Homeowners At A Young Age

Fannie Mae, in a recently released study, states that consumer attitudes continue to be favorable about homeownership, particularly with the younger generations, ages 18 to 34. Slightly over half of them think that owning makes more sense than renting when comparing the financial and lifestyle benefits.

90% of aspiring owners expect to purchase a home someday and slightly over half think they’ll do it within five years. The primary challenges are having sufficient savings and the difficulty of getting a mortgage today. Younger renters see renting as a temporary stepping stone toward homeownership.

Homeowners are far more likely than renters to be “very positive” about their housing experience. Some of the benefits identified are:

• Having control over what you do with your living space 
• Having a sense of privacy and security 
• Having a good place for your family or to raise your children 
• Having the best investment plan 
• Living in a nicer home 
• Building up wealth 
• Saving for retirement 
• Living in a place where you and your family feel safe 
• Feeling engaged in your community

To satisfy a buyer’s doubts about qualifying for a mortgage, make an appointment with a trusted mortgage professional. If you’d like a recommendation at no cost or obligation, please contact me at kexcell@triplettcompanies.com.  Check out this Rent vs. Own to see the real cost of owning a home.

For more information about the Fannie Mae survey in presentation form, Click Here.

Mortgage Relief Act

Many times a homeowner might feel relieved being out from under the obligation of a mortgage they can’t afford even though the property was lost due to foreclosure or short sale. If a lender cancels or forgives debt, a taxpayer must include the cancelled amount in their income for tax purposes depending on the circumstances. The tax significance could be serious.
Congress enacted the Mortgage Relief Act specifically to help homeowners who might be affected in the housing crisis that started approximately in 2007. The Act expired on 12/31/12 but was temporarily extended by Congress until December 31, 2013.
This relief only applies to a taxpayers’ principal residence which does not include second homes and investment property. The maximum amount is limited to $2 million of mortgage debt forgiveness or $1 million if filing separately.
Another provision is that the debt relief is limited to acquisition indebtedness used to buy, build or improve the property. It excludes cash equity loans whether made separately or in a refinance of the original mortgage.
Due to the serious consequences involved in short sales and foreclosures, it is advised that homeowners faced with this possibility should seek expert advice from their legal and tax professionals.

Homeowners Are More Positive

Fannie Mae, in a recently released study, states that consumer attitudes continue to be favorable about homeownership, particularly with the younger generations, ages 18 to 34. Slightly over half of them think that owning makes more sense than renting when comparing the financial and lifestyle benefits.
90% of aspiring owners expect to purchase a home someday and slightly over half think they’ll do it within five years. The primary challenges are having sufficient savings and the difficulty of getting a mortgage today. Younger renters see renting as a temporary stepping stone toward homeownership.
Homeowners are far more likely than renters to be “very positive” about their housing experience. Some of the benefits identified are:

• Having control over what you do with your living space
• Having a sense of privacy and security
• Having a good place for your family or to raise your children
• Having the best investment plan
• Living in a nicer home
• Building up wealth
• Saving for retirement
• Living in a place where you and your family feel safe
• Feeling engaged in your community

To satisfy a buyer’s doubts about qualifying for a mortgage, make an appointment with a trusted mortgage professional. If you’d like a recommendation at no cost or obligation, please contact me at kexcell@triplettcompanies.com.  Check out this Rent vs. Own to see the real cost of owning a home.
For more information about the Fannie Mae survey in presentation form, Click Here.

Win Over the Buyer

It’s interesting that the housing climate has changed so quickly. Some buyers, who think they’re still in the driver’s seat, find the market is now going up and they’re losing the home that they really want.
Multiple offers are increasingly more common and buyers are frustrated because even full-price offers don’t guarantee that they’re going to get the home. In an effort to personify a contract offer and add emotional appeal, buyers are including a personal letter to the seller.
In most cases, the seller wants to maximize the net proceeds from the sale by getting the highest price with the least expenses and an assurance that the home will actually close on time without surprises. When a seller is faced with multiple offers that may be close to the same net, an emotional appeal might make the difference in them accepting a particular offer. That’s where the letter comes in play.
It should be a relatively short letter that gets to the point. The tone of the letter should be humble while positive and definitely, shouldn’t mention that you may have lost other homes due to multiple offers.

1. Try to identify a common feature or characteristic of the home that is important to the seller and you.
2. Don’t criticize the home or tell them about all of the improvements you need to make to justify your offer.
3. Do verbalize why living in this home is important to you and your family.
4. Assure the seller that you can indeed qualify for the home and that if they accept your offer, the sale will be consummated.

After writing the letter and eliminating the non-essential parts, read the letter a few times to your spouse or friend. Polish the verbiage and check the spelling and grammar. If your handwriting isn’t attractive and easy to read, print it. Use nice paper to appeal to the tactile senses. Attach the letter to the offer so they’re considered simultaneously.
Being pre-approved with good credit, adequate financial resources, good employment, sufficient earnest money and a reasonable offer with minimum contingencies will favorably position you. A personal letter might be the deciding factor in your favor.

How to: Seller Accept Your Offer

As the market shifts from a buyer's market, it's good to know how to improve your chances to have the seller accept your offer.

Once you decide on a home, don't waste time; write an offer and submit it as soon as possible. Competing with another buyer happens more frequently than you'd expect. Multiple offers are a seller's advantage but here are some tips to level the playing field:

• Realistic offer - don't give the impression you're trying to "steal" the property. Submit comparable sales that justify your offer.
• Pre-approval letter - this satisfies seller's biggest concern that an unqualified buyer will unnecessarily take the home off the market and the seller will lose other opportunities.
• More earnest money - it shows you're serious and makes the seller feel like the contract will actually close.
• Minimize contingencies - from a seller's standpoint, each contingency is one more reason why the sale won't go through. They feel the home is "off the market" and they're in limbo.
• Shorten inspection period - your agent can help you set a reasonable date but let the seller know you're willing to close prior to that if possible.
• Write a personal letter to the seller telling them why you want their home - this can be the emotional connection to the seller that makes the difference in you getting the home.

A seller wants to feel confident that the offer they accept will actually close so they can plan for their next move. Following tips like these can definitely affect negotiations and help put together an offer that is more likely to be accepted.

Be a Better Homeowner

Better Homeowners The 3.5% down payment on FHA loans could be more expensive for buyers than expected. Beginning April 1, 2013, the mortgage insurance premium will go up by .1% to 1.35% which may not even be noticeable to most would-be homeowners. The staggering increase will occur on 6/3/2013 when FHA's policy on the duration of the required mortgage insurance will be increased for the life of the mortgage. It basically doubles the amount of total MIP if the loan is paid to term.  Example: Purchase Price $175,000 with 3.5% down payment at 4% mortgage rate on 30 year term Current After 6/3/13 MIP duration 78% of original loan Life of mortgage Cumulative premium $20,838.24 $42,447.93 Currently, the MIP is required for approximately 9 years 9 months with normal amortization. The new program would require the MIP for the life of the loan. In this example, the initial monthly MIP is $196.88 which decreases based on amortization. There are buyers that qualify on income and credit who may not have the necessary additional down payment required for 80% and 90% conventional loans. The 3.5% FHA program has provided a great vehicle to get into a home with a minimum amount of cash. For homeowners that expect to stay in their home for ten years or less, the new changes might not have much financial impact. Homeowners who expect to be in their home long term can refinance with a conventional loan without mortgage insurance once the equity has increased due to amortization and appreciation. For buyers to avoid these increases, they will need to act now to get the FHA commitment issued prior to these change dates.

Painting Your Walls? Find Your Color!

What’s Your Apartment Color Personality?

Paint your bedroom a soft color like green to feel more relaxed.

Color is one of the most important elements in life, and has a big effect on an individual’s mood and frame of mind. Decorating your apartment with color can be the best way to customize and create a space that’s all your own. But have you ever wondered what your choice of color means about you? Read on to find more about what your go-to decorative shade reveals about your apartment color personality.
Start your apartment search today!
Bold colors
Red is the strongest of all colors, and is indicative of excitement, warmth, vibrancy and high energy. Red is a very bold, in-your-face color that says a lot about an individual who chooses to decorate an apartment with it: confidence, no-nonsense and strong willed. Powerful and stimulating, decorating an apartment with red can really make it stand apart.
Yellow expresses happiness and optimism, and you might be a glass half full type of person if you choose to decorate with this bright, cheery color.
Decorating with orange can be risky, but those who incorporate elements of this tangerine shade in apartment decorating can generally be confident, social and adventurous.
Cool colors
Blue is one of the most popular decorating colors, and those who gravitate towards blue tend to be patient and understanding, as well as sensitive, wise and gracious.
Green is a color that denotes harmony and balance, and those drawn to green are often creative and mature types.
Fans of purple are often introverted yet open minded. If you are drawn to purple, chances are there’s a lot going on underneath the surface that you’re not letting onto. There’s more than meets the eye with purple types.
Neutral colors
People who favor black tend to enjoy the finer things in life, as this color is elegant, refined and sophisticated. A color that never goes out of style, lovers of black are often timeless and way beyond their years.
The use of white in decorating an apartment can be a bold move, as white is a color that is characterized by stark emptiness. Implying a sense of cleanliness and purity, those who gravitate towards white prefer simplicity and minimalism.
Brown conveys solidness and steadfastness. A subtle and masculine color, those who choose to incorporate brown into decorating are often responsible and dependable.
Gray is a very serene and composed color, and those who favor gray tend to be calm and reserved.


 Credit: iStockphoto/DanielBendjy 
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Mortgage That Best Suites You

The low interest rates secured by borrowers recently on FHA mortgages may become valuable in a different way in the future. FHA and VA mortgage are assumable at the existing interest rates subject to buyer qualification.
Buyers wanting to assume an existing FHA mortgage must be owner-occupants and meet the current FHA guidelines. Applicants should have a minimum 600 credit score, total debt with house payment to be assumed not to exceed 41% of their monthly gross income and meet other standard income, credit and qualifying requirements.
The benefits are not only assuming a lower interest rate resulting in lower payments but the closing costs on an assumption are much less than originating a new loan. The fact that the mortgage is already into an amortization schedule and that lower interest rate loans amortize faster than higher interest rate loans make it build equity faster than a new mortgage.
When interest rates eventually rise, assumptions will provide an opportunity for buyers to lower their cost of housing significantly while improving their wealth positions.

Single-Family Homes

Single-family homes used for rental property have distinct advantages over other types of investments.
An investor can borrow 75-80% at fixed interest rates on appreciating assets with definite tax advantages and reasonable control. The financing alone is attractive compared to some investments that require 50% cash and have floating rates at prime plus for one or two years.
Home prices have adjusted 30-40% around the country, mortgage rates are incredibly low and rents have risen in the past two years due to more demand and shorter supply. Indicators like these point to a strong and sustained rental market.
Consider you bought a $125,000 home for cash that would rent for $1,250 per month. With $15,000 income and allowing for property taxes, insurance and maintenance, it is still reasonable to expect $10,000 net income. You'd have an 8% return on investment without considering tax savings or future appreciation compared with 5-year CDs paying less than 1.5% and a 10-year Treasury yield at 1.65%.
The reasonable control has a lot of appeal to many investors who find the volatility of the stock market unacceptable and don't want the risk associated with some of the alternative investments. Please contact me if you'd like to know more about available opportunities.

Your Dream of Owning a Home is Possible

The American Dream of owning a home is still alive. People still want a place of their own; where they can raise their family; share with their friends; feel safe and secure. Homeownership creates emotional and financial benefits.
The government supports that dream by allowing deductions for mortgage and home equity interest as well as property taxes. The capital gains exclusion on profits from a home is incredibly generous and a low long-term capital gains tax rate applies to excess profits.
It's reported that some of the social benefits of owning a home include higher voter participation, better physical health, higher student test scores, lower teen delinquency, neighborhood stability and pride in the community.
If for no other reason, the decision to buy a home should be considered when it costs much less to own a home than it does to rent. With the unusually low available mortgage rates, the payment is generally less than comparable rent. However, the decision becomes more obvious when the other benefits are considered like amortization, appreciation and tax savings.
It's not uncommon for the net cost of housing to be half of the actual mortgage payment. In most cases, it is significantly more to rent than to own which could amount to more than the down payment in the first year alone. Calculate your cost of Renting vs. Owning.

FDR's New Deal

A 30 year fixed-rate mortgage hasn't always been the standard. As part of FDR's New Deal in 1934, the Federal Housing Administration was created to help Americans purchase homes with affordable terms.
Prior to then, many loans had an amount due at the end of the term called a balloon. Most mortgages had adjustable interest rates even though some might be fixed for a short time. While banks would loan money on a home, they retained the right to call the note due at any time which could exert considerable stress on borrowers.
FHA, during this time, introduced mortgages that offered a fixed rate of interest to the borrower for a 30 year term. This fully amortized loan provided borrowers a financial vehicle that would help them achieve the American Dream while minimizing the risk of having a loan called without the resources to pay it off. It brought long-term stability to the housing market and helped stimulate the economic recovery at a very difficult time in our nation's history.
Roughly, a third of the mortgages created in 2011 were less than 30 year terms. Many homeowners, similar to those after the Great Depression, would like to get their home paid for as soon as possible. Shorter term mortgages typically have a lower interest rate but higher payments due to fewer years to amortize the mortgage.

Primary Factors For Investment

Rental properties have four primary factors that contribute to a return on investment. Based on market conditions and investor strategies, the individual motivating factor can change for property owners.
There was a time when the benefit of tax savings to offset income from other sources was considered important to some investors. However, in today's environment, they are more likely valued as incidental benefits.
Some investors expect appreciation to deliver the satisfactory results which can be reasonable over time if a reliable appreciation rate is used. Savvy investors today are using conservative estimates for long-term holding periods.
Leverage occurs when borrowed funds are used to control a larger asset. Positive leverage can actually increase the yield on an investment.
The fourth component that contributes to a property's yield is the cash flow. When the rents are greater than the expenses of operating the property and servicing the debt, there is a positive cash flow. A property with a good cash flow doesn't have to go up in value to justify the investment.
The combination of lower prices, incredibly low mortgage rates and rising rents are attracting investors to rental properties that include single-family homes in predominantly owner-occupied neighborhoods.
Even if you were to ignore the benefits of tax savings, potential appreciation and leverage, the attractive cash flows make rental property a very smart investment alternative. If you're curious, contact me for more information.

Owning a Home

Most people agree that homeownership rules! When asked, people say they want a home they can call their own, to raise their family, share with their friends and to feel safe and secure. It also accounts for the majority of most people's net worth.
These rules can help protect your investment and make homeownership more enjoyable.

1. Don't overpay for your home
2. Maintain your home's condition
3. Minimize your assessed value to lower property taxes
4. Make extra principal contributions to save interest and build equity
5. Validate the insured value of improvements and contents
6. Stay current on surrounding property values
7. Make mortgage interest payments deductible
8. Invest in capital improvements that increase market value
9. Don't over-improve the neighborhood
10. Keep records of capital improvements and other maintenance

We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between.

The Silent Killer

Carbon monoxide is colorless, odorless and toxic. It's called the "silent killer" in homes because some victims are not even aware that the deadly condition exists.

Homeowners must be concerned about unmaintained furnaces, water heaters and appliances that can produce the deadly gas. Other sources could include leaking chimneys, unvented kerosene or gas space heaters and even exhaust from cars operating in an attached garage.

The Environmental Protection Agency suggests the following to reduce exposure in the home:

• Keep gas appliances properly adjusted
• Install and use an exhaust fan vented to the outdoors over gas stoves
• Open flues when fireplaces are in use
• Do not idle car inside garage
• Have a trained professional inspect, clean and tune-up central heating systems annually

There can be many symptoms of carbon monoxide poisoning that can resemble other types of poisoning. Headaches, nausea, vomiting, dizziness and feelings of weakness or fatigue are a few of the most common symptoms. Lower levels of exposure may be mistaken for the flu.

Roughly half the states have laws regarding carbon monoxide detectors in homes. Regardless of the requirements, what person would want to put their family, guests or themselves at risk for something so deadly? The devices can be purchased for as little as $20 and plugged into the wall like a night light.