A New Financing Method to Help Millennials Buy a Home

Adapted from Benzinga.com | author Chris Dier-Scalise

According to the U.S. Census Bureau’s annual homeownership statistics, millennials are holding off on buying a home, in spite of the fact that this age demographic is willing but unable to buy a home. Most of the blame can be attributed to two causes: 1) they’re saddled with student debt, and 2) facing lower wages as they enter the workforce.

Overcoming the Down Payment

There are avenues for first time homebuyers to consider if they are interested in making an investment in their future but worried about being saddled with exorbitant interest rate payments. That’s where home equity financing comes in.

The process works like this: since most mortgages require 20% of a home’s value as a down payment in order to lock in a favorable interest rate, home buyers who don’t have that much money can supplement up to half of the down payment amount through a “home ownership investment program” such as one from a company called Unison.

The Buddy Method Of Homebuying with Unison

While this looks like a form of borrowing, it doesn’t come with strict payment deadlines or interest charges. Instead, repayment is postponed for 30 years or until the house is resold by the borrower. Unison then receives its original investment, plus or minus its share of the change in the home’s value.

Think of it like a partner investing in the home with you. While the homeowner owns and occupies the home, Unison holds a stake in its equity. If the equity increases by the end of the partnership, both the owner and Unison profit. If it decreases, Unison’s stake also typically diminishes.

Unison has the backing of institutional investors — such as pension funds and endowments — who are interested in investing in the U.S. residential real estate market. The model is meant to provide the final bit of capital that many people—especially millennials—simply can’t afford in the short term.

The extra funding Unison puts toward the down payment can give young home buyers the chance to enter the housing market without the burden of potentially excessive monthly payments if they can’t reach that 20 percent benchmark. Additionally, Unison’s model also offers buyers more leeway in the range of home prices they can consider making an offer on.

Homeowner Prep

Millennial homebuyers should still do their homework and have a sober understanding of their financial forecast before buying a home. Young prospective homebuyers might consider whether the monthly payments on the house are manageable and what level of maintenance the house would require to maintain or increase its equity.

The Unison model of homeownership investment is about empowering potential homebuyers, but the buyer should be confident about what kind of homeowner they plan on being. For those millennials facing some of the unavoidable perils of today’s economic ecosystem, Unison might be the ally they need in retaking the American Dream.

For more information on this unique financing method, visit the Unison website here: https://www.unison.com/

I am experienced in helping move-up buyers and/or “seasoned” buyers, but really enjoy working with millennials and a younger age group to help them realize their dream of buying and owning their own home. If there’s a way to do it, I’ll help them find that way!


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Love Flea Markets? Don’t Buy These Things!

Things you should never buy at a thrift store (or flea market, garage sale, etc)…. Unless you want lead poisoning!
Article courtesy of Country Living | authored by Jessica Mattern

The hunt for secondhand or vintage treasures is entertainment for many of us. And buying used is often an easy way to find inexpensive, high-quality, and one-of-a-kind pieces. But in some cases, pre-owned or old items can be unsanitary, more expensive, and, in worst-case scenarios, dangerous. So the next time you scour your favorite thrift shop, think twice about these items and how you plan to use them.

Bedding

This includes sheets, duvet covers, blankets, linens, and more. There’s no thorough way to sanitize these items, and since you’ll be spending so much time wrapped up in them (at least 8 hours a day, right?), you’re better off to buy new.

 

Antique Crystal

At least not if you plan to eat off of it. Antique crystal glasses, decanters, and other crystal vessels were likely made following outdated standards, which means they could contain a ton of lead oxide. Purchase for your collection or display, but not for actual use. And never use crystal to store food or drinks over a long period of time

Appliances you can’t test

A word to the wise: Make sure you know it works before you bring it home.

Old china and dishware

They may look pretty, but vintage plates, bowls, cups, and platters could contain lead or other unsafe substances. Yikes! If you’re worried, play it safe and use your vintage pieces for display.

 

 

Cribs

Over the decades, there have been millions of cribs recalled, in addition to improved crib safety standards implemented by manufacturers. Invest in a safe bed for your little one by purchasing one that’s new and up to the latest safety standards.

Anything with old chipping paint

From wood furniture, painted decorative metal, or construction materials (doors, windows, etc.) if they were painted before 1978, the paint most likely contains lead. If you fall in love with a shabby chic window frame at a flea market, ask to do a lead paint test with a quick kit before taking it home.

Vintage hardware

There’s nothing we love more than a distressed knob or pull to embellish a door, dresser, or cabinet, but these items also come with a risk of lead exposure. Always test for lead before you buy.

Mattresses and pillows

Two words: bed bugs. Two more words: buy new!

Used cookware

They may look beautifully distressed, but scratched, rusty or worn-down baking sheets, pots, pans and other go-to kitchen supplies are likely not safe for actual use. Chipping non-stick coatings and rust are not safe to consume food off of, and over-used cookware may seep harmful chemicals into your food. When it comes to vintage kitchen cookware, you may want to stick to just using them for decoration and not for food consumption.

Rugs

Pre-owned rugs probably contain years of stains, allergens, mold and mildew. Buy a new one and your allergies will thank you.

Anything that stinks

That funky smell could be from mold, dust, pet stains or a combination of chemicals from old paints or stains—and you’ll never know what’s causing it. Removing odors from furniture can be costly and time-consuming. Save yourself the headache and skip that musty piece you’re attracted to.

Upholstered furniture

At the very least, plan to remove and replace all the upholstery and padding from previously owned furniture to avoid bed bugs, allergens and mold. Or play it safe by skipping fabric-covered pieces altogether.

Utensils

Cheaply made utensils can cause metals and chemicals to leach and contaminate your food, but sterling silver and stainless steel are safe to use.

I would love to read your comments on this.  Do you collect vintage pieces of any kind, and where do you search for them? What procedures do you follow to make certain they are safe to bring into your home?  Please comment! And share with any of your friends that are avid collectors.

For all things “Home”, I enjoy discussing almost any topic, including the real estate market in Arlington. Call me if you think you might like to buy a new home.


7 Things Buyers Do That Drive Agents Crazy

Adapted from an article in Realtor.com, authored by Angela Colley

Buying a house is a process and one in which you’ll be in constant contact with your Realtor.

Your agent will spend a great deal of time to select only those homes to show you that meet your needs, especially regarding size, number of rooms, neighborhood and price. Don’t make these mistakes that will frustrate your agent and sabotage your chances of getting the right house, at the right price.

1. Caring too much about aesthetics

Beauty is only skin-deep when it comes to houses. Don’t get caught up in how a house looks right now. If it’s dirty, outdated, or in need of small repairs, you might be tempted to run. Instead, pay attention to the important aspects of a house—location, lot, floorplan and layout.  The cosmetic issues and small repairs can be fixed, often at a relatively low cost.  If the “bones” of the house are right, it may be well worth your extra effort to do the updates to make it your perfect home.  And, your agent may also negotiate a lower price offer that takes into account the updates that you’ll need to make.

2. Tipping your hand

After looking at a lot of houses, you may become more critically outspoken about the negatives in a house. However, voicing your criticism could spell disaster.

If your comments get back to the seller of the listing agent, it will hurt in negotiations for an accepted offer if you decide to make an offer.

3. Waiting too long

If you find a house you really like but want to think about it, DON’T! In a competitive real estate market, if you’re not prepared to act fast when you find the right home, you’ll lose. You will be disappointed and it’ll drive your Realtor crazy!

Timing is of the essence and if too much time passes between looking at a home and making an offer, the seller might not take you seriously. If another buyer has quickly expressed interest and is in communication with the listing agent, your offer may take second place.

4. Don’t think it’s all about the money

The amount you are willing to offer for a house is a huge part of your offer, but it’s not the only consideration. It’s not always the highest offer that a seller will accept but rather, the best structured offer.

A good offer is a mix of timing, the right price, and reasonable contingencies. If you decide on a price, but refuse to cave on a number of contingencies, you’re likely to frustrate your agent and the seller, and chance losing the deal.

5. Do not ignore what the seller wants

Buying a home is a two-way street. Real estate isn’t like other business deals–you’re buying from another person who has to choose you as the buyer.

Sellers are motivated for different reasons. Some are driven entirely by money, while others want to see their beloved home go to someone who will love and care for it as much as they did.

When you partner with a Realtor to represent you in the purchase of a property, that agent is gathering information about the seller’s motivation. They’ll use that information to help you write the best offer, and if you’re ignoring it, you could be hurting your chances.

6. Talking to the other team

Communicating with the listing agent directly is NOT good, even if you think you’re just being friendly to help seal the deal or think you should bypass your agent and talk directly to the listing agent. Remember, the listing agent’s job is to get the most money for the seller and he/she does not have your best interests in mind. YOUR Realtor does.

7. Writing a counter offer? Don’t lowball it

In negotiations, you’ve got to know when to stand your ground—and when to give a little.

If the sellers didn’t accept your first offer, but they’re willing to consider a counter offer, listen to your agent who has the expertise to guide you to an accepted contract. If your counter offer isn’t reasonable, your Realtor will spend a lot of time going back and forth between you and the seller’s agent. Worst case scenario, you’ll frustrate the sellers and lose the house for good.

We know you don’t want to overspend or give in on too many parts of the deal, but don’t be so stubborn that you kill the deal. Listen to your Realtor. By now, he/she knows what the seller will and will not accept.

When working with my clients, both buyers and sellers, I strive to develop a comfortable and trusting relationship.  I want to help you find exactly the home you want, without wasting time by showing you houses that do not meet your needs. I’ll help you stay on track and when you find the ideal house, I’ll assist in writing an offer that will be accepted and protects your investment.  If you or someone you know is thinking of buying a new home, please call me (682.551.0336) and let’s get started!

Four Questions Your Realtor Probably Won’t Answer

Adapted from an article by Stephanie Booth | Realtor.com

Your Realtor can answer almost any question about a house you’re interested in, but if you ask certain questions, you probably won’t get an answer. By not responding, they’re staying on the right side of the Fair Housing Act, which prohibits housing discrimination based on race, religion, sex, or family/economic status.

Here are the top 4 questions agents are asked, but most likely will not answer:

Is this a good place to raise a family?

Realtors who either encourage or discourage home buyers based on a question about children can face consequences in court. If you want to know this info, you’ll have to do your own research.

What’s the neighborhood like?

A friend will answer this question but your Realtor won’t because the answer could be deemed prejudicial. To check an area’s ethnic makeup, visit the U.S. Census website, which has all the details you want to know.

Is this area safe?

The answer to this could be construed as racist or classist, so most agents will keep their lips sealed on this one. Visit MyLocalCrime.com to access recent local crimes or vandalism.

How are the schools here?

A Realtor has to be careful not to let their answer be construed as a coded message about race. He or she can suggest websites that rank schools (ie, Great Schools and School Digger).

Whether you’re a buyer or seller, I can answer specific and legal questions about a property. If I’m not allowed to answer your question, I’ll direct you to the answers where you can check them out yourselves. If I don’t know the answer, I’ll find it for you. I strive to make your real estate transactions pleasant and successful.  My clients will vouch for that–check here to read some of their testimonials! http://bit.ly/2p573wu


What’s the Best Credit Score to Get A Good Mortgage?

So you want to buy a house and you wonder how your credit score will impact your ability to get a mortgage loan with a good interest rate.

A perfect credit score is 850, but all scores 760 and above are considered to be in the best range. Mortgage lenders want your business and will offer you loans with the lowest interest rates.

A good score is from 700 to 759 and a fair score is from 650 to 699. Since a lower score means you’ve had some late payments or other dings on your credit history, lenders see you as more likely to default on your home loan. They may still give you a mortgage, but it will be at a higher interest rate.

Credit scores below 650 are considered poor. This doesn’t necessarily mean you can’t qualify for a loan, but it may be tough, and you’ll pay a higher interest rate.

If your score is lower than you’d hoped, you can raise your credit score. Just keep in mind that you can’t improve a credit score overnight, which is why you should check your credit score annually—long before you want to start house hunting.

If you want to buy a home or you know someone who’s looking to buy a home, contact me to learn your financing options. I can refer you to experienced mortgage loan officers who will consider your financial standing and help you get the best possible loan. Then we can begin your home search.


How Do Comparable Sales Impact My Listing Price

Adapted from an article authored by John N Frank, REALTOR.org

 

In order for your Realtor to establish an accurate valuation in which to list your home, he/she analyzes comparable data—the sales price of neighboring and similar homes that have recently sold.

However, in addition to comps, other factors enter into the equation and they affect how your home compares to neighboring homes.

Location within the neighborhood


If your home is situated near a highway, high power lines or other undesirable locations, it will bring a lower price than your neighbors.

Your home’s lot

If your lot has an odd configuration, or the backyard is chopped off and doesn’t have much useable space, it will bring your price down.

Renovations

Neighboring homes that have recently been updated will get a higher price than those homes that have not been updated. In this case, you can make home renovations that will boost your home’s sales price OR sell your home as-is for a lower price.

New construction

If your neighborhood area has several subdivisions under construction, this will definitely affect the market value of your home since you will be selling in direct competition with new housing. If builders are offering new construction incentives, buyers may find it less expensive to buy new than purchase an existing home. Your Realtor will pull comps from local builders to show the possible impact on your home’s value.

The difference between listing price and sales price

Many sellers will go online to see listing prices for other homes on the market in their neighborhood and ask their agent to price their home accordingly. It’s important to know that listing price is not an accurate measure of any home’s value. The SELLING price is what counts, and that’s what your agent will analyze for an accurate listing price for your home.

Other points that will affect how your house measures up price-wise in your neighborhood are:

  • The style of your home. Is it similar to others in the neighborhood and a popular design that appeals to the average buyer?
  • What price range are adjoining subdivisions? If there is a significant price difference, either higher or lower, it will impact your valuation.
  • Your neighbor’s home—is it one of those occasional eye-sores on your street? If the yard is unkempt or the house is in poor repair, you can believe it will affect the value of your home and likely make it more difficult to sell.

    When Laura Van Meter prepares a market valuation for you, she will deliver the BEST price in which to list your home, and she’ll back up her findings with comparable data.  She’ll also take into consideration any of the above factors that may apply to your home. Her record of sold listings, as well as recommendations from previous clients, means you can be confident that she is placing your home on the market at the BEST possible price.  If you or someone you know is thinking of selling their home, call Laura at 682.551.0336. Let a true professional go to work for YOU!

It’s About to Get Easier to Qualify for a Mortgage

Adapted from an article authored by Clare Trapasso | Realtor.com

We’re living in expensive times, but aspiring homeowners might soon get a break as it becomes a little easier for those with student, credit card, and car loan debt to qualify for a mortgage.

Fannie Mae plans to increase its allowable debt-to-income ratio from 45% to 50% on July 29. This means that more borrowers on the cusp of getting a loan (e.g., millennial, first-time, and lower- to moderate-income borrowers carrying more debt) could potentially qualify for a mortgage backed by Fannie.

The debt-to-income ratio is calculated by taking a potential borrower’s monthly gross income and dividing it by the borrower’s recurring debts such as monthly car payments. Lenders use this ratio to figure out if borrowers can afford to make their mortgage payments each month.

Fannie made the change after analyzing years of data that looked at the ability of borrowers to make their monthly payments. It determined that increasing the ratio will enable more qualified borrowers to get a mortgage loan.

Fannie, which purchases and guarantees mortgages, was already granting ratios of up to 50% with certain conditions—such as if the borrowers had deeper cash reserves, underwent financial counseling, or had higher incomes. The new change opens the door to borrowers with more debt who can’t meet those conditions.

However, not everyone will be benefit from the change. Fannie Mae insures mortgages, but it’s still banks, credit unions, and other financial entities that make the loans—and those lenders have their own criteria for debt-to-income ratios. But the increased debt allowance could encourage more lenders to make changes to their ratios.

A higher debt ratio isn’t a silver bullet for loan seekers, though. If you don’t have a good credit score or a sufficiently large down payment, it won’t change the outcome of your application.

Buyers who can’t qualify, even with the higher ratios, should consider other alternatives. The most logical answer is to look for homes in the lower end of their budget, find a trustworthy co-signer, or simply come up with more down payment money.

I assist my clients to secure mortgage financing and work with several lenders who are experienced in getting clients approved.  If you or someone you know is looking to buy or sell a home, this is an excellent time to be active in the market.  Call me at 682.551.0336 to discuss your housing requirements, or check out my website here:  http://www.homearlingtonmansfield.com/