simplebooklet thumbnail

THINGS TO CONSIDER WHEN BUYING A HOME
THINGS TO CONSIDER WHEN  BUYING A HOME
TABLE OF CONTENTS 1 4 REASONS TO BUY A HOME THIS SUMMER 3 YOU NEED A PROFESSIONAL WHEN BUYING A HOME 4 DON T LET RISING RENTS TRAP YOU 6 THE TOP REASONS WHY AMERICANS BUY HOMES 7 HOME PRICES OVER THE LAST YEAR 8 BUYING A HOME CONSIDER COST NOT JUST PRICE 9 HARVARD 5 FINANCIAL REASONS TO BUY A HOME 10 BUILDING FAMILY WEALTH OVER THE NEXT 5 YEARS 11 WHAT YOU NEED TO KNOW ABOUT THE MORTGAGE PROCESS 12 GETTING A MORTGAGE WHY SO MUCH PAPERWORK 13 WHAT DO YOU ACTUALLY NEED TO QUALIFY FOR A MORTGAGE 15 YOU CAN SAVE FOR A DOWN PAYMENT FASTER THAN YOU THINK 16 THE COST OF RENTING VS BUYING INFOGRAPHIC 17 4 DEMANDS TO MAKE ON YOUR REAL ESTATE AGENT 19 REAL ESTATE AGAIN SEEN AS BEST INVESTMENT
TABLE OF CONTENTS 1  4 REASONS TO BUY A HOME THIS SUMMER   3  YOU NEED A PROFESSIONAL WHEN BUYING A HOME  4  DON   T LET R...
4 REASONS TO BUY A HOME THIS SUMMER Here are four great reasons to consider buying a home today instead of waiting 1 Prices Will Continue to Rise CoreLogic s latest Home Price Index reports that home prices have appreciated by 6 7 over the last 12 months The same report predicts that prices will continue to increase at a rate of 5 3 over the next year The Home Price Expectation Survey polls a distinguished panel of over 100 economists investment strategists and housing market analysts Their most recent report projects home values to appreciate by more than 3 2 a year for the next 5 years The bottom in home prices has come and gone Home values will continue to appreciate for years Waiting no longer makes sense 2 Mortgage Interest Rates Are Projected to Increase Freddie Mac s Primary Mortgage Market Survey shows that interest rates for a 30 year mortgage have remained around 4 Most experts predict that they will begin to rise over the next 12 months The Mortgage Bankers Association Freddie Mac the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by this time next year An increase in rates will impact YOUR monthly mortgage payment A year from now your housing expense will increase if a mortgage is necessary to buy your next home KEEPINGCURRENTMATTERS COM 1
4 REASONS TO BUY A HOME THIS SUMMER  Here are four great reasons to consider buying a home today instead of waiting. 1. Pr...
3 Either Way You are Paying a Mortgage As a paper from the Joint Center for Housing Studies at Harvard University explains Households must consume housing whether they own or rent Not even accounting for more favorable tax treatment of owning homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return That s yet another reason owning often does as Americans intuit end up making more financial sense than renting 4 It s Time to Move On with Your Life The cost of a home is determined by two major components the price of the home and the current mortgage rate It appears that both are on the rise But what if they weren t Would you wait Look at the actual reason you are buying and decide whether it is worth waiting Whether you want to have a great place for your children to grow up you want your family to be safer or you just want to have control over renovations maybe it is time to buy If the right thing for you and your family is to purchase a home this year buying sooner rather than later could lead to substantial savings KEEPINGCURRENTMATTERS COM 2
3. Either Way You are Paying a Mortgage As a paper from the Joint Center for Housing Studies at Harvard University explain...
YOU NEED A PROFESSIONAL WHEN BUYING A HOME Many people wonder whether they should hire a real estate professional to assist them in buying their dream home or if they should first try to do it on their own In today s market you need an experienced professional You Need an Expert Guide if You Are Traveling a Dangerous Path The field of real estate is loaded with land mines You need a true expert to guide you through the dangerous pitfalls that currently exist Finding a home that is priced appropriately and ready for you to move into can be tricky An agent listens to your wants and needs and can sift out the homes that do not fit within the parameters of your dream home You Need a Skilled Negotiator In today s market hiring a talented negotiator could save you thousands perhaps tens of thousands of dollars Each step of the way from the original offer to the possible renegotiation of that offer after a home inspection to the possible cancellation of the deal based on a troubled appraisal you need someone who can keep the deal together until it closes Realize that when an agent is negotiating their commission with you they are negotiating their own salary the salary that keeps a roof over their family s head the salary that puts food on their family s table If they are quick to take less when negotiating for themselves and their families what makes you think they will not act the same way when negotiating for you and your family If they were Clark Kent when negotiating with you they will not turn into Superman when negotiating with the buyer or seller in your deal Bottom Line Famous sayings become famous because they are true You get what you pay for Just like a good accountant or a good attorney a good agent will save you money not cost you money KEEPINGCURRENTMATTERS COM 3
YOU NEED A PROFESSIONAL WHEN BUYING A HOME Many people wonder whether they should hire a real estate professional to assis...
DON T LET RISING RENTS TRAP YOU There are many benefits to homeownership One of the top ones is being able to protect yourself from rising rents while locking in your housing cost for the life of your mortgage Don t Become Trapped Jonathan Smoke Chief Economist at realtor com recently reported on what he calls a Rental Affordability Crisis He warns that Low rental vacancies and a lack of new rental construction are pushing up rents and we expect that they ll outpace home price appreciation in the year ahead The Joint Center for Housing Studies at Harvard University recently released their 2015 Report on Rental Housing in which they reported that 49 of rental households are cost burdened meaning they spend more than 30 of their income on housing These households struggle to save for a rainy day and pay other bills such as food and healthcare It s Cheaper to Buy Than Rent In Smoke s article he went on to say Housing is central to the health and well being of our country and our local communities In addition this rental affordability crisis threatens the future value of owned housing as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home KEEPINGCURRENTMATTERS COM 4
DON   T LET RISING RENTS TRAP YOU There are many benefits to homeownership. One of the top ones is being able to protect y...
While more than 85 of markets have burdensome rents today it s perplexing that in more than 75 of the counties across the country it is actually cheaper to buy than rent a home So why aren t those unhappy renters choosing to buy Know Your Options Perhaps you have already saved enough to buy your first home HousingWire reported that analysts at Nomura believe It s not that Millennials and other potential homebuyers aren t qualified in terms of their credit scores or in how much they have saved for their down payment It s that they think they re not qualified or they think that they don t have a big enough down payment emphasis added Many first time homebuyers who believe that they need a large down payment may be holding themselves back from their dream home In many areas of the country a first time home buyer can save for a 3 down payment in less than two years You may have already saved enough Bottom Line Don t get caught in the trap so many renters are currently in If you are ready and willing to buy a home find out if you are able Let s get together to determine if you are eligible to get a mortgage KEEPINGCURRENTMATTERS COM 5
   While more than 85  of markets have burdensome rents today, it   s perplexing that in more than 75  of the counties acr...
THE TOP REASONS WHY AMERICANS BUY HOMES The inaugural Homebuyer Insights Report released by Bank of America reveals the reasons why consumers purchase homes and their feelings regarding homeownership Consumer Lending Executive D Steve Boland explained Homebuyers today are motivated by both emotional and practical reasons Nearly all want more space but a majority of homebuyers especially those purchasing their first home are also looking for a place to call their own put down roots and make memories They value the emotional benefits of owning a home as much as the financial ones top graph Boland went on to say The path to homeownership is a journey and can be as overwhelming as it is exciting For many people this is the single most significant financial transaction they will ever make This was evidenced in the report when they asked today s homebuyers to define homeownership Their answers tell the whole story and are on the right Bottom Line Homeownership has always been a part of the American Dream and survey after survey confirms this will always be the case KEEPINGCURRENTMATTERS COM 6
THE TOP REASONS WHY AMERICANS BUY HOMES The inaugural    Homebuyer Insights Report    released by Bank of America, reveals...
HOME PRICES OVER THE LAST YEAR Every quarter the Federal Housing Finance Agency FHFA reports on the year over year changes in home prices Below you will see that prices are up year over year in every region Year over Year Prices Regionally Looking at the breakdown by state you can see that each state is appreciating at a different rate This is important to know if you are planning on relocating to a different area of the country Waiting to move may end up costing you more Year over Year Prices By State KEEPINGCURRENTMATTERS COM 7
HOME PRICES OVER THE LAST YEAR Every quarter, the Federal Housing Finance Agency  FHFA  reports on the year-over-year chan...
BUYING A HOME CONSIDER COST NOT JUST PRICE As a seller you will be most concerned about short term price where home values are headed over the next six months As a buyer you must be concerned not about price but instead about the long term cost of the home The Mortgage Bankers Association MBA the National Association of Realtors NAR and Freddie Mac all project that mortgage interest rates will increase by nearly a full percentage point by this time next year According to CoreLogic s most recent Home Price Index Report home prices will appreciate by 5 3 over the next 12 months What Does This Mean as a Buyer Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately 250 000 today if home prices appreciate by the 5 3 predicted by CoreLogic over the next twelve months Mortgage Interest Rate Payment P I Today 250 000 3 64 1 142 24 Q2 2017 263 250 4 6 1 349 54 Difference in Monthly Payment 207 30 Monthly Annually Over 30 Years 207 30 2 487 60 74 628 KEEPINGCURRENTMATTERS COM 8
BUYING A HOME  CONSIDER COST NOT JUST PRICE As a seller, you will be most concerned about    short term price        where...
HARVARD 5 FINANCIAL REASONS TO BUY A HOME Eric Belsky is the Managing Director of the Joint Center of Housing Studies JCHS at Harvard University He authored a paper on homeownership The Dream Lives On the Future of Homeownership in America In his paper Belsky reveals five financial reasons why people should consider buying a home Here are the five reasons each followed by an excerpt from the study 1 Housing is typically the one leveraged investment available Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money As a result homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity With many buyers putting 10 percent or less down their leverage factor is 10 or more Difference in Monthly Payment 2 You re paying for housing whether you own or rent Homeowners pay debt service to pay down their own principal while households that rent pay down the of a landlord principal 3 Owning is usually a form of forced savings Since many people have trouble saving and have to make a housing payment one way or the other owning a home can overcome people s tendency to defer savings to another day 4 There are substantial tax benefits to owning Homeowners are able to deduct mortgage interest and property taxes from income On top of all this capital gains up to 250 000 are excluded from income for single filers and up to 500 000 for married couples if they sell their homes for a gain 5 Owning is a hedge against inflation Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation making owning an attractive proposition Bottom Line We realize that homeownership makes sense for many Americans for many social and family reasons It also makes sense financially KEEPINGCURRENTMATTERS COM 9
HARVARD  5 FINANCIAL REASONS TO BUY A HOME Eric Belsky is the Managing Director of the Joint Center of Housing Studies  JC...
BUILDING FAMILY WEALTH OVER THE NEXT 5 YEARS As the economy continues to improve more and more Americans are seeing their personal financial situations also improving Instead of just getting by many are now beginning to save and find other ways to build their net worth One way to dramatically increase their family wealth is through the acquisition of real estate For example let s assume a young couple purchased and closed on a 250 000 home in January What will that home be worth five years down the road Pulsenomics surveys a nationwide panel of over one hundred economists real estate experts and investment market strategists every quarter They ask them to project how residential prices will appreciate over the next 5 years According to their latest survey here is how much value that 250 000 home will gain in the coming years Over a five year period that homeowner can build their home equity to over 40 000 And in many cases home equity is a large portion of a family s overall net worth Bottom Line 43 198 potential growth in family wealth over the next five years based solely on increased home equity 293 198 285 212 276 905 268 840 260 000 250 000 January 2016 January 2017 January 2018 January 2019 January 2020 January 2021 Increased home equity based on price appreciation projected by the Home Price Expectation Survey If you are looking to better your family s long term financial situation buying your dream home might be a great option KEEPINGCURRENTMATTERS COM 10
BUILDING FAMILY WEALTH OVER THE NEXT 5 YEARS As the economy continues to improve, more and more Americans are seeing their...
Source Freddie Mac KEEPINGCURRENTMATTERS COM 11
Source  Freddie Mac  KEEPINGCURRENTMATTERS.COM  11
GETTING A MORTGAGE WHY SO MUCH PAPERWORK Why is there so much paperwork mandated by lenders for a mortgage loan application when buying a home today It seems that they need to know everything about you and require three separate sources to validate each and every entry on the application form Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago There are two very good reasons that the loan process is much more onerous on today s buyer than perhaps any time in history 1 The government has set new guidelines that now demand that the bank prove beyond any doubt that you are indeed capable of paying the mortgage During the run up in the housing market many people qualified for mortgages that they could never pay back This led to millions of families losing their homes The government wants to make sure this can t happen again 2 The banks don t want to be in the real estate business Over the last seven years banks were forced to take on the responsibility of liquidating millions of foreclosures and also negotiating another million short sales Just like the government they don t want more foreclosures For that reason they need to double maybe even triple check everything on the application However there is some good news in the situation The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a mortgage interest rate probably around 4 The friends and family who bought homes ten or twenty years ago experienced a simpler mortgage application process but also paid a higher interest rate the average 30 year fixed rate mortgage was 8 12 in the 1990 s and 6 29 in the 2000 s If you went to the bank and offered to pay 7 instead of below 4 they would probably bend over backwards to make the process much easier Bottom Line Instead of concentrating on the additional paperwork required let s be thankful that we are able to buy a home at historically low rates KEEPINGCURRENTMATTERS COM 12
GETTING A MORTGAGE  WHY SO MUCH PAPERWORK  Why is there so much paperwork mandated by lenders for a mortgage loan applicat...
WHAT DO YOU ACTUALLY NEED TO QUALIFY FOR A MORTGAGE Fannie Mae recently released their What Do Consumers Know About The Mortgage Qualification Criteria Study The study revealed that Americans are misinformed about what is really required to qualify for a mortgage when purchasing a home To help correct these misunderstandings let s take a look at the survey results compared to the latest Ellie Mae Origination Insight Report which focuses on recently approved loans Survey Results vs What s Really Required 59 of Americans either don t know 54 or are misinformed 5 about what FICO score is necessary to qualify Many Americans believe a good credit score is 780 or higher 54 of approved mortgages had a credit score of 600 749 KEEPINGCURRENTMATTERS COM 13
WHAT DO YOU ACTUALLY NEED TO QUALIFY FOR A MORTGAGE  Fannie Mae recently released their    What Do Consumers Know About Th...
76 of Americans either don t know 40 or are misinformed 36 about the minimum down payment required Many believe that they need at least 20 down to buy their dream home New programs actually let buyers put down as little as 3 Bottom Line Whether buying your first home or moving up to your dream home knowing your options will definitely make the mortgage process easier Your dream home may already be within your reach KEEPINGCURRENTMATTERS COM 14
76  of Americans either don   t know  40   or are misinformed  36   about the minimum down payment required. Many believe ...
YOU CAN SAVE FOR A DOWN PAYMENT FASTER THAN YOU THINK In a study conducted by Builder com researchers determined that nationwide it would take nearly eight years for a first time buyer to save enough for a down payment on their dream home Depending on where you live median rents incomes and home prices all vary By determining the percentage of income a renter spends on housing in each state and the amount needed for a 10 down payment they were able to establish how long in years it would take for an average resident to save According to the study residents in South Dakota are able to save for a down payment the quickest in just under 3 5 years On the right is a map created using the data for each state What if you only needed to save 3 What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3 down programs Suddenly saving for a down payment no longer takes 5 or 10 years but becomes attainable in under two years in many states in the map on the right Bottom Line Whether you have just started to save for a down payment or have been for years you may be closer to your dream home than you think KEEPINGCURRENTMATTERS COM 15
YOU CAN SAVE FOR A DOWN PAYMENT FASTER THAN YOU THINK In a study conducted by Builder.com, researchers determined that nat...
KEEPINGCURRENTMATTERS COM 16
KEEPINGCURRENTMATTERS.COM  16
4 DEMANDS TO MAKE ON YOUR REAL ESTATE AGENT Are you thinking of buying a home Are you dreading having to walk through strangers houses Are you concerned about getting the paperwork correct Hiring a professional real estate agent can take away most of the challenges of buying A great agent is always worth more than the commission they charge just like a great doctor or great accountant You want to deal with one of the best agents in your marketplace To do this you must be able to distinguish an average agent from a great one Here are the top 4 demands to make of your real estate agent when buying a home 1 Tell the Truth About the Price Too many agents just take your offer at any price and then try to work both you and the seller while negotiating later Demand that the agent prove to you that they have a belief in the price you are offering Make them show you their plan to get both the seller and the bank to accept that price Every house in today s market must be sold twice first to you and then to your bank The second sale may be more difficult than the first The residential appraisal process has gotten tougher A recent survey showed that there was a challenge with the appraisal on 24 of all residential real estate transactions It has become more difficult to get the banks to agree on the contract price A red flag should be raised if your agent is not discussing this with you at the time of the original offer KEEPINGCURRENTMATTERS COM 17
4 DEMANDS TO MAKE ON YOUR REAL ESTATE AGENT Are you thinking of buying a home  Are you dreading having to walk through str...
2 Understand the Timetable with Which Your Family is Dealing You will be moving your family into a new home Whether the move revolves around the start of a new school year or a new job you will be trying to put the move to a plan This can be very emotionally draining Demand from your agent an appreciation for the timetables you are setting Your agent cannot pick the exact date of your move but they should exert any influence they can to make it work 3 Remove as Many of the Challenges as Possible It is imperative that your agent knows how to handle the challenges that will arise An agent s ability to negotiate is critical in this market Remember If you have an agent who was weak negotiating with you on parts of the purchase offer don t expect them to turn into a superhero when they are negotiating with the seller for you and your family 4 Find the Right HOUSE There is a reason you are putting yourself and your family through the process of moving You are moving on with your life in some way The reason is important or you wouldn t be dealing with the headaches and challenges that come along with purchasing Do not allow your agent to forget these motivations Make sure that they don t worry about your feelings more than they worry about your family If they discover something needs to be done to attain your goal insist they have the courage to inform you Good agents know how to deliver good news Great agents know how to deliver tough news In today s market YOU NEED A GREAT AGENT KEEPINGCURRENTMATTERS COM 18
2. Understand the Timetable with Which Your Family is Dealing You will be moving your family into a new home. Whether the ...
REAL ESTATE AGAIN SEEN AS BEST INVESTMENT The Gallup organization recently released a survey in which Americans were asked to rank what they considered to be the best long term investment Real estate ranked number one which 35 of those surveyed saying it was a better long term investment than stocks mutual funds gold savings accounts or bonds Here is the breakdown Even stock investors ranked real estate number one According to the report With housing prices showing a steadier path upward in recent months even stock investors are about as likely to choose real estate 37 as stocks 32 as the best long term investment KEEPINGCURRENTMATTERS COM 19
REAL ESTATE AGAIN SEEN AS BEST INVESTMENT The Gallup organization recently released a survey in which Americans were asked...
CONTACT ME TO TALK MORE I m sure you have questions and concerns I would love to talk with you more about what you read here and help you on the path to buying a home My contact information is below I look forward to hearing from you Awesome Agent RE MAX Platinum Realty RemaxAgentMickey Gmail com www SucceedWithMickey com 941 704 1484 facebook com SarasotaRemaxAgent Insert Your Photo
CONTACT ME TO TALK MORE I   m sure you have questions and concerns    I would love to talk with you more about what you re...