How Much Do You Really Need to Put Down on a Home?

Can you negotiate rent? While rental leases may appear set in stone, they’re more flexible than many tenants think—so if you think your rent is too damn high, it’s definitely worth speaking up.

Negotiating rent with a landlord might seem like a hard battle to win, but it’s entirely doable if you can prove two things: 1) the rent being charged is higher than similar units elsewhere, and 2) you’re a model tenant who pays rent on time. Such negotiations can be done whether you’re applying to rent a new apartment or just want cheaper rent where you currently reside.

Here’s how to negotiate rent and help your landlord realize you’re worth the sacrifice.

How to negotiate rent before you move in

As a prospective tenant, it’s a bit harder to persuade a new landlord to accept lower rent, since you two have no history together. A competitive market counts here: Landlords who’ve been struggling to fill apartments will be far more willing to negotiate than most.

Here are some ways to stand out.

  • Prepare a stellar application. “The best way I’ve seen renters negotiate rent is to be an amazing applicant,” says Glenn Carter, a real estate investor at Condo.Capital. That means submitting your application quickly and including tax returns, proof of employment and references from previous landlords saying you pay rent on time. “This will show potential landlords you’re diligent and will treat the property well,” Carter says.
  • Show a high credit score. If possible, also bring a recent document showing your high credit score, which indicates you reliable pay your debts on time. “As a landlord, I would accept lower rent from a dependable source,” says Boston landlord Steve Silberberg.
  • Gather rental statistics. Comb through online listings to find out the rents of comparable properties in the area. Also research how long the property you’re interested in—or a similar unit in the area—has been on the market. When you speak to the landlord, have a print-out of comparable units that are slightly lower in rent and, if the unit has been unoccupied, have this information on hand as well. Then point out how these factors make the rent he’s charging too high for the market to bear.
  • Suggest a realistic rent reduction. Be sure to have a realistic rent reduction ready based on your research. Don’t lowball, but let your first offer be one your landlord can haggle with you on. Make your case in a non-confrontational way. Say something like, “I love this place and am looking for a long-term commitment. Unfortunately, my budget is X. Would you be willing to meet that in exchange for signing a longer lease?”

How to negotiate rent as a current tenant

As a current tenant, you’ll have more leverage—that is, if you’ve paid rent on time and otherwise proved to be a good tenant.

Here’s how to negotiate rent when you’re already living there.

  • Time it right. Start the conversation shortly before your lease is up for renewal. Begin by saying you’re not thinking of moving out but rather want to stay—for the right price. Then state the facts: You like your current apartment, but you’re seeing cheaper rents elsewhere.
  • Point out the benefits of your staying. Remind the landlord that keeping you as a tenant saves him the hassle of listing a vacancy, showing the apartment, screening applicants, and losing potential rental income during the time the property is unoccupied.
  • Offer something in return. Ask your landlord what he wants in exchange for a lower rent—a longer lease commitment or prepaying a month or two—to make your request fit his needs.
  • Demonstrate you’re a model tenant. Frame your reduction in rent as a return on investment, because you have a stellar payment record and value as a tenant. Remind your landlord you pay rent on time, keep your place in good condition, and help your neighbors. “If less reliable tenants miss even a half-month’s rent during their lease, that translates into a loss,” says Silberberg. “I recently accepted $150 less per month on a year and a half lease for very stable renters, instead of a year lease with less stable tenants.”
  • Point out repairs. You may also want to tactfully bring your landlord’s attention to anything in your unit that’s worn out or needs painting. Then suggest that the current condition of the items in question merits a proportionate reduction in rent. You can also offer to repair or replace these items yourself in exchange for reduced rent.
  • Suggest a temporary rent reduction. If you suspect your landlord won’t budge on a permanent rent reduction, consider suggesting a temporary reduction instead—say, during off-peak seasons when it’s harder to rent places out. “I’m most open to price negotiations anytime between November and January,” says landlord Domenick Tiziano of AccidentalRental.com. “If I have a vacancy, a good candidate has a pretty good chance of talking me down a few bucks.” For a $900 property, Tiziano will consider a $50 reduction but only for a six-month period.

By: Zillow  #millenniumsales  #piecuadrado #waterfront #buying #homebuyers

Can my community stop me from parking a truck in my driveway?

 Can my community stop me from parking a truck in my driveway?

BY:Owner of Gibraltar Title, Board-certified real estate lawyer Gary M. Singer writes about the housing market in the Sun Sentinel each Monday. 
Q: Why is it that community associations don’t allow trucks or commercial vehicles to be parked in driveways overnight? This country is made up of small businesses that service these communities. It does not make sense that a homeowner can’t even have a pickup truck! — Terry

A: Many people decide to live in planned communities to have their own slice of paradise. They decide to live in a neighborhood with a certain look, amenities and lifestyle. Often the decision is made to ban commercial vehicles, and even, sometimes, all trucks. Each community is free to write its own rules, and you must read your community agreements to determine what rules you agreed to live by.

To be clear, you have to follow your community’s rules because you agreed to do so when you moved in. You are bound by your agreement, not any particular law in this regard. If your documents ban commercial vehicles but allow passenger vehicles, you should be allowed to have a pickup truck that is for personal use, but not a work pickup truck. However, if all trucks are banned, then you cannot have any pickup truck, no matter its use.

Remember to read your documents, and not just take the management company’s word on the matter, since I have found that sometimes the board or management company is misinformed on what the documents actually say.

Also remember that it is your community. So if you and enough of your neighbors want to change the rules, you can amend your documents, working with your board of directors to have a community vote to do so.

Short of that, if you are not a fan of the restrictions agreed to by your neighbors, you can always move to a community more in line with your lifestyle.

Millennium Sales & Investments, Condo living, Homeowners Association,

Everything you need to know about buying a home

Everything you need to know about buying a home — on one index card.

A home is often the biggest financial investment you’ll make in your lifetime. In fact, a recent Zillow analysis reports that the typical American homeowner has 40 percent of their wealth tied up in their home.

Several years ago, I wrote a complete guide to financial planning on one index card, which went viral and later became a book: “The Index Card: Why Personal Finance Doesn’t Have to Be Complicated” (co-written with Helaine Olen).

Now, following up on my original index card, I’ve written a guide on buying a house. Below is the housing index card — a handy resource to print out and take with you as you look at houses or think about buying one, plus some additional advice as you contemplate making the big decision.

1. Buy for the long run. Assume you’ll own your home for at least five years.

A home is a significant investment, not to mention a linchpin of stability. According to the Zillow Group Consumer Housing Trends Report 2017, the majority of Americans who sold their homes last year had lived in their home for at least a decade before selling.

Some are even staying for the long haul. Almost half (46 percent) of all homeowners are like me — living in the first home we ever purchased. In short: Buy a home you want to live in — one equipped (or ready to be equipped) with the features and space you need, both now and in the future.

2. Buy to improve your life, not to speculate with your money.

Your home is more than a financial investment; it’s where you sleep, eat, host friends, raise your children — it’s where your life happens.

The housing market is too unpredictable to buy a (primary) home purely because you think it will net a big short-term financial return. You will most likely be living in this home for several years, regardless of how it appreciates, so your first priority should be finding a home that will meet your needs and help you build the life you want.

3. Focus on what’s important to you. Don’t be distracted by features you don’t need.

Today’s housing market is short on inventory, with 10 percent fewer homes on the market in November 2017 than November 2016.

So, focus on finding a home you can afford that meets your needs — but don’t get distracted by shiny features that might break your budget. Nice-to-have features often drive up the price tag for things you don’t particularly value once the initial enjoyment wears off.

Make a list of your basic needs, both for your desired home and for your desired neighborhood. Stick to finding a home that meets these needs, without buying extra stuff that adds up.

4. Determine a budget and stick to it. Don’t look at houses above that budget.

It’s important to set a budget early — ideally before you even start looking at homes. In today’s market, especially in the more competitive markets, it’s incredibly easy to go over budget — 29 percent of buyers who purchased last year did.

The most common culprit? Location. Zillow’s data indicates that urban buyers are significantly more likely to go over budget (42 percent) than suburban (25 percent) or rural (20 percent) buyers.

There’s nothing inherently wrong with that. Local schools matter, and psychologists tell us that a short commute improves your life. But be realistic about your local market and about yourself. Know what you’re willing to compromise on — be it less square footage, home repairs or a different neighborhood.

5. A 20 percent down payment is ideal. If you can’t afford that, consider a smaller down payment, or lower your budget.

If you can afford it, a 20 percent down payment is ideal for three reasons:

  • Buyers who don’t put a full 20 percent down pay a premium, most commonly in the form of private mortgage insurance (PMI). This is less financially punishing than it used to be, given today’s low mortgage rates. A monthly mortgage payment (with PMI) may be lower than a monthly rental payment in many markets — but still.
  • Buyers who put more down upfront typically make fewer offers and buy faster than those who put less down. Zillow research found that buyers with higher down payments make 1.9 offers on average, compared to 2.4 offers for buyers with lower down payments (after controlling for market conditions).
  • A higher down payment reduces your financial risk. You don’t want to owe more money than your house is worth if local markets dip when you need to sell.

6. Keep a six-month strategic reserve after down payment. Stuff happens.

While a down payment is a significant expense, it’s also important to build up a strategic reserve and keep it separate from your normal bank account.

This reserve should cover six months of living expenses in case you get sick, face an unexpected expense or lose your job. A strategic reserve will not only save you from financial hardship in the event of an emergency but also provide peace of mind.

When we accumulated a strategic reserve, my wife and I finally felt ready to build for our future. Without it, we were living from paycheck to paycheck, anxiously managing our cash flow rather than saving or budgeting.

7. Get pre-approved, and if you want to avoid uncertainty down the road, stick with a boring 30- or 15-year fixed-rate mortgage.

The pre-approval process requires organizing all your paperwork; documenting your income, debt and credit; and understanding all the loan options available to you. It’s a bit of a pain, but it saves time later. Getting pre-approved also shows sellers that you’re a reliable buyer with a strong financial footing. Most importantly, it helps you understand what you can afford.

There are a variety of mortgage types, and it’s important to evaluate all of them to see which is best for your family and financial situation. Those boring 30- and 15-year mortgages offer big advantages.

The biggest is locking in your mortgage rate. In short: A 30-year fixed mortgage has a specific fixed rate of interest that doesn’t change for 30 years. A 15-year fixed mortgage does the same.

These typically have lower rates but higher monthly payments, since you must pay it off in half the time. Conventional fixed-rate mortgages help you manage your household budgeting because you know precisely how much you’ll be paying every month for many years. They’re simple to understand, and current rates are low.

One final advantage is that they don’t tempt you with a low initial payment to buy more house than you can afford.

8. Comparison shop to get the best mortgage.

Though a home is the biggest purchase many of us will ever make, most home buyers don’t shop around for a mortgage (52 percent consider only a single lender).

I certainly didn’t. This did save me some annoying phone calls and hassle, but it cost me $40 or $50 every month, for years. The difference of half a percentage point in your mortgage rate can add up to thousands of dollars over the lifetime of the loan. It’s important to evaluate all the available options to make sure you’re going with the lender who meets your needs — not just the first one you contact.

The three most important factors to buyers are that the lender offers a loan program that caters to their specific needs (76 percent), has the most competitive rates (74 percent) and has a history of closing on time (63 percent).

9. Spend no more than a third of your after-tax income on housing (unless you live in an especially pricey market).

It’s better to regret spending too little on your home than spending too much. One-third of your after-tax income is a manageable amount. This isn’t always possible if you live in a place like San Francisco or New York, but it’s still a good yardstick for where to be.

10. When getting ready to buy, always be willing to walk away.

Buying a home is a time-consuming, stressful but ultimately rewarding endeavor — if you end up closing on a home that meets your needs. But it’s important to manage your expectations in case you don’t immediately find a home you can afford with the features you need.

Always be prepared to walk away if the sellers don’t accept your offer, the home doesn’t pass a rigorous inspection or the timing isn’t right. Hold fast to your list of must-haves, stick to what you can afford and don’t overreach or settle.

It’s no tragedy to miss out on any particular house. Remember that you’re playing the long game. You want to be happy 10 years from now.

 

by: Harold Pollak 3

#buyingahome #msi  #purchasing #waterfrontproperty #homes #homebuying #selling

 

Will It Become Harder to Afford a Home? Experts Say Yes

Despite a red-hot real estate market, most aspiring buyers can still afford to buy a home—if they can find one. But it may not be that way for much longer.
Households bringing in at least $68,000 a year, the national median, could afford about 59.6% of all newly constructed and existing (previously lived in) homes sold in the fourth quarter of 2017, according to a recent National Association of Home Builders report. But that doesn’t take into account the most expensive coastal markets such as San Francisco and New York City, where buyers need six-figure salaries for even the smallest and oldest of residences.
The quarterly report looked at three figures: home prices, mortgage interest rates, and the median household income, across the nation and in 238 metropolitan markets. It did not take into consideration down payments, and the struggle that many would-be buyers face accumulating a lump sum to pay upfront.
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“Buyers should be prepared,” says the association’s chief economist, Robert Dietz. “It’s going to be more expensive to afford a house over the course of 2018. … Interest rates went up a little bit, and home prices went up as well.”
Thank the lack of homes on the market, and of construction to build new ones, for the price bumps. The lack of inventory has led to bidding wars, offers over asking, and a whole lot of frustration.
Buyers have more peace of mind in Syracuse, NY, and Youngstown, OH, which tied for the most affordable major housing markets. In focusing on individual markets, the report used local median figures for household income and home price.
About 88.3% of homes sold were affordable to folks earning the areas’ respective median incomes of $54,600 and $68,000. These areas have struggled as manufacturing jobs, and then residents, have left in recent decades.
The rest of the most affordable markets were Indianapolis; Scranton, PA; and Columbia, SC.
Cumberland, MD, was named the most affordable smaller market in the country. Residents bringing home the area’s median income of $53,900 could afford about 96.9% of homes sold.
There were even several abodes under $20,000 for sale—including a three-bed, two-bath, single-family house going for $17,900.
The least affordable metros were all in California, with San Francisco topping the list. No surprise there as the median home list price in the city limits is a jaw-dropping $1,200,000, according to realtor.com® data. It was followed by Los Angeles, Anaheim, San Jose, and Santa Rosa.

BY:Clare Trapasso is the senior news editor of realtor.com and an adjunct journalism professor. She previously wrote for a Financial Times publication and the New York Daily News.

buying, selling, financing  Millennium Sales.

 

A Guide of estimating closing costs!

Calculating Closing Costs

calculator to calculate home closing costs for homebuyers

In the sale, the sellers usually pay the larger figure of closing costs because they are charged with paying out the commission to the real estate agents. But buyers can try to negotiate with the seller for the seller to pay a portion of the closing costs on behalf of the buyer. We’ll assume for the point of this article that the seller is not paying anything for the buyer.

First, there are several variables that go into the closing cost calculation including the cost of your new home. A good estimate for buyer’s closing costs are around 3-6% of the purchase price. According to Bankrate.com, closing costs increased 6% from 2014-2015 but only 1.6% from 2015 to 2016, which is some consolation. Still, the average across the US on a 200,000 home is around $3,000.

But what goes into closing costs for the buyer?

Components of Closing Costs

The following are some of the costs you can expect to pay at closing:

Ways to Reduce Closing Fees

While there are some services that can be shopped around like title insurance and home inspections, there are also a few other tips to help you pay the least amount possible at closing.

calculator with fees and magnifying glass closing costs for home buyers

  • Close at the end of the month: you’ll be charged per diem interest so if you close at the beginning of the month, you’ll have a larger portion to pay than if you close with one day left.
  • Check with your employer and memberships. Some employers like the military (U.S. government) and some unions offer discounts on closing costs or home prices, though they may require a specific lender be used.
  • Ask the seller to cover them. You can negotiate with the seller to pay your closing costs. However, this is probably not advisable in a hot real estate market.

The State Matters

Closing costs do vary by state due to local and statewide regulations and fees. Here’s a list of the least expensive and most expensive states in which to close.

When you first obtain your loan, you will receive an estimated closing statement. Three business days before closing, you’ll receive a revised one. Compare the two numbers. They may be off slightly but should be very close. If not, notify the sender immediately.

At Bay National Title, we put our clients first. We take the time to make sure all of their questions are answered to their satisfaction.

#millenniumsales buyers home waterfront, oceanfront Berta Correa, Broker 954-802-2143

FHA Loan Requirements: What Home Buyers Need to Qualify

If you’re looking up “FHA loan requirements,” you are very likely wondering if you qualify for an FHA loan. These mortgages, which are insured by the Federal Housing Administration, help home buyers secure financing to buy a home despite their low income, lack of savings, or poor credit scores—the kind of things that often prevent people from getting a conventional loan.

“FHA loans are a great option for a lot of home buyers, particularly if they’re buying their first home,” says Todd Sheinin, mortgage lender and chief operating officer at New America Financial in Gaithersburg, MD. And while not all lenders offer FHA loans, many do, because their government backing guarantees that lenders won’t lose their money if the buyer defaults. So it’s win-win all round!

Yet although FHA loans have looser qualification requirements than traditional mortgages, that doesn’t mean they have none at all. While the exact rules and thresholds will vary a bit by lender, here’s a ballpark guide to what you can expect you’ll need to qualify for an FHA loan.

1. A minimum down payment of 3.5%

With conventional loans, it’s generally recommended that you make a 20% down payment, which would amount to a whopping $50,000 on a $250,000 home. FHA loans lower the bar to a far more realistic level, requiring as little as 3.5%. So, on a $250,000 house, you would only need to plunk down $8,750 to qualify for an FHA loan.

This is a boon, particularly for first-time home buyers, who tend to have less money socked away to put toward their dream of home ownership. In fact, a recent study from Apartment List found that more than two-thirds of millennials don’t even have $1,000 saved up for a down payment. And millennials are now the largest group of home buyers.

2. A minimum credit score of 500

To qualify for an FHA loan, your credit score—the numerical representation of your track record paying past debts—will need to be at least 500—although if your score is indeed in this low range, you’ll have to make a slightly larger down payment, of 10%. To take advantage of that teeny weeny 3.5% down, you’ll need a credit score that’s slightly higher, at 580 or above. All that said, keep in mind that credit requirements may fluctuate not only by lender but based on changes in the housing market.

3. You’ll have to pay mortgage insurance

Because the federal government insures these loans, borrowers must pay an upfront mortgage insurance premium (MIP). Currently, the fee is 1.75%—that’s $4,375 on a $250,000 home loan. However, once you’ve accrued 20% equity in the home, the MIP should drop off from your mortgage payments. (Note: You’ll want to follow up with your lender at that point, to make sure the insurance premium has been removed.)

Borrowers will also have to pay annual mortgage insurance, currently around 0.85% of the borrowed loan amount—or $2,125 more per year. For most loans, this mortgage insurance remains throughout the life of the loan, or until you refinance out of an FHA loan to get rid of it, says Jordan Dobbs, a loan officer at Washington First Mortgage in Rockville, MD.

4. A maximum debt-to-income ratio of 59%

Debt-to-income ratio is a way lenders determine whether you can afford your housing payments, by comparing the amount of money you make to what you owe. Currently, the maximum debt-to-income ratio for an FHA loan is 31%. In other words, if your monthly pretax salary is $6,000, your housing expenses should not exceed about a third of your income, or $1,860.

More realistically, however, debt-to-income ratio should factor in all of your recurring debts, including college and car loans. In this context, the FHA generally looks for a borrower’s total debt load not to exceed 59% of pretax income. To use the $6,000 example above, that would mean that the maximum amount you should be paying for your mortgage and other debts (credit card not included) is $2,580. Check this FHA handbook for more information.

5. The home must undergo a rigorous appraisal

While pretty much all loans require a home appraisal, so lenders can make sure their money isn’t funding a shack, FHA appraisal guidelines are more rigid than those for conventional loans, and not all houses will get the green light for FHA approval. This may mean that the seller of your desired home will need to make some repairs in order for your lender to approve the loan.

What are the FHA loan limits?

FHA loan programs only insure loans up to the maximum limit, which varies by county. In most areas, the limit is $417,000, but in certain high-cost areas, the limit is $636,150. You can see the FHA loan limits for your county at Hud.gov.

For more smart financial news and advice, head over to MarketWatch.

Daniel Bortz is a Realtor in Maryland, Virginia, and Washington, DC, who has written for Money magazine, Entrepreneur magazine, CNNMoney, and more.
First home buyers, Millenniumsales, FHA, morgages, qualify for a mortgage, financial news.

Buying a House With Cash? Don’t Forget These Added Expenses

There’s no question that buying a house with cash will make you feel like a million bucks. Maybe you came into a large inheritance, or you’re just really good at saving. Either way, paying the price of the home in full means you won’t have to worry about making mortgage payments. Plus, sellers love a cash offer because it means they won’t have to wait for mortgage lenders to approve your funding. High-fives all around!

You will, however, still be responsible for other costs that come with buying and owning a house. Don’t forget about these expenses you’ll have to cover, even if you plan on financing the house with cold, hard cash.

  • Real estate transfer taxes charged by the county and/or city
  • Title insurance fee
  • Processing and filing fees for forms being submitted to the County Recorder
  • Appraisal fee
  • Home inspection fee

Even if you’re buying a home with cash, the one-time closing costs, or fees you’ll have to pay during the closing process, can be as much as 3% of the purchase price, according to KW &MSI.

Sadly, your home doesn’t just cost “nothing” in subsequent years. Here are some ongoing costs you should be prepared for—by keeping some money in the kitty.

Closing costs

The purchase price is the biggest number you’ll have to face when buying a house, but there are still closing costs that must be dealt with, says Realtor® Denise Shur with 1:1 Realty in San Jose, CA. Sure, you

Sadly, your home doesn’t just cost “nothing” in subsequent years. Here are some ongoing costs you should be prepared for—by keeping some money in the kitty.

Property taxes

Yep, they say the only things certain in life are death and you-know-what. And it’s true! Even if your entire house is paid off, you’ll still have to pay property taxes each month.

To get an idea of what those bills will look like, check a home’s listing on realtor.com®. Scroll down to the Payment Calculator section, and look on the line that says Property Tax.

To get a more definitive picture, visit your city and county websites to find out the local property tax rates and whether a hike is imminent. You can also check with your real estate agent to get a copy of the current owner’s tax bill.

Homeowners insurance

The cost of the policy will depend on the size and value of your home, your location, your deductible, and your coverage. Talk to your current insurer about the home and area you’ll be moving to to get an accurate picture of your new insurance costs. You might need to add flood or earthquake coverage to your policy if those are real threats in your new neighborhood.

Home maintenance

We hate to break it to you, but things break. That’s why savvy homeowners put aside some money each month for unexpected repair or maintenance needs. Shur recommends considering a home warranty, which costs about $450 a year and provides coverage on a wide variety of elements such as plumbing, electrical, heating/air conditioning, and appliances.

Homeowners association fees

If you’re buying in a community with a homeowners association, you might have to budget for monthly or annual HOA fees. These mandatory fees are paid by everyone who owns in the community and go toward maintaining the common areas.

These fees will be based on the size of your home and the amenities in your community, but for a typical single-family home, HOA fees can cost around $200 to $300 a month.

Utilities

Don’t forget to factor in utilities such as electric, gas, water, sewer, and trash. To get a clear picture of what you’ll be required to pay, ask your real estate agent to ask the sellers what a year’s worth of bills costs. Utilities can fluctuate from season to season, so this is especially important if you’re moving across the country to a new climate.

Deirdre Woollard contributed to this article. 

Buy or sell first? Chicken or egg?

Selling a home is stressful. Buying a home is stressful. Doing both? There should be a new word for that.

But somehow people do it, every day in every part of the country and in every market condition imaginable. So you can do this. And knowing what you’re in for and how to coordinate the sale and purchase aspects will make it more manageable.

Selling a home is stressful. Buying a home is stressful. Doing both? There should be a new word for that.

But somehow people do it, every day in every part of the country and in every market condition imaginable. So you can do this. And knowing what you’re in for and how to coordinate the sale and purchase aspects will make it more manageable.

Buy or sell first? Chicken or egg?

Like the proverbial poultry conundrum, there is no easy answer to which comes first, the buying or the selling. Whichever comes first will put additional pressure on the other side of the equation. But there is an order that will make sense for you. The first step is to take a good look at your finances, your willingness to move twice and the market conditions where you are buying and selling. Let’s look at three scenarios: Sell first, buy first or turn your existing home into a rental.

Sell first

Pros:
• You’ll have cash for a down payment
• No risk of having to juggle two mortgages at once
• No pressure to lower the price to sell quickly

Cons:
• May need to move twice
• Takes your investment out of the real estate market
• Puts pressure on you to find a new house quickly

If you’re like most of us, you don’t have cash to make a down payment on your new house and enough income to make two mortgage payments indefinitely. So it may seem like selling first is the smart, if not only, choice. But selling first leads to one major question: Where will you live in the time between selling and buying?

Gap housing

If you sell your home before you buy a new one you will almost certainly have a gap of time, whether it’s days or months, between needing to be out of the old house and when you can take possession of your new one. Do you mind moving twice, first into a rental or in with extremely hospitable friends or family? Can you find a rental that offers month-to-month leasing?

Even if you plan to sell first, it makes sense to start shopping for your new home right away. If you find one you want, you can be ready to make an offer as soon as your home sells. If nothing else, it gives you a head start and something to do while you’re vacating your home for showings.

It might seem less stressful to sell your home, rent an apartment and give yourself some time to take a breath and look around. But first look at the housing market. In a rising market, time is money. Once you’ve sold your home, you’re out of that market and the longer you wait to get back in, the more it will rise without you. Watching the value of the home you sold soar, along with the prices of potential new homes while you sit out a six-month lease is no fun. If you’re in a slow, or “buyers’ market,” you can probably afford to sit out for a while. But don’t wait too long or the market may turn around on you.

Rent-back

Wouldn’t it be nice if you could sell your house but stay in it until you buy a new one? You can, with the right sales contract. It’s called a rent-back provision. Essentially, when you sell your house you negotiate a deal to become a tenant for a period of time until you can buy and move into a new house. You’ll pay at least enough to cover their mortgage payment but you can stay put until your new home is ready, which can be priceless. There’s a hitch, of course. If you sell with a rent-back requirement, you’ll likely get fewer offers. You’ll also have a relatively short window of time to find a new home because buyers probably won’t want to wait for months to get into their new home.

Buy first

Pros:
• Only have to move once
• No pressure to pick a house that may not be exactly what you want

Cons:
• Pressure to sell quickly
• Financing can be hard to find – and expensive

If you want to be assured of moving directly into your new home without a pit stop as a renter, you’ll have to buy first. But unless you’re sitting on piles of cash that may seem impossible. It’s not. There are a couple of ways to make this work.

Contingency offer

The first and probably most appealing option from your standpoint is to make a “contingent” offer on your new home. What that means is that you enter into a contract to buy the new home when and if you sell your current one. (The contract will include an expiration date, so it’s not like you can promise to buy your new place and then lollygag about selling your old one.) But nothing in life is as easy as that, so of course there’s a downside. In a seller’s market, a contingent offer probably won’t be considered too seriously.

Sellers are already stressed about selling their own home, now you’re asking them to stress about you selling yours as well. A contingent offer also eats up most if not all of your negotiating room. So unless the house is seriously overpriced, the asking price will be the floor, not the ceiling of your offer. Talk to your agent about whether a contingent offer makes sense given local market conditions.

Borrow what you need

If the conditions aren’t right for a contingent offer, all is not lost. You may not have cash to make a down payment and keep up two mortgages. But you do have an asset that you didn’t have when you were a first-time homebuyer: Your home.

Assuming you’ve got some equity built up, you can use it to finance your next move. You may have heard about bridge loans. These are short-term loans to help “bridge” the gap between selling and buying. You can either get a bridge loan to completely pay off your existing mortgage and provide a down payment on your new home or you can get one that just provides a down payment. But beware. These are considered high-risk loans, so they come with a higher interest rate than a typical mortgage loan. They’re also trickier to get than they were a few years ago.

Today more people use a HELOC or Home Equity Line of Credit to finance a purchase before a sale. Essentially, it allows you to borrow against the equity in your home. You can draw money out as you need it to make your down payment and cover the extra mortgage. Like a bridge loan, it’s a short-term solution. (And lenders probably won’t offer you a HELOC if your existing home is already on the market.)

Even if borrowing gives you some breathing room, there is no way around it. If you buy first, you’re going to be under more pressure to sell your existing home.

Become a landlord

Pros:
• Skip the stress of selling
• Add to your real estate portfolio

Cons:
• Don’t get cash out to make down payment
• Stress of being a landlord/finding tenants
• Potential tax consequences

If you can cobble together a down payment without selling your house, either through a HELOC or stellar saving habits, you might want to forgo selling altogether and rent out your existing home. If you can get enough rent to cover mortgage and maintenance costs, it could be a good investment. However, there are tax implications as well as stress implications. So check with a tax adviser about your particular circumstances before committing to this option.

Bottom line: It depends

There are options and which one works for you probably depends upon market conditions. In a buyer’s market, you have more leverage on the buying-side of the deal so you may be able to make an offer to purchase contingent on the sale of your home. In a seller’s market, you may be better able to negotiate a rent-back of your current home. And in either case, invest in some stress balls or a gym membership to get you through.

Like the proverbial poultry conundrum, there is no easy answer to which comes first, the buying or the selling. Whichever comes first will put additional pressure on the other side of the equation. But there is an order that will make sense for you. The first step is to take a good look at your finances, your willingness to move twice and the market conditions where you are buying and selling. Let’s look at three scenarios: Sell first, buy first or turn your existing home into a rental.

Sell first

Pros:
• You’ll have cash for a down payment
• No risk of having to juggle two mortgages at once
• No pressure to lower the price to sell quickly

Cons:
• May need to move twice
• Takes your investment out of the real estate market
• Puts pressure on you to find a new house quickly

If you’re like most of us, you don’t have cash to make a down payment on your new house and enough income to make two mortgage payments indefinitely. So it may seem like selling first is the smart, if not only, choice. But selling first leads to one major question: Where will you live in the time between selling and buying?

Gap housing

If you sell your home before you buy a new one you will almost certainly have a gap of time, whether it’s days or months, between needing to be out of the old house and when you can take possession of your new one. Do you mind moving twice, first into a rental or in with extremely hospitable friends or family? Can you find a rental that offers month-to-month leasing?

Even if you plan to sell first, it makes sense to start shopping for your new home right away. If you find one you want, you can be ready to make an offer as soon as your home sells. If nothing else, it gives you a head start and something to do while you’re vacating your home for showings.

It might seem less stressful to sell your home, rent an apartment and give yourself some time to take a breath and look around. But first look at the housing market. In a rising market, time is money. Once you’ve sold your home, you’re out of that market and the longer you wait to get back in, the more it will rise without you. Watching the value of the home you sold soar, along with the prices of potential new homes while you sit out a six-month lease is no fun. If you’re in a slow, or “buyers’ market,” you can probably afford to sit out for a while. But don’t wait too long or the market may turn around on you.

Rent-back

Wouldn’t it be nice if you could sell your house but stay in it until you buy a new one? You can, with the right sales contract. It’s called a rent-back provision. Essentially, when you sell your house you negotiate a deal to become a tenant for a period of time until you can buy and move into a new house. You’ll pay at least enough to cover their mortgage payment but you can stay put until your new home is ready, which can be priceless. There’s a hitch, of course. If you sell with a rent-back requirement, you’ll likely get fewer offers. You’ll also have a relatively short window of time to find a new home because buyers probably won’t want to wait for months to get into their new home.

Buy first

Pros:
• Only have to move once
• No pressure to pick a house that may not be exactly what you want

Cons:
• Pressure to sell quickly
• Financing can be hard to find – and expensive

If you want to be assured of moving directly into your new home without a pit stop as a renter, you’ll have to buy first. But unless you’re sitting on piles of cash that may seem impossible. It’s not. There are a couple of ways to make this work.

Contingency offer

The first and probably most appealing option from your standpoint is to make a “contingent” offer on your new home. What that means is that you enter into a contract to buy the new home when and if you sell your current one. (The contract will include an expiration date, so it’s not like you can promise to buy your new place and then lollygag about selling your old one.) But nothing in life is as easy as that, so of course there’s a downside. In a seller’s market, a contingent offer probably won’t be considered too seriously.

Sellers are already stressed about selling their own home, now you’re asking them to stress about you selling yours as well. A contingent offer also eats up most if not all of your negotiating room. So unless the house is seriously overpriced, the asking price will be the floor, not the ceiling of your offer. Talk to your agent about whether a contingent offer makes sense given local market conditions.

Borrow what you need

If the conditions aren’t right for a contingent offer, all is not lost. You may not have cash to make a down payment and keep up two mortgages. But you do have an asset that you didn’t have when you were a first-time homebuyer: Your home.

Assuming you’ve got some equity built up, you can use it to finance your next move. You may have heard about bridge loans. These are short-term loans to help “bridge” the gap between selling and buying. You can either get a bridge loan to completely pay off your existing mortgage and provide a down payment on your new home or you can get one that just provides a down payment. But beware. These are considered high-risk loans, so they come with a higher interest rate than a typical mortgage loan. They’re also trickier to get than they were a few years ago.

Today more people use a HELOC or Home Equity Line of Credit to finance a purchase before a sale. Essentially, it allows you to borrow against the equity in your home. You can draw money out as you need it to make your down payment and cover the extra mortgage. Like a bridge loan, it’s a short-term solution. (And lenders probably won’t offer you a HELOC if your existing home is already on the market.)

Even if borrowing gives you some breathing room, there is no way around it. If you buy first, you’re going to be under more pressure to sell your existing home.

Become a landlord

Pros:
• Skip the stress of selling
• Add to your real estate portfolio

Cons:
• Don’t get cash out to make down payment
• Stress of being a landlord/finding tenants
• Potential tax consequences

If you can cobble together a down payment without selling your house, either through a HELOC or stellar saving habits, you might want to forgo selling altogether and rent out your existing home. If you can get enough rent to cover mortgage and maintenance costs, it could be a good investment. However, there are tax implications as well as stress implications. So check with a tax adviser about your particular circumstances before committing to this option.

Bottom line: It depends

There are options and which one works for you probably depends upon market conditions. In a buyer’s market, you have more leverage on the buying-side of the deal so you may be able to make an offer to purchase contingent on the sale of your home. In a seller’s market, you may be better able to negotiate a rent-back of your current home. And in either case, invest in some stress balls or a gym membership to get you through.

#millenniumsales #selling #waterhomeproperties #byowner

Zero-down!

The zero-down loan? It’s making a comeback

NEW YORK – June 16, 2017 – Buyers may soon be able to bring less to closing. They were blamed for precipitating the housing crisis years ago, but major lenders are giving no- and low-downpayment loans another shot.

Several major lenders are reportedly offering loans with just 1 percent down. Navy Federal, the nation’s largest credit union, offers its members zero-down mortgages in amounts up to $1 million. NASA Federal Credit Union markets zero-down mortgages as well.

Quicken Loans, the third highest volume lender, offers 1 percent downpayment options, as does United Wholesale Mortgage. And the Department of Veterans Affairs has offered zero-down loans to eligible borrowers for many years.

Also, Movement Mortgage, a large national lender, has introduced a financing option that provides eligible first-time buyers with a non-repayable grant of up to 3 percent. As such, applicants can qualify for a 97 percent loan-to-value ratio conventional mortgage, which is basically zero from the buyers and 3 percent from Movement. For example, on a $300,000 home purchase, a borrower could invest zero personal funds with Movement providing $9,000 down. The loan also allows sellers to contribute toward the buyer’s closing costs.

So far, the delinquency rates on these low- to zero-down payment loans have been minimal, according to lenders. Quicken Loans says its 1 percent down loans have a delinquency rate of less than one-quarter of 1 percent. United Wholesale Mortgages told The Washington Post that it has had zero delinquencies from the borrowers on its 1-percent down loan since debuting it last summer.

For Movement’s new loan product, the lender will originate the loans and then sell them to Fannie Mae, which remains under federal conservatorship. Fannie officials released the following a statement:

“(We’re) committed to working with our customers to increase affordable, sustainable lending to creditworthy borrowers. We continue to work with a number of lenders to launch (test programs) that require 97 percent loan-to-value ratios for all loans we acquire.” They add that there “is no commitment beyond the pilots,” which are “focused on reaching more low- to-moderate income borrowers through responsible yet creative solutions.”

During the housing crisis, zero-down loans were among the biggest losses for lenders, investors and borrowers. However, housing experts say the latest versions are different from years ago. Applicants must now demonstrate an ability to repay what’s owed. They also must have stellar credit histories and scores, and lenders require a lot more documentation to prove borrowers are in good standing.

Also, many of the programs are charging higher interest rates. For example, Movement’s rate for its zero-down payment option in mid-June was 4.5 percent to 4.625 percent, compared with 4 percent for its standard fixed-rate mortgages.

Some critics say that the borrowers who really could benefit from such options aren’t able to qualify for them. Paul Skeens, president of Colonial Mortgage Corp. in Waldorf, Md., told The Washington Post that “it seems like people without excellent credit scores and three months of [bank] reserves don’t qualify.”

Source: “No Down Payment? No Problem, Say Lenders Eager to Finance Home Purchases,” The Washington Post (June 14, 2017)

Buy a home, Millennium Sales, Berta Correa, Investing in Real Estate.

Hurricane season is here!!!

 

what did we learn from Matthew..

When Hurricane Matthew threatened South Florida last October, it gave the region a frighteningly realistic dress rehearsal for the hurricane season that begins Thursday.

Emergency operations centers cranked into action. Shelters opened, brigades of electrical workers went into the field and thousands of government workers set aside their usual jobs to attend to their hurricane battle stations.

The preparations exposed flaws, particularly in managing shelters. There were water shortages, long lines and an insufficient number of Red Cross volunteers. But the storm also showed that the billions spent hardening the electrical grid paid off, as Florida Power & Light was able to restore power much more quickly than in the past.

Officials say the brush with Matthew left South Florida in a stronger position to face whatever challenges come with the new season.

“Matthew was probably one of the best exercises we could have had, in terms of all the preparatory steps we had to take,” said Curtis Sommerhoff, Miami-Dade County’s emergency management director. “It gave us the ability to shake a little bit of the rust off.’’

Hurricane season runs through Nov. 30, with the peak coming in mid-August through September. The National Oceanic and Atmospheric Administration predicts this year’s season will be more active than usual, with five to nine hurricanes, of which two to four will be Category 3 or above, with winds of at least 111 mph.

Hurricane Matthew, which briefly reached catastrophic Category 5 strength, approached South Florida in early October, moving parallel to the coast until it made landfall Oct. 8 in South Carolina. The last hurricane to hit South Florida was Wilma, in 2005.

As Matthew loomed over the region, Palm Beach County was expected to get the worst of it. Officials opened 15 shelters and announced a voluntary evacuation of the coast.

Hardly anyone evacuated. The next day, the county issued a mandatory evacuation, and many coastal residents complied. Such a gradual approach is unlikely to be repeated.

“We originally said something like ‘We strongly encourage evacuations,’” said Bill Johnson, Palm Beach County’s emergency management director. “That could place a bit of doubt. In the future we’re going to be very clear about what we mean about evacuations. I don’t think we’re going to try to mess with voluntary versus mandatory. We’re just going to say ‘Evacuate, period.’”

Johnson said the county had doubled its number of shelters, but he said the Red Cross was unable to fully staff them. The county then quickly trained staffers to step in. Johnson said the Red Cross will retain a role in staffing shelters, but it will be a diminished one, supplemented with county workers.

Roberto Baltodano, spokesman for the American Red Cross – South Florida Region, denied there had been a staffing failure.

“The Red Cross opened and staffed every shelter requested by Palm Beach,” he said.

Another problem appeared at Palm Beach County’s pet-friendly shelter, which quickly got overcrowded — with people. The county requires that family members stay at the shelter with their pets, so each puppy might be accompanied by a family of four. Johnson said this year an additional shelter will be designated pet-friendly.

Still, Johnson said, “We did well in Matthew overall. In spite of the fact that it’s been a decade-long drought, I believe that for the most part our activities went according to plan.’

The Red Cross fully staffed shelters in Broward and Miami-Dade counties during Matthew, but this season the organization said it can staff only half of Broward’s 14 shelters, said county emergency management director Miguel Ascarrunz.

Ten Broward shelters were opened during Matthew and took in more than 2,000 people, according to the county’s report on its response, which listed several problems.

Long lines stretched outside shelters, with evacuees waiting up to two hours as police officers conducted background checks. Water wasn’t immediately available at some shelters. All three homeless assistance centers and the Broward Addiction Recovery Center evacuated 1,100 people by bus to Arthur Ashe Middle School in Fort Lauderdale and Coral Glades High School in Coral Springs, overwhelming them.

Still, shelter staff did “a remarkable job in a short amount of time,” according to the county’s report.

Ascarrunz said Broward has taken steps to deal with problems exposed by Matthew, including meeting with the Broward Sheriff’s Office to avoid to the background-check bottleneck and training 150 county workers to run the shelters.

“We’ve made good progress,” he said.

For Florida Power & Light Co. and its customers, the lesson from Matthew was clear: The investment of nearly $3 billion to harden the grid since the debacle of Hurricane Wilma has paid off.

Although Matthew knocked out power for about 2 million FPL customers, the company restored service to nearly 99 percent within two days. This was a big improvement over the aftermath of Wilma in 2005, when thousands of customers lost power for more than a week, with some waiting up to 18 days for the restoration of service.

Wilma, of course, was a direct hit on South Florida, not a glancing blow. After it struck, FPL was harshly criticized for poor maintenance that allowed rotted out power poles to topple in the storm. The investments made since then included replacing or reinforcing about 115,000 poles, as well as improving technology and redundancy throughout the grid.

“What we learned is that a lot of those investments really paid off for customers,” said FPL spokesman Chris McGrath. “Not a single one of the power poles that we hardened failed in Matthew.”