centennial: Higher Interest Rates May be the Help You Need
- 04/30/23 05:13 PM
5 Like opening and closing a faucet increases and decreases the water flow, lowering interest rates increases home sales and raising interest rates decreases home sales.
When home sales increase during periods of limited inventory, demand increases and prices go up. Contrarily, when home sales decrease, demand could lessen and prices moderate.
There is opportunity with higher rates because it affects sales and demand, which in turn keeps prices in check. By waiting for rates to come down, and no one knows by how much but certainly not to the 3-4% range, buyers' pent-up demand will affect the already low supply and cause … (1 comments)
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centennial: Waiting for the Mortgage Rates to Come Down
- 12/11/22 11:34 AM
Waiting for the mortgage rates to come down before you buy a home may not be a good decision.
If you are correct, and the rates do come down by two percent, the savings you benefit from a lower rate will most likely be devoured by the appreciated price increase.
As of 12/8/22, the 30-year fixed-rate was at 6.33% which is close to the highest level since mid-2008. If the rate drops to 4.7% in three years but the price increases by 5% a year, a $400,000 home today, will cost $463,050 three years from now.
An increasingly, popular option that … (5 comments)
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centennial: Five Factors that Affect the Sale of Any Home
- 09/28/22 10:22 AM
Owners directly control four of the five factors that affect the sale of any home: price, location, condition, terms, and the agent you select. The one thing you can't control is the location of the home, but you can adjust the other factors to compensate for failings.
The seller controls the price of the home which determines its positioning in the marketplace. If is priced too high, it will take longer to sell and, in some cases, for less than what it should have sold for because when it doesn't sell immediately, it is assumed that there must be an issue with it. If … (1 comments)
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centennial: Will Selling Your Home Increase Your Tax Bill?
- 05/05/22 01:00 PM
With home prices rising 20% nationwide in the past year and in some markets, even dramatically more, many homeowners are excited about the equity in their homes. In the past, most homeowners were not concerned about profit from the sale being taxed but some may be surprised.
The profit homeowners make on the sale of their homes have enjoyed a generous exclusion. Since 1997, for qualified sales, single taxpayers exclude up to $250,000 of capital gain and married taxpayers filing jointly, can exclude up to $500,000 of gain.
Prior to the Taxpayer Relief Act of 1997, homeowners over the age of 55 … (1 comments)
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centennial: Buying a Home...Ask for a CLUE Report
- 04/25/22 07:12 PM
People purchasing a used car have most likely heard of CARFAX vehicle history reports to help them avoid buying a car with costly hidden problems. Less likely are buyers to know that there is a way to discover some of the repair history of homes they are interested in.
Lexis Nexis C.L.U.E. (Claims Loss Underwriting Exchange) is a claims history database that enables insurance companies to access consumer claims for the previous seven years when they are underwriting a risk or rating an insurance policy.
An insurance underwriter could identify a previous claim for substantial damage to a property and try … (2 comments)
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centennial: Assumptions Make Sense Again
- 02/28/22 06:25 PM
Existing FHA and VA mortgages are assumable at the note rate to owner-occupied buyers who qualify. This can be an alternative to paying higher, current rates and benefit buyers with lower closing costs while saving money on the payment.
For the last 20 years, rates have been steadily coming down and there was no reason to qualify for the assumption when a new loan had a lower interest rate.
Assuming an FHA or VA loan with a lower interest rate will obviously mean lower payments but it will also build equity faster because the amortization schedule is advanced from a new … (2 comments)
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centennial: Paying Points to Lower the Rate
- 02/02/22 04:15 PM
Two commonly known ways to lower your mortgage payments are to make a larger down payment especially if it eliminates private mortgage insurance and improve your credit score before applying for a mortgage.
Another way to lower your payment would be to buy down the interest rate for the life of the mortgage with discount points. A discount point is one percent of the mortgage borrowed. Lenders collect this fee up-front to increase the yield on the note in exchange for a lower interest rate.
A permanent buy down on a fixed-rate mortgage is available to borrowers who are willing to pay … (0 comments)
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centennial: Your Home is a Hedge Against Inflation
- 01/17/22 07:57 PM
The concern about inflation is the sustained upward movement in the overall price of goods and services while the purchasing value of money decreases. Tangible assets like your home consistently become more valuable over time. In inflationary periods, your home is a good investment and a hedge against inflation.
Money in the bank loses purchasing power due to inflation and the interest you may be earning is almost always less than inflation.
Home prices are going up but so is rent. With mortgage rates near historic lows, the interest is, generally, less than the appreciation the property is enjoying. Combine this with the leverage … (0 comments)
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centennial: Where Did the Assumptions Go?
- 12/16/20 10:08 AM
Mortgage assumptions have not been a practical matter for the last 30 years because mortgage rates have been on a steady decline. Even if the seller had a rate lower than the current rate, the new purchaser must qualify to assume the loan.
In the case of conventional loans, the lender has the right to increase the rate to the current rate which neutralizes the reason for assuming the loan. This change took place in the early 1980's when lenders added due on sale provisions so lower rates could not be assumed.
FHA and VA loans can be assumed at the existing … (1 comments)
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centennial: It's Worth Digging a Little Deeper
- 09/06/20 07:20 PM
There are hundreds of thousands of people who believe, for one reason or another, they cannot afford to buy a home currently. Some people may not for any number of reasons but it would be very surprising to know how many who can buy but have gotten some bad information along the way. It's worth digging a little deeper to find out the facts.
John and Karen have been renting a home for the last five years at $2,000 a month. During that time, the value of the home they were renting went up by $30,000 in value while the unpaid balance decreased … (1 comments)
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centennial: Ready to Downsize?
- 09/04/19 01:26 PM
9/4/2019 It is estimated that over 15% of the population in the U.S. are over 65 years of age. With one of the most common fears of seniors being their money will run out early, it is understandable that downsizing may be strategy to meet their goals.
Once the kids are grown, have careers, relationships and get a place of their own, parents find they may not need their "big" home like they did before. In other situations, their lifestyle might have changed, and the house just doesn't "fit" anymore.
The benefits of a smaller home can include the following:
Easier to maintain … (2 comments)
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centennial: Act Decisively
- 09/11/18 04:31 PM
Whether it is hesitation or procrastination due to uncertainty, it can cost buyers by having to pay more for both the house and the financing. This is one of those markets where most of the experts expect interest rates and prices will continue to rise through 2019.
The National Association of REALTORS® reports there is currently a 4.2-month supply of homes for sale which is close to the same as last year's inventory. Normal inventory is considered to be a 6-month supply.
If during the period you're waiting to buy, the price of the home goes up by 5% and the mortgage … (0 comments)
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centennial: Must Be This Tall to Ride
- 06/04/17 08:53 PM
Surely, you remember being a child at an amusement park when after having stood in line with your friends and family, waiting to get on a terrific ride, you discovered the sign that read, “you must be this tall to ride.”
Not only was it disappointing, it was slightly embarrassing. You never want to go through that again.
A remarkably similar situation occurs when people are buying a home. After finding the right home and negotiating the contract, they find out that they don’t measure up financially. It’s not something that anyone wants to go through if they have a choice.
Regardless of what … (0 comments)
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centennial: Would - be to Should - be
- 04/27/17 07:23 PM
Some would-be buyers have emotional reasons to own a home like having a place of their own where they can raise a family, feel safe and secure and enjoy their friends’ company. Other buyers’ dominant reasons might be financial in nature such as building equity or lowering their cost of housing.
Regardless of what might be motivating people to want their own home, it is easy to justify that now is a good time to purchase. Let’s look at a $250,000 example using a FHA loan.
The total payment will be about $1,835 dollars a month. If the payment is lower than the … (1 comments)
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5 Like opening and closing a faucet increases and decreases the water flow, lowering interest rates increases home sales and raising interest rates decreases home sales.
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