Real Estate

Some Owners Don’t Even Change Batteries in Fire Alarms

NAR Daily News Magazine - October 22, 2018 - 12:00am

Survey reveals key safety measures many consumers fail to take to secure their properties against damage.

Categories: Real Estate

4 Signs You’re Not Ready to Be a Homeowner—and What to Do About It

RisMedia Buying 101 - October 21, 2018 - 12:00pm

(TNS)—Buying a home is a major life milestone, right up there with snagging a dream job or finding true love. Your heart might be set on becoming a homeowner, but red flags might indicate you’re not yet ready to make the leap.

For many, particularly millennials, homeownership represents much more than a financial investment. In a recent Homes.com survey on millennial attitudes toward home-buying, 74 percent of millennials equate homeownership with stability. Although it will likely take them longer to meet their goal, 68 percent of millennial respondents said they’re likely to buy a home at some point in the future, the survey found.

Whether it’s too much debt, a lack of savings or a roving lifestyle, there are several reasons why potential homeowners might want to delay a home purchase. Here are four of them—and advice on how to overcome these obstacles.

  1. You Have Too Much Debt
    To get approved for a mortgage, you must show you can handle all of the expenses of owning a home (including the ones that aren’t rolled into your monthly mortgage payments). You also have to meet your other financial obligations, and that might be a challenge if you already have a mountain of debt on your plate, says Jennifer Beeston, branch manager and vice president of Mortgage Lending with Guaranteed Rate.

“A lot of people approach buying a home in terms of what’s the max they can afford,” Beeston says. “With lenders’ guidelines getting looser, some will accept a debt-to-income ratio of up to 50 percent, but that’s based on your mortgage payment and debts that show up on your credit report in relation to gross income.”

Beeston adds that DTI calculations don’t take into account expenses such as schooling, daycare, income taxes, healthcare and retirement savings.

How to overcome it: Pay down your debt to a manageable level. If you’ve accumulated a lot of debt over time, consider a personal loan to consolidate them into one streamlined, and preferably lower-interest, monthly payment. And avoid getting sucked into a new debt trap by cutting spending and diligently paying down debt. A debt consolidation calculator can help you determine how to strategically consolidate and pay down your debt.

  1. Your Credit Isn’t Stellar
    Your credit history and credit score are closely linked to the mortgage pricing you’ll receive—and that impacts your monthly payments for the life of the loan, says Dan Green, CEO of Growella, a mortgage news and advice website. A good starting point is to give yourself a credit check-up to see where you stand.

“If your credit score is not optimal, you’ll pay more for a mortgage,” Green says. “Your credit score today will have a huge impact on the homes you’re looking at and can afford. It may be sensible to wait to buy and work on your credit.”

Let’s do a quick calculation for two borrowers applying for a 30-year, fixed-rate mortgage for $300,000 with 10 percent down. Jen has an excellent credit score and was offered a 4.75 percent interest rate, and Sarah, who has a lower score, was offered a 5 percent interest rate. Sarah’s monthly payments are roughly $41 more than Jen’s, but where she really gets dinged is in overall interest paid. She’ll pay nearly $15,000 more in interest of the loan’s lifetime because she didn’t get a lower interest rate.

How to overcome it: To boost your credit score, pay your credit cards and other debts on time. Ideally, credit cards should be paid off in full every month. Avoid opening new credit lines unless you’re establishing a credit history. Finally, keep your credit utilization ratio to 30 percent or less of your available credit limit for each credit account. In other words, your balances shouldn’t exceed 30 percent of your maximum credit limits.

If you’re emotionally and mentally ready to buy a home, there’s likely a home you can buy. The catch: you might have to settle for less than your ideal home if your credit and finances impact what you qualify for, Green points out.

  1. You Don’t Have Enough Savings
    Buying a house comes with a lot of upfront expenses that go beyond your monthly mortgage payment. Expect to pay 2 percent to 4 percent of a home’s purchase price in closing costs. Plus, there’s the down payment (anywhere from 3 percent to 20 percent of the purchase price, depending on your loan type) and moving expenses to factor in.

But it’s the hidden costs of homeownership that take many new homeowners by surprise. These might include homeowners association dues, condo/assessment fees, routine maintenance, utility bills and major repairs. Ideally, homeowners should save roughly 1 percent of the home’s purchase price each year for maintenance expenses, says Adam Smith, president of the Colorado Real Estate Finance Group.

Many people don’t have that kind of cash on hand. A recent Bankrate survey found that just 39 percent of Americans would pay for a $1,000 unexpected expense from savings.

How to overcome it: To save more, pay yourself first by depositing a set amount from each paycheck into a savings account. If you have to start small, that’s OK. Consider opening a high-yield savings account to accrue interest on your cash. Cut back on unnecessary spending such as monthly subscription services, eating out, impulse shopping and other financial vices. Depending on your income and credit profile, you may qualify for homebuyer assistance programs that can help you pay for down payment and closing costs for a home.

  1. You Want a Carefree Lifestyle
    If you’re someone who moves frequently, buying a home might not make financial or practical sense. Lifestyle plays a huge role in the decision to rent versus buy, Smith says. Remember that the bigger the house, the more maintenance and upkeep. If you want to keep things low-key, buying a condo or continuing to rent might make more sense until you’re ready for more responsibility.

Another thing to consider if you don’t tend to sit still: It might be a hassle to sell your home or rent it out eventually. Home values can go up or down over time so there are no guarantees that you’ll be able to sell.

How to overcome it: Take time to consider your lifestyle factors that impact your housing choices, including whether you plan to move around a lot, your ability keep up with and pay for ongoing maintenance, your commute and current or future family needs. And take care with buying a house with a partner if you don’t share similar financial and life goals, Beeston says.

“Don’t rush to buy a house because you’re reacting to a life event,” Beeston says. “Take your time. It’s a big purchase, and there’s no guarantee you’ll get what you paid—or more—for it.”

©2018 Bankrate.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

Report: Most Homeowners Say They Have ‘Good Neighbors’

NAR Daily News Magazine - October 19, 2018 - 12:00am

Consumers reveal the qualities they appreciate most in the people living next door—but say cultivating a friendship isn’t necessary.

Categories: Real Estate

Tech Firm to Pay $3M Over Poor Tenant Screenings

NAR Daily News Magazine - October 19, 2018 - 12:00am

“You shouldn’t get turned down for an apartment because someone has the wrong information about you,” the Federal Trade Commission says.

Categories: Real Estate

How Well Does Your State Cater to Middle-Class Buyers?

NAR Daily News Magazine - October 19, 2018 - 12:00am

Rising home prices have hit the average buyer hard, but in some states, there’s an easier and more affordable path to homeownership.

Categories: Real Estate

Sellers Brace for Stiffer Competition as Buyers Retreat

NAR Daily News Magazine - October 19, 2018 - 12:00am

With affordability pressure sidelining more house hunters, sellers can expect a longer timeline to unload their homes. Read more from NAR’s latest report.

Categories: Real Estate

Borrowers Finally See Some Relief With Mortgage Rates

NAR Daily News Magazine - October 19, 2018 - 12:00am

“The modest decline in mortgage rates is a welcome respite from the rapid increase in rates the last few weeks,” says Freddie Mac’s chief economist.

Categories: Real Estate

Where Buyers Stand to Save the Most in Mortgage Costs

NAR Daily News Magazine - October 18, 2018 - 12:00am

It’s worth it to shop around for a mortgage, and some places pay off more than others.

Categories: Real Estate

Calif. Firms Respond to Call for More Women in Leadership

NAR Daily News Magazine - October 18, 2018 - 12:00am

The commercial real estate industry is mostly dominated by males, but a new mandate in the Golden State hopes to spark change. 

Categories: Real Estate

Homebuilding Struggles to Break Out of Funk

NAR Daily News Magazine - October 18, 2018 - 12:00am

The housing market may be in search of much-needed inventory, but it’s not likely to come from new-home construction.

Categories: Real Estate

Could Your Sellers Use a Staging Concierge?

NAR Daily News Magazine - October 18, 2018 - 12:00am

Getting a home ready to sell can be a pain. To ease this load for homeowners, some brokerages are offering competing programs that help get a listing ready.

Categories: Real Estate

On the Watch List: 10 Housing Markets Poised for Appreciation

NAR Daily News Magazine - October 17, 2018 - 12:00am

Find out where homeowners likely will see the biggest increases in equity over the next 12 months.

Categories: Real Estate

Coliving Craze? Developers Think So

NAR Daily News Magazine - October 17, 2018 - 12:00am

Developers are betting big that more consumers want to live in a coliving space.

Categories: Real Estate

How to Create a Welcoming Entryway

NAR Daily News Magazine - October 17, 2018 - 12:00am

Don’t discount this prime spot in your staging. “Entryways set a tone for the rest of the house,” says one interior designer.

Categories: Real Estate

Discover the Home’s Past the Seller Won’t Tell You

NAR Daily News Magazine - October 17, 2018 - 12:00am

Some states don’t require sellers to disclose property stigmas, such as violent crime that occurred on the premises or paranormal activity. Here’s how you can help buyers uncover the truth.

Categories: Real Estate

Study: ‘Green’ Homes Sell for More, Depending on the Agent

NAR Daily News Magazine - October 16, 2018 - 12:00am

For sellers giving their homes environmentally friendly upgrades, recent studies show the owners' profit at resale may also rely on their chosen real estate professional.

Categories: Real Estate

Warning Signs That Your Client Is Getting Cold Feet

NAR Daily News Magazine - October 16, 2018 - 12:00am

As a real estate professional, how can you tell if your buyer or seller is about to bail on a deal?

Categories: Real Estate

Stacking Up Yard Sizes by State

NAR Daily News Magazine - October 16, 2018 - 12:00am

The average residential lawn in America is about a quarter of an acre, but the number can vary greatly depending on where you live.

Categories: Real Estate

America’s 5 Most Historic Cities ‘May Hold Value Better’

NAR Daily News Magazine - October 15, 2018 - 12:00am

Some home buyers may be drawn to the cachet of owning a property with a rich historical past, but there are more benefits than status.

Categories: Real Estate

Is Using Equity to Delay Social Security a Good Strategy?

NAR Daily News Magazine - October 15, 2018 - 12:00am

Some older homeowners are taking out reverse mortgages to fund their daily living expenses while shoring up more financial benefits from the government. But the ramifications of this are unclear.

Categories: Real Estate

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