment complexes in June at the fastest pace in nearly 28 years, as developers anticipate that recent job gains will launch a wave of renters.

The gains show that what had been a sluggish construction sector is now running on economic adrenaline. Strong job growth and a rebounding economy have increased the numbers of buyers and renters searching for homes, while gradually rising mortgage rates have spurred homeowners to finalize deals.

Housing starts jumped 35.3 percent in the Northeast because of apartments, while climbing 13.5 percent in the South. Home construction slumped in the Midwest and West in June.

Nationwide, housing starts have risen 10.9 percent year-to-date.

Over the past 12 months, employers have added 2.9 million jobs, meaning there are more people with paychecks to spend across the broader economy. The impact of those job gains and the unemployment rate drop to 5.3 percent has surfaced in housing, where demand is outpacing the supply of homes and creating more pressure to build houses and apartments.

The market for new homes for sale had just 4.5 months of supply in May, compared to 6 months in a healthy market.

Approved building permits increased 7.4 percent to an annual rate of 1.34 million in June, the highest level since July 2007. The bulk of that increase came for apartment complexes, while permits for houses last month rose just 0.9 percent.

There are other signs that builders are increasingly optimistic.

The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday climbed to 60 this month, a level last reached in November 2005 – shortly before the housing boom gave way to the mortgage crisis that triggered the Great Recession. Readings above 50 indicate more builders view sales conditions as good rather than poor.

Mortgage rates have started to rise, although they remain low by historic standards.

Source: The Associated Press





U.S. New-Home Sales in May Climb to Best Levels Since 2008

24 06 2015

Purchases of new U.S. homes surged in the Northeast and West in May, as steady job growth over the past year has lifted the real estate sector.

The Commerce Department said that new-home sales rose 2.2 percent in May 2015 to a seasonally adjusted annual rate of 546,000, the strongest pace in more than seven years.

Sales of new homes have soared 24 percent year-to-date, helped by the additional incomes from the employers hiring 3.1 million workers in the past 12 months and relatively low mortgage rates. The sharp increase in purchases could help drive more employment in the construction sector and broader economic growth, potentially offsetting the setbacks to growth in the manufacturing sector caused by cheaper oil prices and a stronger dollar that has hurt exports.

Last month’s sales gains were concentrated in the Northeast, where sales jumped 87.5 percent. New-home sales increased 13.1 percent in the West, but slipped in the Midwest and South.

The median sales price has fallen slightly, dipping 1 percent over the past 12 months to $282,800.

The increases have caused the supply of new homes to dwindle to 4.5 months, compared to the six months’ supply generally associated with a healthy market.

Still, homebuilders are preparing to meet this demand, having broken ground on more houses this year and plan to continue construction. Approved building permits rose increased 11.8 percent to an annual rate of 1.28 million, the highest level since August 2007, the Commerce Department reported last week.

Existing homes are also seeing strong sales as the economy continues to muscle up.

Sales of existing homes climbed 5.1 percent in May to a seasonally adjusted annual rate of 5.35 million, the National Association of Realtors said Monday. Tight supplies have lifted prices, which have climbed 7.9 percent over the past 12 months to an average of $228,700, about $1,700 below the July 2006 peak.

Much of the increased buying activity flows from a stronger job market and relatively affordable mortgage rates.

Borrowing costs are low by historical standards, but they have been rising in recent weeks at a speed that might prompt more people to buy homes.

Average 30-year fixed rates were 4 percent last week, according to the mortgage giant Freddie Mac. That average has increased from a 52-week low of 3.59 percent.

Soure: Associated Press





U.S. existing home sales rise in December but down for 2014

24 01 2015

U.S. home resales rose slightly in December but fell overall for the year, the first annual drop since 2010 and another sign that the housing market recovery remains uneven amid expectations of a pick-up in 2015.

The National Association of Realtors said existing home sales increased 2.4 percent to an annual rate of 5.04 million units last month. That was slightly below economists’ expectations for a 5.06-million-unit pace.

“The still-tight mortgage credit conditions and more challenging first-time homebuyer affordability that were revealed by the failure of home sales to continue recovering last year remain serious concerns as we head into 2015,” said Ted Wieseman, an economist at JPMorgan in New York.

First-time buyers made up 29 percent of transactions in December as well as for the year as a whole, well below the level needed to boost growth in the housing market.

For all of 2014, existing home sales fell 3.1 percent, the first annual drop in four years. The housing market has struggled to maintain momentum since stagnating in the second half of 2013 following a run-up in mortgage rates.

At December’s sales pace it would take 4.4 months to clear all available houses from the market, down from 5.1 months in November and the lowest since January 2013.

However, a decline in mortgage rates, an easing of lending standards and the resurgent health of the U.S. economy over the last few months has spurred optimism that sales could strengthen this year.

And the outlook for the economy remains upbeat. In a separate report the Conference Board said its Leading Economic Index rose 0.5 percent last month after a 0.4 percent increase in November.

December’s jump was driven by gains in most of the index’s components, suggesting the short-term outlook is getting brighter and the economy continues to build momentum, the Conference Board said.

Source: Reuter





Delinquent Homeowners Two Years Behind on Mortgage Payment Can Now Qualify For Loan Modification

21 10 2014

Florida borrowers two or more years late on their mortgage payments could get another chance to save their homes following a change in loan modification rules by the Federal Housing Finance Agency.

Federal mortgage backers Fannie Mae and Freddie Mac announced the elimination of an eligibility cap that forbid loan modifications to people with delinquencies of 720 days or more.

The change was made to the “streamlined modification” program, which was created in 2013 and billed as a more automatic route to lower mortgage payments because no application or exchange of paperwork is required.

It’s estimated that nearly half of borrowers nationwide who are ineligible because of the 720-day cap, would otherwise be able to get a loan modification through the program, according to the Federal Housing Finance Agency.

Lenders must comply with the cap elimination by April 1, 2015, but are being encouraged to make the change immediately. Borrowers who were previously denied a streamlined modification because they were more than two years late on payments must be reevaluated, according to letters sent to lenders and mortgage servicers Oct. 1.

“We’ve had multiple clients receive approvals under this program,” said Paul Baltrun, director of corporate development for the Law Office of Paul A. Krasker in West Palm Beach. “It’s very little paperwork, mostly just phone conversations with the lender, and the turn time is quicker.”

The streamlined modification program was developed because of consistent complaints from borrowers that banks repeatedly lose loan modification paperwork in a bureaucratic process that can take years to complete. Banks have also said obtaining the correct employment and payment documents from borrowers can be a hurdle in completing a modification.

Under the program, lenders send contracts to borrowers with new payment amounts. The modification could include a fixed interest rate, an extension of the loan to 40 years, and possibly deferring a portion of the debt owed to the end of the loan so it’s not included in current payment calculations.

Also, borrowers are encouraged to apply for other loan modification plans, such as the Home Affordable Modification Program, which could offer a better deal.

If the borrower agrees and makes three on-time payments, the modification becomes permanent.

Baltrun said it’s hard to gauge how many people the change will affect. Although the worst of the foreclosure crisis is over, he said a significant number of homeowners are still looking for modifications because they have lost jobs, or have used up their savings trying to stay in their home.

“I think it will help a small number of people in specific circumstances,” said Baltrun, who believes removing the cap is a good change. “Why would someone who is 721 days late be declined when someone who is 719 days late is approved?

Other eligibility requirements for the streamlined modification include homeowners must be at least 90 days late on their mortgage and can’t have more than 20 percent equity in their home.

About 3 percent of Florida homeowners with mortgages were 90 days late or more on payments during the second quarter of this year, according to the Mortgage Bankers Association. Nearly 10 percent were either 90 days delinquent, or in foreclosure.

While that’s still the second highest foreclosure and serious delinquency rate in the nation behind New Jersey, it’s an improvement from where Florida was at the end of 2011 when 18 percent of mortgages were in the same position.

Streamlining modifications is increasingly important in Florida where foreclosure courts are moving cases more quickly through the system. That means less time for negotiating with the bank before a final foreclosure judgment is issued.

“You can’t even keep people in their homes very long anymore,” said Deerfield Beach-based attorney Bonnie Lynn Canty, who defends foreclosures. “Used to be four years out before you were looking at a (foreclosure) sale date. Now, it’s at the most two years.”

Source: Palm Beach Post, Bloomberg BusinessWeek








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