Category: Real Estate

5 Reasons to Buy a Home in 2016 | ZING Blog

If you’re thinking about buying a home, 2016 could be the time to do it. Yes, I know this is a mortgage company blog, but hear me out. There are several reasons why now is a great time to make your move on getting the house you’ve always wanted. We put our top five below.

Low Rates

You may have heard the Fed recently raised short-term interest rates for the first time in seven years. Although this may have some impact on mortgage rates as mortgages are trading on the bond market, you may not see as much of an impact as you think. Why is that? The people who trade mortgage bonds have been picking up on some not-so-subtle signals given by the Federal Open Market Committee, the governing body that makes decisions on short-term interest rates. In short, the Fed did exactly as everyone expected and the move has been pending for a while.

Rates also won’t be going down, so now is a good time to lock up your mortgage and its low rate.

Economic Uptick

The economy has showed signs of picking up over the last several months as evidenced by the number of jobs being added to nonfarm payrolls in the monthly employment report. Nonfarm payrolls include all jobs not related to agriculture.

Among other data, the most recent employment situation report covering November showed that 211,000 jobs were added to the economy. An additional 27,000 jobs were reported in a revision for October bringing the total number for that month to 298,000. This means that better than 500,000 jobs have been added to the U.S. economy in recent months. Unemployment is at a very low 5.0%.

Jobs mean money in Americans’ pockets. More money means more purchasing power for the home buyer. More purchasing power means finally being able to buy that home you’ve been looking at for a while.

Home Values

Real estate values are on the upswing. As of November, they’re up 4.84% since this time last year.

This is particularly important for homeowners to know. It can be easy to think of our homes as a place to put down roots, enjoy a sense of security and in many cases, watch our families grow.

There’s another element of homeownership that people might overlook. We don’t often think about the home as an investment. However, as you gain equity by making monthly payments or through increases in value in your area, you’re building on an investment.

You can use that equity down the line to cash out and pay for home improvements or other expenses. Maybe you use it to pay for your child’s college education. What you do with it is really up to you.

With home values rising right now, it’s an important reminder that your home can be a part of your investment portfolio. Check the status of your stocks, bonds and home value.

Renting vs. Buying

Renting can make a lot of sense when you’re first starting out. You’re building up your credit. Since you’re young, you probably only need a small space.

As you get older, the needle moves in the other direction. As your family grows and you need more space, the debate of whether to continue to rent or buy a house begins.

Another consideration is that the cost of rent is rising faster than inflation. The cost of renting is expected to go up between 3% and 5% in 2016.

In addition to potentially saving you money every month, you also gain equity when you pay down the mortgage, that is, when you pay both the principal and interest at the same time. Your property gains investment value every month in a way it never would with an apartment. You realize the potential of these gains, not your landlord.

Your house is also your personal space. You may have been limited in the things you could do to personalize your apartment or rental house. When you own the house, it becomes a blank canvas just waiting for you to paint your modern masterpiece – the ultimate expression of you. It’s your sanctuary.

Rocket Fueling Your Mortgage

Throughout most of the industry’s history, the mortgage process hasn’t exactly been pleasant or overly efficient. Quicken Loans is changing that.

We recently launched Rocket Mortgage with the idea of taking your mortgage approval process from days or weeks down to minutes. How did we do that?

Whether you’re sitting at home on your computer or at the real estate office on your phone, you can apply for your mortgage on the spot. You can even share your income and asset information automatically through one of our trusted partners. You don’t need to track down bank statements, pay stubs and W-2 forms. You can then pull your own credit report and Rocket Mortgage will show you the mortgage solutions for which you qualify.

In minutes, you’ll have a digital approval letter you can show to a real estate agent so they know exactly how much you can afford. Happy house hunting!

Checklist: Everybody You Need to Notify When You’re Moving | Zillow Porchlight

When you’re preoccupied with important relocation-related tasks, it’s easy to forget about informing relevant people and institutions of your upcoming residential move and subsequent change of address.

But notifying specific organizations and individuals of your relocation is essential for ensuring a smooth moving process and preventing various hassles and troubles with your mail and accounts.

Here’s a checklist of the people and institutions you need to contact when moving.

Family and friends

Naturally, your relatives and close friends should be the first to know that you are about to move house. Informing them of your imminent relocation as early as possible will not only give you the chance to ask them help you move, but, if you’re moving far away, will also provide you with enough time to say a proper goodbye and plan for different ways to stay in touch despite the distance between you.

Current employer

Unless you’re relocating to a different branch of your current company, you should inform your employer about your decision to move and leave your job as early as a month in advance.

This way, the company will have time to find a new person for your position, and you will be able to put all the relevant paperwork in order without any hassle.

Remember that your old boss will need your new address to send you tax documents and insurance information at the end of the year.

Landlord

If you live in a rental home, you should carefully review your tenant rights and responsibilities contained in the lease agreement. You will probably be required to notify your landlord of your intentions to move out at least 30 days in advance.

You need to prepare a written notice that clearly states your move-out date and your future address. It is also a good idea to include a brief statement about the excellent condition of the rented property and to request your security deposit back.

Postal services

Changing your address with the United States Postal Service should be among your top priorities when moving to a new house, as it will help you avoid many troubles and inconveniences.

To have your mail forwarded to your new place before you’ve updated your address with individual organizations and companies, you only need to fill out a change of address request at your local post office or at the USPS official website.

Utilities

To prevent service lapses and past-due bills you need to inform your service providers about your relocation plans. Arrange for the utilities at your old home to be disconnected on moving day, and have them reconnected at your new residence by the time you move in.

The utility companies you should contact when moving include electricity, gas, water, telephone, cable, Internet, domestic waste collection and other municipal services you may need.

DMV

When you move out of state, you’ll have to transfer your driver’s license and update your vehicle’s registration and insurance within quite a short time frame (10 to 30 days, depending on your new state).

It’s a good idea to visit the local office of the Department of Motor Vehicles at the earliest opportunity, inform them of your new address, and request all the relevant information about putting the required paperwork in order.

Government agencies

A number of government agencies should be notified when you’re moving to another state. Be sure to update your address with the local office of the Social Security Administration, the electoral register, and other relevant institutions.

The IRS

The Internal Revenue Service will need your actual home address to mail your tax return, fiscal notes, and other documents. All you need to do is print out and mail in the IRS’ Change of Address form soon after your relocation.

Financial institutions

To keep your finances in order, you must update your bank accounts and inform credit card companies, stockbrokers, and other relevant financial institutions of your new address either shortly prior to or immediately after your move.

Insurance companies

The insurance agencies that provide your life, health, and homeowners insurance policies should have your current address on file, as should any other organizations and individuals (such as your family attorney) who have dealings with you and your family.

Medical and educational facilities

When moving to a new state, you will have to enroll your children in a new school, find a new family physician, and transfer all your academic records, medical records, and prescription medicines. To successfully complete these important tasks you need to tell your doctors, dentists, vets and other healthcare providers, as well as the educational facilities your kids are attending, about your relocation and your new address.

Subscription services and clubs

Last but not least, you need to update your address with any sports, professional, or social clubs you are involved with. You should also notify the subscriber services department of any magazines or newspapers you want to receive at your new home.

You may have to personally visit some companies or institutions to notify them of your relocation, but in most cases you will be able to change your mailing address online or with a simple phone call. Postcards, e-mails, text messages, and social network announcements are also viable methods to inform people of your new address.

Six Tips to Attract Home Buyers This Winter – @Redfin

Selling your home in the winter pays off, but making your home shine in cold and snowy weather requires a bit more preparation. Here are six tips to get the most out of selling your home during the winter:

1. Price it competitively, the first time. Just because there is less competition in the winter, doesn’t mean a buyer will pay more than the home is worth. You can be aggressive, but if the price is too high, people will look elsewhere. Redfin analysts found that the week a listing goes on the market, it receives nearly four times more visits than it does a month later. If you drop the price later, it won’t get the same attention. You can use services like the Redfin Home Value Tool and Price Whisperer to get a sense of what your home is worth before you list, and be sure to talk to a knowledgeable agent who can help you set a realistic price.

2. Get professional photos. Even though your lawn is covered in snow and there are no leaves on the trees, it’s important to get high quality photos for online listings. Redfin recently released a study that reveals listing photos taken with professional-grade cameras sell for $3,400 to $11,200 more relative to their list prices.

3. Keep it warm and cozy. Make sure your “for sale” sign is cleared off and free of debris. Shovel snow and remove leaves from your walk, driveway, roof and foundation. If a deck or outdoor space is a selling feature, clear the snow/leaves and stage it with outdoor furniture and lighting.

4. Let in the light. The winter months can get dark and gloomy, so it’s important to take steps to make your home feel warm and inviting. Keep your heat on, open the shades, and turn on the lights (both indoors and outdoors), so people can clearly see your home while touring it.

5. Tidy up. Between holiday parties, family stays, and winter gear, it can be difficult to keep your home spotless. Find a place to keep coats, umbrellas and boots out of site, and stay on top of regular vacuuming, sweeping and dusting. It’s ok to keep tasteful holiday lights and decorations up until early January, but don’t leave them up through March.

6. Know the football schedule. Most open houses are held over the weekend, and generally in the afternoon. But from December to February, many football fans will be watching the game at that time. Try to schedule open houses before or after the home team’s games.

7 Financial New Year’s Resolutions You Should Make if You Want to Buy a House in 2016 | GOBankingRates

The mortgage and homebuying process is typically not an easy one. You need to have your finances, and your financial documents, in good order if you hope to get approved for a loan to buy a home. If you want to buy a house in 2016, here are several New Year’s resolutions to follow through on that can help make you a better homebuying candidate.

1. Create and Stick to a Budget

The new year is a great time to rework your budget, and to see if you have the room in your finances for the extra costs that come with a new home. “Once you move, the budget will certainly change — especially if you are moving from a rental to a home,” said Andrew Gipner, a certified financial planner with Longview Financial Advisors in Huntsville, Ala.

Some of the costs to plan for include things from home maintenance costs to “the potential increase in variable expenses, such as electricity and water, [and] additional expenses of property tax, insurance, private mortgage insurance … and maybe even homeowners association fees,” said Gipner. After you’ve accounted for all these extra expenses and added them up, you’ll have a clearer picture of how buying a home could affect your day-to-day finances.

Once you have a budget, you should take it for a test drive, suggested Katie Wethman, a certified public accountant and Realtor in the Washington, D.C. area. “Stick to your projected budget in advance,” she said. “Start following your new budget as soon as possible, and put any extra savings into a separate account.”

As you do this, you can see if this budget is realistic, making necessary adjustments to your spending habits — as well as your expectations for the kind of home you want to buy. “Then you’ll be used to living within your means, and you’ll have a nice balance in your savings account to get you started,” Wethman added.

2. Pad Your Homebuying Fund

Ideally you’ve already started setting money aside to purchase a home, if that’s a move you plan to make in 2016. However, it never hurts to further add to the funds you’ve stored to cover the costs of the purchase itself, from the down payment to closing costs and loan origination fees. If your homebuying savings are lacking, adding more to this fund would be a good goal to set for the new year.

How much you’ll need to have saved might depend where you live. A 20 percent down payment is a standard recommended amount to get a standard mortgage and avoid private mortgage insurance costs.

You can still get a mortgage with much less down — as little as 3.5 percent if you take advantage of a down payment assistance program, said Joshua Jarvis, a Realtor, and CEO and founder of Jarvis Team Realty in Georgia. But even these programs have other costs associated with them. “There’s some out-of-pocket expenses, such as inspection, appraisal and potentially others, depending on the state,” Jarvis said.

3. Save an Emergency Fund

In addition to a down payment and homebuying fund, homebuyers should also have a separate emergency fund saved. Having an emergency fund is always a good idea, but it becomes even more important when you’re a homeowner.

“Make sure that an emergency fund is fully funded in the event something goes wrong in the new house,” Gipner said. As you take on the liability of owning a home, you’re opening yourself up to getting hit by more frequent and more expensive emergency costs. For example, Gipner said one of his friends had to replace their water heater the day they moved into a new home. “With an adequate emergency fund — which should be between three to six months of your fixed and variable expenses — the replacement of things like your water heater can be [planned] for,” Gipner said.

There’s also an added bonus of having a nice emergency fund set aside: It makes you a more attractive borrower to lenders. If you have “proof of reserves,” or savings account statements showing you have three or more months’ worth of mortgage payments saved up, this will show that you won’t be broke after closing on the home, according to U.S. News. A lender might be more willing to approve you, or give you better terms, if you show you have savings on hand to cover emergencies like a loss of income.

Read: 8 Ways to Bounce Back From a Financial Setback

4. Get a Raise

Your income is a central factor that lenders consider when processing your mortgage application. It’s also the main determinant of how much home you can afford — or if you can afford to buy a home at all. Finding a way to increase your take-home pay will help you work toward other goals, like saving more and budgeting smarter, while at the same time helping you qualify for a home loan.

“Potential homebuyers often are not aware of their ‘qualifying income,’ which is the income a lender will use to qualify them for a mortgage relative to their debts,” said Matt Hackett, operations manager for Equity Now in New York City. To know if you’ll be able to meet these income requirements, Hackett recommended meeting with a reputable lender right away to see where you might be falling short.

If your income is a concern, it might be time to start working toward a raise. Since you have a few months to plan, start working hard and keep a record of how you add value to your team. When the time comes to ask for a raise, you’ll have some proof that you’ve increased you value to the company and deserve to see a raise in compensation to match.

However, when you’re preparing to buy a home, switching jobs can complicate your mortgage process, even if the new position comes with a jump in pay, according to mortgage entity Fannie Mae. Home lenders like to see a steady source of income, so it’s best to be able to show that you’ve been with your employer, or at least that you’ve earned consistently, for at least a year or two.

5. Improve Your Credit

In addition to income, credit history is another major factor when lenders consider your mortgage application. Those planning to buy a home in the near future can improve their chances of approval and getting favorable terms by working to improve their credit.

“A small rate change can really make a difference when you’re speaking about borrowing hundreds of thousands, or even millions, over decades,” said Elle Kaplan, CEO of LexION Capital Management in New York City. “That’s why I tell clients … that it’s worth it to delay getting a mortgage until their scores are as close to perfection as possible. The wait is definitely worth the savings you’ll receive on your dream home.”

While big credit score changes might take months or even years to achieve, you can still give your credit a boost by taking some positive actions. One way to boost your credit can be to pay down your debt, because your amount of debt is a major factor in your credit score. If you can pay down your credit card balances, your score could increase, according to credit score company FICO.

Also, apply for credit sparingly in the months leading up to your mortgage application. Getting a new credit card or an auto loan can be a red flag to mortgage lenders if you get one too soon before applying for a mortgage, according to mortgage entity Freddie Mac.

6. Pay Down High-Interest Debt

Those with high-interest debt like credit card balances should make paying them down a top financial resolution for 2016. “You should absolutely pay off any and all high-interest debt before purchasing a home,” Kaplan said.

Because these types of debt have high rates that work against you, they are more expensive and take longer to pay off. If you take on homeownership without getting rid of this debt first, “a mortgage will stretch your already-stressed finances even further, and make it even more difficult to tackle high-interest debt,” Kaplan said.

In addition to paying down debts, homebuyers should also resist the urge to charge. “Stay clear of big purchases during the process” of buying a home, said Bobby Atkisson, a branch manager with Community First Home Loans. “Anything you add to your credit will be added to your debt-to-income ratio. If you purchase a big item that has a high monthly payment before your loan closes, this could set off some serious red flags and eliminate your approval.”

7. Learn Some Home-Care Basics

One of the biggest benefits of owning a home is that you now have an investment. While there are still plenty of costs to homeownership, at least some of those will be going toward building equity in your home. “Your home is your biggest financial and physical set of assets that need to be managed, maintained, improved and eventually marketed when you want to sell in the future,” said John Bodrozic, co-founder of home management app Homezada.

Managing your home and preserving, or even building, its value will take some know-how. Pablo Solomon, an artist and designer who consults on home remodels, said to start investing in some basic tools, and learning about home care.

Century City Real Estate: Optimistic Outlook For 2016 As Mortgage Rates Remain Near Historic Lows Despite Fed Hike – westsidetoday.com

The Federal Reserve raised the short-term interest rates slightly from record lows on Dec. 16, 2015. This is the first interest rate hike since June 2006. The Federal Reserve found the economy strong enough to keep growing with a little less help from the central bank.

Despite the Fed’s rate hike, within a week of the increase, the average rate on the 30 year fixed mortgage went down falling to 3.96 percent from 3.97 percent according to mortgage lender Freddie Mac.

The Federal Reserve approved a quarter point increase in its target funds rate. It raised its key interest rate from a range of 0 percent to 0.25 percent to a range of 0.25 percent to 0.5 percent.

As Freddie Mac’s Chief Economist Sean Becketti explained, “The Fed raising short term rates by itself doesn’t have a very profound effect on mortgage rates.”

Long term interest rates are more closely tied to the yield on the 10 year U.S. Treasury which generally stays down as long as inflation remains low and investors keep buying Treasuries.

The Chief Economist also noted that a few more slight Fed rate hikes will not impact longer term rates until the central bank reduces the vast bond portfolio it acquired during the Great Recession. Such bond reduction is not expected to happen any time soon.

With long term mortgage lending rates remaining near historic lows and lending standards easing, the opportunities are looking better for prospective buyers.

The Fed’s rate hike will affect millions of Americans indirectly with regard to their purchasing power when it comes to buying a home.

The good news is it will become more desirable to have money in certificates of deposit. The interest rate hike is expected to lead to higher annual percentage yields on these financial instruments and other savings products.

Another side effect of the increase in interest rates is that people may find investing in the stock market riskier. When consumers have less disposable income, companies have less cash flow and the price of the company’s stock will decrease.

Treasury bills and bonds are seen as the safest investments and typically see a corresponding increase with interest rates.

While the Fed has little control over the interest rates on long-term debt such as mortgages, most experts predict long-term interest will also rise in coming years.

At the most recent Fed meeting, Fed officials indicated that short term rates will rise gradually and only if economic growth continues. They expect short term rates to rise by 1 percent per year for the next three years.

Those in the market for a new home should not feel pressured to buy quickly because of rising rates. The consensus among financial experts is that low fixed rate mortgages will be available for the foreseeable future even if the Fed continues to implement incremental rate increases.

Banks are still trying to bring more consumers in for home loans. Many lenders are reporting using easier credit standards, according to Fannie Mae and expect standards to ease rather than tighten in the near future.

While home affordability will still be a challenge for many, lenders’ thoughtful easing of credit standards should help to mitigate some of the affordability decline.

The rise in interest rates could increase competition among lenders and force them to ease some of the extra safeguards added after the Great Recession.

The San Francisco Federal Credit Union has begun a new revolutionary program they are calling the “POPPY LOAN” with no down payment. It stands for “proud ownership purchase program for you.”

Financing is available up to 100 percent of the purchase price of the loan or appraised value of the property, whichever is less provided a buyer qualifies.  This is game-changing for people who have good jobs and can qualify for the loan, but just do not have the typical 20 percent down payment.

This mortgage requires no down payment, however borrowers must work in San Francisco or San Mateo County and be purchasing a home in the San Francisco Bay area. The credit union is offering up to $2 million on a primary home purchase mortgage.

The loan is a 5/5 adjustable-rate product, which means it can only adjust at 5-year intervals. Also, the loan can only increase by 2 percentage points each time, up to 6 percentage points over the life of the loan. Customers are qualified on the payment difference should the rates change by 2 percent in the future.

Borrowers may also benefit from a new credit scoring model. Fannie Mae announced recently that it will start using so-called trending data in looking at mortgage applicants. This is a wider look at a borrower’s credit history which could help boost some scores.

While the rise in interest rates may cause financial difficulties for many Americans, some lenders have already begun to put programs in place to help customers keep home affordability within reach.

Why you should ignore popular advice about real estate investing | Inman

 

Key Takeaways

• Ignore what your eyes tell you about property’s appearance: study the numbers, cost of repairs and the area.
• Pay 20 percent to 30 percent under market value or move on to another deal.
• Buying in poorer areas means less competition for the deal, and it could make you 12 percent ROI or better.

There are so many myths out there about purchasing distressed properties in what people often call “problem” neighborhoods. Raise your hand if you ever heard this before: “Don’t ever buy a real estate investment in a bad neighborhood.”

I hear it all the time. It’s baloney.

If you just trust your eyes and only buy in nice areas, your chances for making money are slim. For instance, the real estate investing company Lifestyles Unlimited is a perfectly good organization that focuses on selling rental properties and related training.

In a recent blog, however, the company said this: “The whole idea of buying property for investment is to buy in hot or an up-and-coming neighborhood. Don’t waste your time or money investing in a property located in a poor or declining area.”

It is correct in the sense that you should definitely buy in an up-and-coming neighborhood. I do that all the time when I buy under-market-value houses in San Antonio.

I study the market and find the neighborhood near a hot area that I think is going to get hot next, and I snatch up $40,000 houses for cash before they go up to $80,000. I make 10 percent to 15 percent a year on most of these deals.

However, the rest of the quote is questionable: “The whole idea of buying property for investment is to buy in hot or an up-and-coming neighborhood.” If this means paying anywhere near market value, I don’t agree at all. That’s how investors end up making zero cash flow.

I will buy a 20 percent to 30 percent under-market-value house in a hot, affordable neighborhood (under $80,000 wholesale is my strategy). That makes a lot of sense. That type of deal will produce excellent cash flow if you don’t over rehab.

For example, a California investor bought this three-bedroom, one-and-a-half bathroom house in a rising area north of downtown San Antonio:

The investor bought it from me for $62,000 — approximately 30 percent under market value — and did $10,000 in repairs. He resold it with seller financing with $5,000 down, $89,900 price, $937 per month property, taxes and insurance (PITI). That’s 12 percent ROI.

Lifestyles Unlimited might consider this a poor neighborhood, but my investor doesn’t have to repair the house, and he makes 12 percent on his money. Now that’s real estate investing.

“Don’t waste your time or money investing in a property located in a poor or declining area.” I don’t buy in declining areas, but what defines a poor area?

Does that include households that make $2,500 or $3,000 per month? That’s 90 percent of the owner-finance buyers that helped me to financially retire before I was 30.

The majority of the neighborhoods that I invest in are considered poor areas, but they are on the way up, as the city is pouring revitalization dollars into parks, green space, walking paths and more.

For instance, this three-bedroom, one-bathroom home west of downtown is in a so-so area:

A three-bed-one-bath investment property.

Sure, it’s not pretty, but smart investors ignore what their eyes tell them and study the numbers, the nature of the repairs and the area. The repairs on this house to resell it were minor, and the nearby area has seen millions and millions of dollars in new construction and city funding.

The investor purchased it from me for $29,900 — about 30 percent under market value. After $7,000 for paint inside and out, foundation repair and clean up, it sold with seller financing for $5,000 down, $55,000, $550 per month PITI. That’s 11 percent ROI.

And this is in an area that most investors would consider poor. It is, however, on the way up.

Of course, you cannot simply go into any poor area and start buying cheap, distressed houses. That’s also a path to ruin. But if you only purchase investment properties in nicer areas, you will be fighting a lot of investors for any of the few deals that generate cash flow. That drives prices up to market value and beyond, and you can kiss your profits good bye.

Invest in distressed, under-market-value properties for true cash flow, but be certain to:

• Carefully study the market to learn which area is near a hot area and will likely go up in value in the next year.
• Get the property for at least 20 percent under market value to leave room for a profit of at least 25 percent on a flip and 10 percent ROI on a buy-and-hold.
• Owner finance the property to a qualified buyer — save yourself thousands in rehab costs. Do enough to sell the house and leave the rest to the new owner.

If you invest carefully in properties in poor or bad areas, you will end up with cash flow that all the poser investors simply dream of.

Predictions for the 2016 Housing Market | Money.com

The Fed has raised interest rates, millennials are getting older…so what does next year’s housing market look like?

No housing expert has a crystal ball, but Svenja Gudell, recently appointed chief economist for the housing site Zillow.com, has looked at enough data to make a pretty good guess.

She examines vast amounts of housing market statistics—everything from about where people are going to want to live to what areas will be hot to what the future could hold for renters—on a daily basis.

Reuters asked Gudell to share her insights on what she thinks the 2016 housing market will be like.

Reuters: What markets do you think will be places to watch in 2016?

Gudell: Next year, the combination of unemployment, population growth and the home value growth will make markets like Boise, Idaho, Salt Lake City, Utah, and Omaha, Nebraska, stand out.

Denver, Seattle, Dallas/Fort Worth and Portland, where inventory has been declining in the last year and demand continues to rise, will also be hot locations in 2016.

Are there some areas we should just give up on, instead of waiting for them to recover from the recession?

No. Cities are pretty good at reinventing themselves. There’s a city out there for everyone.

Location always matters in real estate, but are there any adjustments to that rule in 2016?

We have fairly low inventory in the cities. So next year, we’ll see first-time home buyers looking at suburbs—not just any suburbs, but those that are more dense, more walkable.

We’re also going to see an uptick in the number of condos being sold – especially for first-time home buyers. For a lot of folks, life happens not just inside their four walls but outside of them. Location, cost itself and nearby amenities will be most important.

Now that the Federal reserve has officially started to raise interest rates, what will the ripple effect be to the mortgage market in 2016?

Markets really haven’t reacted much. A lot of the expectations of the rate increase have already been built in.

 

As rates continue to rise—there will probably be four increases of 25 basis points each – we will start to see more of an impact at the coasts, in areas like Seattle, San Francisco, New York, and Miami.

These are already markets where people are already stretching. But, overall the effects will be relatively muted.

Is 2016 going to be the year millennials begin buying houses, now that they are older and the market is more recovered?

I feel like that was our prediction this year and it turns out we weren’t right.

Millennials are going to be bigger and bigger buyers in the market going forward. I don’t think next year we’re going to see a flood of millennials in one month or another. They’ll just trickle in.

They’re taking their time getting to the market and buying a home. They’re getting married later on in life. They’re having children later on in life. So they’re making home buying decisions later on in life.

One issue is that inventory is very low, especially on the bottom end of the price distribution. There are very few of those available, especially in these markets that have the most jobs. That’s particularly the case on the coasts. It’s a challenge for them. It’s a tough market. There is a lot competition.

What kind of new house trends are on the horizon for 2016? Are there any upgrades that are must-haves?

It’s tough with how few new homes are available, but there is a trend among builders to build larger homes on smaller lots. Land is fairly expensive so they are trying to maximize their profits given the high land costs.

Should we be optimistic or pessimistic or patient about housing in 2016?

I’m an optimist. I like to see the silver lining, but there’s going to be a lot of hurdles.

6 Stellar Reasons to Buy a Home in 2016 – Real Estate News and Advice – realtor.com

Is it really 2016 already?  For those of you who happen to be planning on buying a home in the new year—or even just trying to—there’s a whole lot to celebrate. Why? A variety of financial vectors have dovetailed to make this the perfect storm for home buyers to get out there and make an (winning) offer. Here are six home-buying reasons to be thankful while ringing in the new year:

Reason No. 1: Interest rates are still at record lows

Even though they may creep up at any moment, it’s nonetheless a fact that interest rates on home loans are at historic lows, with a 30-year fixed-rate home loan still hovering around 4%.

“Remember 18.5% in the ’80s?” asks Tom Postilio, a real estate broker with Douglas Elliman Real Estate and a star of HGTV’s “Selling New York.”“It is likely that we’ll never see interest rates this low again. So while prices are high in some markets, the savings in interest payments could easily amount to hundreds of thousands of dollars over the life of the mortgage.”

Reason No. 2: Rents have skyrocketed

Another reason home buyers are lucky is that rents are going up, up, up! (This, on the other hand, is a reason not to be thankful if you’re a renter.) In fact, rents outpaced home values in 20 of the 35 biggest housing markets in 2015. What’s more, according to the 2015 Rent.com Rental Market Report, 88% of property managers raised their rent in the past 12 months, and an 8% hike is predicted for 2016.

“In most metropolitan cities, monthly rent is comparable to that of a monthly mortgage payment, sometimes more,” says Heather Garriock, mortgage agent for The Mortgage Group. “Doesn’t it make more sense to put those monthly chunks of money into your own appreciating asset rather than handing it over to your landlord and saying goodbye to it forever?”

Reason No. 3: Home prices are stabilizing

 

For the first time in years, prices that have been climbing steadily upward are stabilizing, restoring a level playing field that helps buyers drive a harder bargain with sellers, even in heated markets.

“Local markets vary, but generally we are experiencing a cooling period,” says Postilio. “At this moment, buyers have the opportunity to capitalize on this.”

Reason No. 4: Down payments don’t need to break the bank

Probably the biggest obstacle that prevents renters from becoming homeowners is pulling together a down payment. But today, that chunk of change can be smaller, thanks to a variety of programs to help home buyers. For instance, the new Fannie Mae and Freddie Mac Home Possible Advantage Program allows for a 3% down payment for credit scores as low as 620.

Reason No. 5: Mortgage insurance is a deal, too

If you do decide to put less than 20% down on a home, you are then required to have mortgage insurance (basically in case you default). A workaround to handle this, however, is to take out a loan from the Federal Housing Administration—a government mortgage insurer that backs loans with down payments as low as 3.5% and credit scores as low as 580. The fees are way down from 1.35% to 0.85% of the mortgage balance, meaning your monthly mortgage total will be significantly lower if you fund it this way. In fact, the FHA predicts this 37% annual premium cut will bring 250,000 first-time buyers into the market. Why not be one of them?

Reason No. 6: You’ll reap major tax breaks

Tax laws continue to favor homeowners, so you’re not just buying a place to live—you’re getting a tax break! The biggest one is that unless your home loan is more than $1 million, you can deduct all the monthly interest you are paying on that loan. Homeowners may also deduct certain home-related expenses and home property taxes.

How to Pick the Right Kitchen Island | Zillow Porchlight

There are few better workhorses than the kitchen island. It’s beautiful, simple, and full of storage possibilities. Offering features from scratchproof counters for chopping to hooks, rods, and bins for stowing, the kitchen island is an invaluable addition to any home.

Best of all, there’s an island option for every style and budget. Here are a few of the best.

Sink space

If you’re looking for a creative sink solution, consider installing it in the kitchen island. This setup provides a central spot to wash your hands, drain pasta, scrub dishes or rinse produce.

Tucked away

Kitchen islands usually evoke visions of huge, solid, and largely immobile countertops reserved for spacious kitchens. However, tiny islands are slowly gaining momentum and becoming popular for their mobility, slim size, and ease of access.

Take a look at islands on casters, which can be positioned where they’re most needed, then tucked in a corner or underneath a counter when not in use.

 

Sit and stay

Kitchen islands are great for creating an extra sitting area, especially if your kitchen or dining room lacks the space for an actual table.

Choose an extra-long kitchen island with overhang to allow for a few bar stools or tall chairs. Add some festive placemats and a few dining accessories to create a unique tablescape, and clear it all away when you need some extra workspace.

 

Careful cubbies

One of the best ways kitchen islands add to a space is by providing unique storage options. In a room so full of doors and hardware, adding small baskets, hooks, and rods can be a fun way to stow your utensils, linens, or knickknacks. Even better, you can switch out the textures and finishes to match your favorite seasonal decor.

 

While kitchen islands are most often used as giant cutting boards, they’ve come full circle in design and function, and have proven to be a great way to add substance and style to any kitchen design. Take a look at your space, define your personal style, and determine your needs to find your perfect island oasis.

HBI’s Top Five Tips for First-Time Home Buyers in 2016

The housing market has changed dramatically over the last few years, swinging from boom to bust and now entering a full recovery. It’s a lot to keep up with. So let’s do a little catch-up. Here are the Home Buying Institute’s top five tips for first-time home buyers in 2016.

Top 5 Tips for First-Time Home Buyers in 2016

Loan limits have been revised. Mortgage rates are expected to climb. Home prices are leveling off in many cities across the U.S. These are just a few of the ongoing trends that are “baked” into our list of tips for first-time buyers.

1. Consider buying sooner rather than later, to save money.

The Federal Reserve recently raised the federal funds rate for the first time in seven years. Most economists expect home loan interest rates to rise gradually in 2016, partly as a result of the Fed’s policy shift. This is something home buyers will want to keep an eye on.

The economists at Freddie Mac recently predicted that 30-year mortgage rates would climb to around 4.7% by the end of 2016. They 30-year average is hovering around 4% right now, so that would be an increase of about 70 basis points (0.70%) over the next 12 months or so.

Home prices are another factor creating urgency among buyers, as we head into 2016. While home-price appreciation is expected to slow in many cities during 2016, that doesn’t mean it will stop entirely. It’s likely that house values will continue inching upward next year.

Tip for first-time buyers: There is no way to predict the future, in terms of mortgage rates and home prices. But the educated guess right now is that both will rise throughout 2016. So buyers who put off their purchases until later in the year could potentially pay more for a home and a mortgage.

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2. If you’re planning to use a mortgage, check out the new loan limits.

New loan limits were introduced in November and December, for both FHA and conventional mortgage loans. For the most part, the 2015 limits were carried over to 2016 with no changes. But in 39 counties across the U.S., conforming loan limits will increased in 2016. Additionally, FHA limits went up for 188 counties across the nation where home prices have risen sharply.

Tip for first-time home buyers: If you’re planning to use a mortgage loan to buy a house in 2016, you’ll want to review the new limits for your county. You can find FHA and conforming loan limits for every county in the U.S. on LoanLimits.org.

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3. Research your local housing market with an eye on sale prices.

First-time home buyers sometimes have unrealistic expectations. They want to check every single box on their wish lists, even when their budgets fall short. This leads to frustration and heartache. It can also cause problems during the negotiating stage.

These problems can be avoided with a bit of homework. Before you start house hunting in 2016, spend some time researching home prices. Visit property websites like Trulia, Zillow and Realtor.com. Zoom in on your local market and look at recent sales prices. This is the best indicator of what you can get for your money.

Tip for first-time home buyers in 2016: Shopping for a home without knowing the market is like going into a business meeting with a blindfold on. That’s no way to handle a major investment. Read everything you can find on local housing conditions, home price trends, market leverage, etc. Be a well-informed house hunter!

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4. Get a budget on paper, before you go any further.

Pop quiz. How much of a mortgage payment can you afford to pay each month? If you don’t know, you’ve got some homework to do. All too often, first-time home buyers rely on their lenders for budgeting advice. But that’s something you have to determine for yourself, and it’s best done early in the home buying process.

Most financial advisors recommend that you spend no more than 28% of your monthly income on housing costs. Another rule of thumb is to keep your total monthly debts (including the mortgage and everything else) below 36% of your gross monthly income. Statistically speaking, this is a manageable level of debt for most people.

First-time buyer tip: The numbers above are just guidelines. Your budget should be fine-tuned to match your financial goals, spending habits, and comfort zone. So feel free to deviate from the “rules” if needed.

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5. Check your credit score to see where you stand.

Credit scores are a big deal for mortgage lenders. When you apply for a home loan, the lender will review your credit score to see how you’ve repaid money in the past. That’s what this three-digit number shows — it’s a direct reflection of your previous borrowing history.

Lenders have different standards for credit scores. So there’s no single number that will make or break your chances of getting approved. Generally speaking, a FICO credit score of 620 or higher will put you in a good position to buy a home, while a score of 750 or higher could help you qualify for the lowest interest rates. But here again, the numbers are not set in stone.