Category: Real Estate

97-Year-Olds Can Still Get a 30-Year Mortgage | Realtor Magazine

Older Americans may not realize that they can still qualify for a mortgage, even though the Equal Credit Opportunity Act forbids discrimination in the mortgage market on the basis of age.

Yet, Mary Babinski, a senior loan officer with Motto Mortgage Champions in Trinity, Fla., told The Wall Street Journal that when a 97-year-old applicant came to inquire about a mortgage, he was even surprised he could still qualify for a 30-year mortgage. Older borrowers are eligible to get loans that will expire even up to their 130th birthdays.

More lenders are trying to promote to retirees that they can still qualify with special lending programs geared to them.

Borrowers over the age of 65 comprise about 10% of all mortgages that are originated each year, according to the Federal Housing Finance Agency.

But without a full-time job any longer, some retirees may wonder how they’ll qualify with limited monthly earnings. Lenders are qualifying older adults for a mortgage based on their pensions, Social Security, dividends, and interest they have available. They’re also showing more willingness to work with retirees to help qualify them based on either their income, distributions, or assets.

Jumbo mortgages aren’t off the table either. Richard Barenblatt, a mortgage specialist with GuardHill Financial in New York, told WSJ that he was able to get an 83-year-old retired Manhattan co-op owner a $1 million, 10-year, interest-only adjustable-rate mortgage for a refinance at a “highly competitive rate.”

How Much Savings a Higher Credit Score Can Unlock | Realtor Magazine

A higher credit score could mean thousands of dollars in savings on a mortgage, according to a new study from LendingTree that compares very good credit scores to fair ones.

A fair credit score is considered in the range of 580 to 669, while a very good credit score ranges from 740 to 799.

The average borrower with a fair credit score will pay about $261,076 in total interest over the lifetime of their mortgage. On the other hand, a borrower with a very good score will pay $219,660—a $41,416 difference.

When LendingTree broke down the most common type of debts—credit cards, student loans, auto, and more—mortgages occupied the highest in interest paid by a borrower by far.

What Exactly Do Closing Costs Cover? | Realtor Magazine

A home costs more than just the sale price. For example, closing costs—which make up about 2% to 5% of the home’s purchase price—are a major added expense. Michael Hyman, a research data specialist at the National Association of REALTORS®, shares the charges that make up closing costs in a post at the association’s Economists’ Outlook blog so that home buyers can be prepared.

Lenders provide a Closing Disclosure at least three business days prior to closing on a mortgage. But buyers will need to budget for these added costs ahead of time to avoid sticker shock days before closing.

Origination fees.This is the fee charged by lenders for processing the application and underwriting it. The fee typically ranges from about 0.5% to 1% of the borrower’s mortgage. Sometimes, it’s higher for smaller loans because “the fixed costs are a higher percentage of a smaller balance,” Hyman notes.

Service charges.These include items such as the appraisal, credit report, flood determination and certificate, tax status, pest inspection, title search and insurance, and survey fees. Appraisals and surveys can cost anywhere between $300 to $500 each. Title services can add up to about $2,000, so buyers may want to shop around for that.

Transfer taxes and recording fees.Transfer taxes vary by state but can run up to 2.7% in parts of New York. “It does not matter if the buyer or seller pays, as long as the transfer tax is paid to the government, so transfer taxes can be negotiated between the buyer and seller,” Hyman writes.

Escrow items.Homeowners insurance, property taxes, and primary mortgage insurance (if applicable) also are added fees. Buyers moving into a homeowners association may need to pay monthly dues for the upkeep of the community.

Hyman offers the following example for how these costs can add up: A buyer is purchasing a $275,100 home with a 5% down payment. The loan amount is $261,345. Closing costs are estimated at 2.5% of the loan value—so $6,533. The buyer made a $2,000 earnest money deposit, so they would need to bring $4,533 in cash at the time of closing. “Altogether, this means that the potential homeowner will need to have access to approximately $18,300 in cash to pay for the down payment and closing cost net of the earnest money deposit,” Hyman says.

Slight Uptick in Mortgage Rates Won’t Stymie Demand | Realtor Magazine

© REALTOR® MAGAZINE

 

The 30-year fixed-rate mortgage averaged 3.65% this week, continuing to entice home buyers to the market with cheaper financing opportunities. “By all accounts, mortgage rates remain low and, along with a strong market, are fueling the consumer-driven economy by boosting purchasing power, which will certainly support housing market activity in the coming months,” says Sam Khater, Freddie Mac’s chief economist.

Still, worsening affordability due to inventory shortages continue to present hurdles for the housing market, Khater notes. The National Association of REALTORS® released a study this week showing how high home prices are stymieing job growth in some metro areas.

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 16:

• 30-year fixed-rate mortgages: averaged 3.65%, with an average 0.7 point, rising slightly from last week’s 3.64% average. Last year at this time, 30-year rates averaged 4.45%.
• 15-year fixed-rate mortgages: averaged 3.09%, with an average 0.7 point, inching up slightly from a 3.07% average. A year ago, 15-year rates averaged 3.88%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.39%, with an average 0.3 point, rising from last week’s 3.30% average. A year ago, 5-year ARMs averaged 3.87%

Weekly Mortgage Applications Surge 30% | Realtor Magazine

Homebuyer demand hit its highest level in 11 years, as January continues to shape up to be a hot month for the housing market. Weekly mortgage applications jumped 30% for the week ending Jan. 10, a sign that home buyers are emerging, the Mortgage Bankers Association’s seasonally adjusted index shows.

“The mortgage market saw a strong start to 2020,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA. “Applications increased across the board. Lower rates provided a larger incentive for borrowers to act.”

Indeed, the average 30-year fixed-rate mortgage decreased to its lowest level since September, averaging 3.87%, the MBA reports.

Applications for home purchases, a gauge of home buying activity, jumped 16% last week, reaching the highest level since 2009.

Refinancing applications saw the biggest jump last week among those applying for home loans, a 43% increase over last week. Refinance applications are 109% higher than a year ago. “Refinances increased for both conventional and government loans, as lower rates provided a larger incentive for borrowers to act,” Kan says.

3 Trends Designers Want to Leave in the 2010s | Realtor Magazine

Paint firm Sherwin Williams surveyed 700 professional interior designers to learn the three major trends that they want to leave in the last decade. Here are the trends they said they’re most tired of:

Macramé

The boho trend of last year is fading fast, and one of the signatures of the look–macramé—is quickly losing fans. Twenty-two percent of designers chose macramé as their least favorite design trend in the last decade.

All-gray interiors

Nineteen percent of designers surveyed called all-gray interiors one of the worst trends of the past decade. Gray is beingpushed aside as the reigning neutral. White interiors have slightly more fans: For comparison, only 12% of designers called all-white interiors a fading trend.

Shiplap

Thirteen percent of designers said this wood wall treatment is another trend they hope stays in the 2010s. Shiplap had become a signature of the modern farmhouse style, but now designers are calling it overdone.

The Sherwin Williams survey also showed these other trends were among the ones that designers say they’re growing tired of: tribal prints (11%), concrete countertops and accents (6%), and accent walls (4%).

3 Staging Trends That May Turn Off Buyers | Realtor Magazine

Home staging can show off a home in its best light. Adding simple, updated decor can make a space feel warm and inviting. But there are a few popular trends in home design that stagers say you should avoid when prepping a home for sale:

Too many mixed metals

Mixed metals are a hot home trend, such as combining brushed nickel with matte black. It can add dimension and depth to your design. But don’t go overboard; some fixture finishes don’t look right with others. “Brass nickel is out,” Janice Rosenberg, a real estate pro in Raleigh, N.C., told HomeLight. “Getting rid of that helps update a home. Brushed nickel is fine, and oil rubbed bronze is typically fine.” Designers suggest using two or three mixed metals at the most. Don’t have every fixture be something different. “Pick one that will be the dominant finish, then one or two additionally complementary colors of a cohesive look,” HomeLight notes.

Accent walls

Color pops are a hot trend, and the colors of 2020 are a lot bolder. But neutral palettes still reign in staging. Avoid adding color pops by painting a large wall a bright color for one accent wall. Keep the colors neutral and add pops of color instead through artwork, accessories, furnishings, etc. Wallpaper is another popular trend at the moment but it “can add visual clutter,” Rosenberg says.

Cheap decorations

Stronger personalities are being expressed through current home designs. But the mantra in staging is still to stay neutral and try to appeal to the largest buyer pool. That doesn’t mean stripping a listing of all personality, though. “Don’t just pick up generic, plastic, or cheap decor,” Homes.com notes on its blog. “Have a fresh vase of flowers visible upon entering the home; even go the extra mile to make sure everything is sparkling clean and nicely placed.” Stick with classic choices for home decor so the home appeals to a broad audience of buyers, but also don’t get rid of accents that are unique to showcase the personality of the home.

Consumers: Agents Are as Valuable as Therapists | Realtor Magazine

Home sellers and buyers really like and trust their real estate agents. Seventy-three percent of home sellers agree that their agent was as valuable as a therapist. Sixty-four percent of home buyers agree their agent knows them better than their next-door neighbor, according to a new consumer survey conducted by Century 21 Real Estate.

But with all that weight placed on the agent’s value and importance, the survey also found that consumers tended to be in a rush to commit to an agent. They interviewed two agents, on average, before deciding on whom to hire.

“We’re seeing a real disconnect within the real estate industry today where home buyers and sellers are extremely invested in the outcome of their transaction, yet they seem to be shortchanging themselves on the front end by rushing the vetting process to find the right agent to help them navigate what for most is the biggest emotional and financial decision in their life,” says Mike Miedler, president and CEO of Century 21 Real Estate LLC. “Defying the mediocrity that still exists in the real estate industry is a major part of our mission, and every potential home buyer or seller should be extremely selective in whom they entrust to shepherd them through this complicated process.”

Those who rush to commit to an agent may risk aligning themselves with a person who makes them less satisfied with the level of service. A survey of 500 home buyers and sellers conducted by Wakefield Research found that 34% of recent buyers were not very likely to rehire their real estate pro.

Some consumers also expressed feeling abandoned by their real estate pro. Since closing on a home, nearly a quarter—23%—of consumers said their real estate agent had not reached out to make contact with them, the Century 21 survey showed.

Additional findings from the survey:

• Greatest life achievement: Nearly three-fourths of surveyed consumers—or 70%—ranked buying a home as one of their top three greatest life achievements. Buying a home was second only to getting married (76%).
• How agents added value: Home buyers surveyed said the top ways their agent added value to the transaction was by providing information about the market (23%) and navigating the overall process (22%). Home sellers said their agent most added value with their knowledge of the market (73%), advice and counsel (72%), their assistance navigating the stress (53%).
• Couples don’t see eye-to-eye: Only 17% of couples in a relationship said they were perfectly matched on which real estate agent to use. 

Islands Continue to Be Main Draw in Kitchen Design | Realtor Magazine

Make sure that kitchen island shines because home buyers may increasingly be sizing it up. Large islands are a prominent feature in kitchen design today, and most remodeling homeowners are putting high importance on this central kitchen spot.

In a survey of nearly 2,600 homeowners conducted by Houzz, a home remodeling website, one third of homeowners said they added an island during renovations and nearly a quarter of owners said they upgraded their current one.

Islands are getting bigger. A third of remodelers had kitchen islands that measured seven feet long, while another 39% had one that was six to seven feet long.

For the finish of the island, two in five renovating homeowners added or upgraded their island cabinets for a contrasting shade to their main cabinets. Gray was the most popular choice for that at 26%, followed by blue (19%) and black (11%).

Contrasting the countertop colors of the island was also common among remodelers. The most popular choices for contrasting the island was white (23%) and medium wood (21%).

Remodelers also made sure their island had storage features too. Further, more than half—or 52%—featured built-in appliances, such as microwaves, dishwashers, garbage disposals, cook tops, and beverage refrigerators.

© Jessica Cain / Houzz

The Houzz survey found that of major kitchen remodels completed in mid-2019, homeowners spent an average of $35,000—which is up 17% from a year ago. Houzz considered a “major kitchen remodel” as one that included at least all cabinets and appliances being replaced. While spending is up, fewer homeowners this year, however, opted to upgrade countertops or sinks as well as tackling structural changes, like opening the kitchen to other interior rooms.

“It is remarkable to see median spend on kitchen remodels grow by double digits for the third year in a row,” says Nino Sitchinava, Houzz principal economist. “Combined with a two-year decline in the scope of kitchen remodels, spend increases confirm our findings of significant price inflation in the home remodeling industry due to changes in international trade policy. Homeowners are dealing with increasing product prices by substituting materials, as indicated by slower growth in the use of engineered quartz and a decline in the popularity of engineered flooring materials, highly impacted by tariffs on imported materials from China.”

Some additional kitchen trends that emerged from the Houzz survey:

• Taller backsplashes: More backsplashes in the kitchen were installed that stretched all the way to the ceiling. Or, homeowners installed tile from their counter to their upper cabinets or range hood. The most popular colors for backsplashes: white (35%), multi-colored (20%), and gray (15%).
• Vinyl flooring: Vinyl flooring is becominga trendier choice for renovated kitchens. This hardwood alternative has climbed in popularity from 10% in 2018 to 14% in 2020 among remodelers.
• White shaker cabinets: White continues to be the most popular cabinet color (45%), followed by medium wood (11%) and gray (10%). Shaker cabinet door styles are by far the most popular choice among remodelers.
• Recessed lights: The most popular light fixture upgrade among remodelers is adding recessed lights, at 69%, followed by under-cabinet and pendants lights (65% and 56%, respectively). Ninety-two percent of homeowners upgrading their kitchen island also chose to install new lighting above the island.

Some Buyers Purchase a Second Home First | Realtor Magazine

Some first-time buyers are opting to buy the vacation home before their first home. They’re being priced out of their current area—such as in cities like New York and San Francisco—so they’re opting to buy a vacation home in more affordable towns.

“I’m seeing this more and more,” Svetlin Krastev, an investment advisor with Black Sea Gold Advisors in Kingston, N.Y., told CNN.com. “People want to have exposure to real estate, but it would take all of their assets to get a residence in the city.”

For example, Bart Higgins rents a four-bedroom converted warehouse in Brooklyn, N.Y., with his wife and twin five-year-old children. They pay $5,300 a month. The property would cost between $2 million to $3 million to buy. So the couple purchased a vacation home near Kingston, N.Y., a unit with three buildings on 33 acres with a lake. They bought it for $300,000.

“We bought our first home as a second home as a way to relieve the pressure and buy us some time,” Higgins told CNN. They use Airbnb to offer short-term rentals of the property to help supplement expenses when they’re not there.

Financial planners, however, warn that buying a second home first could take up all of a person’s assets and delay them from being able to purchase a “first” home or a main residence. “Having a loan commitment on a second home will make it that much more difficult to buy what will be used as a first home,” JP Geisbauer, a certified financial planner at Centerpoint Financial Management, told CNN.

Others disagree and say that for urban professionals, it can pay off buying the second home first. A smaller mortgage on a vacation home may be more manageable than a larger mortgage in the city. Also, “the ability to rent out the property easily on home sharing sites makes it a more affordable way to grow equity,” Malissa Marshall, a certified financial planner with Soaring Wealth, told CNN.