When Is it OK to Tap Home Equity? | #HomeEquityUsageGuide #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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When Is it OK to Tap Home Equity? | Realtor Magazine

As home prices continue to rise, homeowners are finding they’re sitting on record amounts of home equity. People have mostly been shy about tapping into that wealth—but a new survey Bankrate.com survey of 1,000 consumers shows they have plenty of reasons they may want to take out a loan to unlock it.

Home equity survey

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Consumers’ “growing penchant toward debt might make it tempting to tap into their home’s value,” says Greg McBride, Bankrate’s chief financial analyst.

Nearly three quarters of homeowners recently surveyed say that home improvements or repairs are an acceptable reason to access the equity they have in their homes. In fact, more than half of those surveyed say that is the best reason to apply for a cash-out refinance loan or home equity line of credit (HELOC).

Survey respondents also cited other reasons they’d be tempted to use their home equity, including to consolidate debt (44 percent); pay for tuition or other educational expenses (31 percent); keep up with regular household bills (15 percent); and make other investments (12 percent). Nine percent of homeowners say they believe it would be a good idea to use home equity to purchase big-ticket items, such as appliances and furniture.

People with lower incomes were more likely than those who earn more to say it’s OK to tap into home equity to meet ordinary expenses, the survey found. Meanwhile, millennials seem more willing to tap into home equity than older generations, the survey found. Twenty-two percent of millennial respondents say that borrowing from home equity to pay day-to-day bills is a viable option, compared with 12 percent of members of older generations.

Many households may be overstretched financially, which could heighten the temptation to borrow. Forty-four percent of Americans say they could not cover a $400 emergency expense out of pocket, according to a recent Federal Reserve report.

“With the sorry state of emergency savings and increasing levels of consumer debt in a rising interest rate environment, it’s a matter of ‘when’ not ‘if’ more homeowners turn to home equity to fund home improvements and repairs, or consolidate debt,” McBride noted in the survey’s report.

Using equity to pay for home improvements that increase the value of your home can help rebuild any of the equity taken out, McBride says. The new tax law, that went into effect this year also allows homeowners to deduct the interest they pay on home equity loans and HELOCs if the proceeds are used to finance improvements that add significant home value.

Still, financial experts recommend caution for homeowners who are thinking of borrowing against their home equity, especially because using your home as collateral for a loan means you could lose it if you are unable to repay the lender.

“For a disciplined homeowner, using home equity to consolidate debt at a lower interest rate can be a savvy way to cut interest costs and accelerate debt repayment,” McBride says. “But for undisciplined homeowners, it ties up an asset that is put at further risk of foreclosure while the temptation to run up high-cost debt all over again proves difficult to resist.”

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Report: Market Could Stabilize as More Homes are Listed | #MarketShifts #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Report: Market Could Stabilize as More Homes are Listed | Realtor Magazine

Existing-home sales remained mostly flat in August, bringing relief to markets following four consecutive months of decreases. Sales gains in the Northeast and Midwest helped to offset downturns in the South and West last month, according to the National Association of REALTORS®’ existing-home sales report, released Thursday.

 

Existing-home sales report

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Existing-home sales—which are completed transaction for single-family homes, townhomes, condos, and co-ops—remained at a seasonally adjusted annual rate of 5.34 million in August, the same as July. Sales are 1.5 percent below a year ago, NAR reports.

“Strong gains in the Northeast and a moderate uptick in the Midwest helped to balance out any losses in the South and West, halting months of downward momentum,” says Lawrence Yun, NAR’s chief economist. “With inventory stabilizing and modestly rising, buyers appear ready to step back into the market.”

Here’s a closer look at some of the findings:

  • Home prices: The median existing-home price for all housing types was $264,800—up 4.6 percent from a year ago.
  • Inventory: Total housing inventory at the end of August was at 1.92 million existing homes for sale, up from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace.
  • Days on the market: Properties stayed on the market an average of 29 days in August, down from 30 days a year ago. Fifty-two percent of homes sold in August were on the market for less than a month. “While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” Yun says. “Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory—especially moderately priced, entry-level homes—would propel sales.”
  • All-cash sales: All-cash sales comprised 20 percent of transactions in August, unchanged from a year ago. Investors tend to make up the biggest bulk of all-cash sales. They made up 13 percent of home sales in August, down from 15 percent a year ago.
  • Distressed sales: Foreclosures and short sales accounted for 3 percent of sales in August, the lowest reading since NAR began tracking such data in October 2008. Broken out, 2 percent of sales were foreclosures and 1 percent were short sales.

“We are probably seeing a reaction to the uncertainty around how sustainable recent price increase will be in the near future,” says Ruben Gonzalez, chief economist at Keller Williams. “Nationally, we expect sales to continue to track slightly below last year’s levels as inventory starts to move upward.”

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30-Year Mortgage Rates Reach Highest Level Since May | #MortgageRatesHigh #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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30-Year Mortgage Rates Reach Highest Level Since May | Realtor Magazine

 

 

Mortgage rates for 30, 15, ARM. Full information at http://www.freddiemac.com/pmms/

© REALTOR® Magazine

 

For the fourth consecutive week, mortgage rates continued to climb as home buyers face higher borrowing costs.

“Mortgage rates are drifting upwards again and represent continued affordability challenges for prospective buyers—especially first-time buyers,” says Sam Khater, Freddie Mac’s chief economist. “Borrowing costs are moving right now for three main reasons: the very strong economy, higher U.S. government debt issuances, and global trade tensions.”

Khater says despite the uptick in rates, mortgage applications for home purchases have managed to increase on an annual basis for five consecutive weeks. “However, given the widespread damage caused by Hurricane Florence in the Carolinas, the next few months of housing activity will likely be somewhat volatile,” he adds.

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 20:

  • 30-year fixed-rate mortgages averaged 4.65 percent, with an average 0.5 point, rising from last week’s 4.6 percent average. Last year at this time, 30-year rates averaged 3.83 percent.
  • 15-year fixed-rate mortgages averaged 4.11 percent, with an average 0.5 point, increasing from last week’s 4.06 percent average. A year ago, 15-year rates averaged 3.13 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.92 percent, with an average 0.4 point, dropping from last week’s 3.93 percent average. A year ago, 5-year ARMs averaged 3.17 percent.
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Property Managers Cut Down on Late Rents with ACH | #LandLordingTip #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Property Managers Cut Down on Late Rents with ACH | Realtor Magazine

A data-driven analysis of 13,000 property managers and 135,529 tenants by Rentec Direct, property management software company, found that scheduled automatic monthly payments is the most effective way to prevent late fees and save renters money.

Of the 10,450 renters who have ACH currently enabled, 3,480 renters with ACH enabled and scheduled monthly rent payments were charged a late fee in 2017 (33%), while 4,932 renters with ACH enabled but did not have scheduled monthly rent payments were charged a late fee (47%). Meanwhile, of the 125,080 renters analyzed without ACH rent payment options, 77,299 were charged a late rent fee in 2017 (57%).

“The outcomes of the study showed significant differences in timely rent payments based on the implementation of automatic payment technology,” the report states. This is largely due to the fact that ACH online payment systems eliminate the need to manually initiate a payment each month. However, only 7 percent of the property managers in Rentec Direct’s study offered tenants an automatic rent payment option.

“Our data shows that those who are actively using ACH to pay their monthly rent had a 24 percent lower rate of paying late fees than those not using ACH at all,” according to the report. “Without any ACH set up at all, the rate of late fees skyrockets to nearly 60 percent.”

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Down Payments Jump to Record Highs | #HighDownPayments #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Down Payments Jump to Record Highs | Realtor Magazine

Home buyers are putting more money down on a home purchase than ever before. The size of down payments during the second quarter climbed to a median of $19,900, a record high, according to ATTOM Data Solutions’ research, which dates back to the first quarter of 2000. What’s more, this marks a 19 percent jump from $16,750 in this year’s first quarter.

 

house model and growing plant on row of coin money

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The median down payment was 7.6 percent of the median sales price of homes purchased with finances during the second quarter, according to the report. That percentage is at a nearly 15-year high.

With higher home prices, California buyers tend to bring the highest down payments. Among 103 metro areas, the places with the largest median down payments in the second quarter were: San Jose, Calif. ($306,000); San Francisco, Calif. ($220,000); Los Angeles, Calif. ($130,000); Oxnard-Thousand Oaks-Ventura, Calif. ($115,400); and Boulder, Colo. ($107,750).

“Buyers are upping the ante when it comes to down payments, evidenced by the record-high median down payment for homes purchased in the quarter, and an increasing number of buyers are getting help from co-buyers,” says Daren Blomquist, senior vice president at ATTOM Data Solutions.

The number of loans with co-buyers—which is multiple, nonmarried buyers—that were listed on the sales deed is climbing. A down payment on a co-buyer loan averaged 16.3 percent of the purchase price, which is more than double the average percentage for other buyers. The average down payment with a co-buyer is 51 percent higher than loans without co-buyers ($63,117 versus $41,749).

 

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Labor Shortages Push New Construction Costs Higher | #ConstructionLaborShortage #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Labor Shortages Push New Construction Costs Higher | Realtor Magazine

Builders are being forced to raise home prices and are having a more difficult time meeting project deadlines because of the ongoing labor shortage in the construction industry, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index. Eighty-four percent of builders say they have had to pay higher wages to subcontractor bids, 83 percent say they have had to raise home prices, and 73 percent say they can’t complete projects on time without more manpower. The number of single-family builders reporting labor and subcontractor shortages reached a record high in July.

 

Interior of New Home progress - With Insulation Material

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“The steepest upward trend has been in the share of builders saying the labor/subcontractor shortages are causing higher home prices, which increased by 22 percentage points between 2015 and 2018—to the point where it is now nearly tied with higher wages/sub bids as the most widespread effect of the shortages,” NAHB reports on its Eye on Housing blog.

The survey also shows other effects of the labor shortage, such as builders saying that, in some cases, they’ve been forced to turn down projects. The share of builders who have slowed down on accepting incoming orders has doubled between 2015 and 2018, from 16 percent to 32 percent. The share of lost or canceled sales due to labor shortages also has been on the rise, up to 26 percent in July. “Shortages are having a significant impact on production levels,” according to the report.

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6 Types of Mortgage Fraud Are Becoming More Prevalent | #MortgageFrauds #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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6 Types of Mortgage Fraud Are Becoming More Prevalent | Realtor Magazine

Mortgage fraud climbed 12.4 percent year over year in the second quarter of 2018, and about one out of every 109 mortgage applications has been found to contain false or misleading information, according to real estate data firm CoreLogic. “Because home prices are rising and demand is strong, most mortgage fraud in this type of market is motivated by bona fide borrowers trying to qualify for a mortgage,” says Bridget Berg, CoreLogic’s principal of fraud solutions strategy. “Undisclosed real estate liabilities, credit repair, questionable down payment sources, and income falsification are the most likely misrepresentations.”

 

Hand shadow casted over keywboard

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Fraud is most common in conforming mortgages with loan-to-value ratios of 80 percent or less, according to CoreLogic. The metro areas with the highest increases of fraud risk year over year are Oklahoma City; El Paso, Texas; Springfield, Mass.; Albuquerque, N.M.; and Spokane, Wash. Overall, the states with the highest incidences of mortgage fraud are New York, New Jersey, and Florida, according to the report.

CoreLogic identifies the following as the most common types of mortgage fraud:

  • Income fraud: An applicant misrepresents the existence, continuance, source, or amount of their income.
  • Occupancy fraud: An applicant deliberately misstates the intended use of a property as a primary or secondary residence or an investment.
  • Transaction fraud: The applicant misrepresents the nature of the transaction, such as an undisclosed agreement between parties, falsified down payments, non-arm’s-length sale, or use of a straw buyer.
  • Property fraud: An applicant intentionally misrepresents information about the property or its value.
  • Undisclosed real estate debt: An applicant fails to disclose additional real estate debt or previous foreclosures.
  • Identity fraud: An applicant alters their identity or credit history, or uses a false identity.

The largest uptick—22 percent—was in income fraud over the past 12 months, according to CoreLogic. Massachusetts, Colorado, Utah, Nevada, and Kansas have seen the most significant increases in income fraud over the past year, according to the report.

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How to Choose the Right School: 6 Tips for Parents | #SchoolResearch #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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How to Choose the Right School: 6 Tips for Parents

If you’re a parent, buying or renting a new home isn’t just about where you’ll tuck the kids into bed at night — it’s also about where you’ll send them off to school in the morning.

So, how can you be sure your dream house feeds into your child’s dream school? You’re going to have to do some homework.

1. Go beyond the numbers

Every state’s education department publishes an online “report card” for each district and school. But just as you wouldn’t buy a house based solely on square footage or listing photos, you shouldn’t select a school just for its test scores and teacher-to-student ratios.

Dr. Steve McCammon, chief operating officer at Schlechty Center, a nonprofit that helps school districts improve student engagement and learning, cautions that most reported test scores are for English and math. They don’t provide insight into arts or music programs or how well a school teaches critical thinking skills.

The right school isn’t something you can determine based on any statistics, numbers or even reputation, says Andrew Rotherham, co-founder of Bellwether Education Partners and writer for the Eduwonk blog.

“Don’t go where the highest test scores are or where everybody else says you should go,” he says. “Different kids want different things. Go to the school that fits your kid.”

Adds Rotherham: “The most important things are what does your kid need and what does the school do to meet those needs. Whether you’re talking public, private or charter, you can find excellence and mediocrity in all of those sectors.”

2. Take a school tour

Just as you’d look around potential homes before signing a contract, you’ll want to do the same with potential schools. Call and arrange to tour the school and observe.

“Be suspicious of any school that isn’t into letting you visit,” says Rotherham. Some schools may say visitors are too disruptive, but he calls that a cop-out. “With some fairly basic norms, you can have parents and other visitors around without disrupting learning.”

Sit in on a class or two and take notes. You want to see students who are genuinely engaged, not wasting time or bored. It’s OK for a classroom to have lots of talk and movement if it’s all directed toward a learning goal.

Schools should be relatively noisy places. McCammon says, “If you go into a middle school, and you hear no noises, I would be concerned that the principal is more interested in keeping order than in making sure kids are learning.”

Observe how teachers and administrators interact with the students and vice versa. Do they display mutual respect? “You don’t need to be an education expert,” says Rotherham.

See if student work is on display. “A good school is a school where, regardless of grade level, student work is everywhere,” McCammon says. “It means that place is about kids and their work.”

Talk to kids, too — they’re the subject matter experts on their school. And if you have friends with kids in schools you’re considering, ask them what they like and don’t like about their schools. Kids won’t try to feed you a line. “They’re pretty unfiltered,” Rotherham says.

Check out the physical space, suggests National PTA President Jim Accomando. However, don’t get caught up on the building’s age and overlook the quality of the programs going on inside.

Look for signs that the school community takes pride in the facility. It might not be pristine, but trash on the floors or signs of rampant vandalism are red flags. If you see something that seems off or odd, ask if there’s a plan to address it.

3. Check out the community

Go to a school board meeting for clues about the district. Are parents there because their children are being honored or their work is being showcased? Or are they there because of a problem? Likewise, attend a PTA or PTO meeting, and chat with the parents there. They are likely the most involved “outsiders” and can share school challenges and successes.

Another consideration: the makeup of the students. Chances are, if you opt for a neighborhood school, you’ll find a certain similarity between your kids and their classmates, because there are probably a lot of similarities between you and your neighbors. But a school that has a diverse student body offers a big benefit.

“We live in a diverse society,” Rotherham says. “If you want to prepare your kids for what their lives are going to be like in this country going forward, it’s important for them to have experience with diverse groups.”

Even if your child’s school isn’t particularly diverse, avenues like sports and music give them a chance to interact with students from different backgrounds.

4. Think long term

Today’s first-grader will be heading to middle school before you know it. Unless you plan on moving relatively soon, be aware of the middle and high schools in your district.

“If you pick a house because you love the elementary school, you’d better be psyched by the middle school and high school,” Rotherham says. “Or have some kind of a plan” for post-elementary years.

Of course, there is such a thing as planning too far ahead. The music prodigy wowing your friends at her third-grade recorder performance may decide she hates band and wants to focus on soccer by the time she hits middle school. Rest assured: If upper-level schools in your prospective district are about kids doing great work, they’ll likely be a good fit.

5. Watch for boundary issues

Pay attention to the boundaries of prospective school districts. The houses across the cul-de-sac could be in a different school service area or even a different school district. And boundaries often change. To be sure, call the school district and give them the specific address you’re interested in.

Don’t assume you can fudge an address or get a waiver to enroll your children in a school or a district that doesn’t match your address. Things that were allowed last year may not be this year. If an individual school or district is at capacity, they will get very picky about enrollment outside of the school assigned to your home, which can lead to heartbreak if you find yourself on the wrong side of that boundary line.

6. Look for a place where you feel welcome

Whatever involvement you put into your child’s school will pay off, says Accomando. “If you can be engaged at school, you will understand the pulse of what’s happening there.”

He also says that doesn’t mean getting sucked into a huge commitment. “You can read in your child’s first-grade class. You can hand out water at a fun run or contribute something for a teacher appreciation party at the high school. And when you do, walk the halls and see what’s happening.”

McCammon says good schools should welcome parents as volunteers and visitors. “Look for evidence of parents feeling comfortable and engaging with the school,” he says. The principal should be someone you feel comfortable talking with if there’s a problem.

No matter how welcoming the school, it’s natural to have some butterflies on the first day in a new school. Just as it takes time for a new house to feel like home, it takes time for kids to settle into a new school.

Once they’ve found their way to the restroom without asking directions, made some friends and gotten to know their teacher, they’ll be comfortable with their new learning home. And your research will have been well worth the effort.

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Home Prices Are So High, Pending Sales Have Dropped For 7 Months In A Row | #MarketSlowDown #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Home Prices Are So High, Pending Sales Have Dropped For 7 Months In A Row

Pending home sales dropped 0.7 percent month-over-month and 2.3 percent year-over-year to 106.2 — the seventh consecutive month of annualized declines, according to the latest National Association of Realtors (NAR) Pending Home Sales Index (PHSI), released on Wednesday. PHSI tracks home sales in which a contract is signed but the sale has not yet closed.

“Contract signings inched backward once again last month, as declines in the South and West weighed down on overall activity,” said NAR Chief Economist Lawrence Yun in a press release.

“It’s evident in recent months that many of the most overheated real estate markets — especially those out West — are starting to see a slight decline in home sales and slower price growth.”

“The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it,” he added.

Looking forward, Yun expects existing-home sales to decrease 1.0 percent to 5.46 million, and the national median existing-home price to increase around 5.0 percent. In 2019, Yun predicts that existing sales and home prices will rise by 2 percent and 3.5 percent, respectively.

“Rising inventory levels — especially if new home construction finally starts picking up — should help slow price appreciation to around two-and-four percent, which will help aspiring first-time buyers, and be good for the long-term health of the nation’s housing market,” said Yun.

The PHSI in the Northeast and Midwest experienced month-over-month gains of 1.0 and 0.3 percent, but failed to make any positive headway on an annualized basis. The South and West experienced month-over-month losses of 1.7 percent and 0.9 percent, respectively, and year-over-year declines of 0.9 percent and 5.8 percent.

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Mortgage Rates Jump to 6-Week High | #RatesGoingUpAgain #TalkToYourAgent #SiliconValleyAgent #YajneshRai #YourAgentMatters #01924991

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Mortgage Rates Jump to 6-Week High | Realtor Magazine

 

 

Mortgage rates for 30, 15, ARM. Full information at http://www.freddiemac.com/pmms/

© REALTOR® Magazine

 

A strong job market and consumer credit are driving up mortgage rates for the third consecutive week and now to their highest level in six weeks. Mortgage rates are 0.82 percent higher than a year ago—the largest year-over-year increase since May 2014, Freddie Mac reports.

Despite the higher rates, Sam Khater, Freddie Mac’s chief economist, expects buyer demand to remain high. “This spectacular stretch of solid job gains and low unemployment should help keep home buyer interest elevated,” Khater says. “However, mortgage rates will likely also move up, as the Federal Reserve considers short-term rate hikes this month and at future meetings.”

Freddie Mac reports the following national averages with mortgages rates for the week ending Sept. 13:

  • 30-year fixed-rate mortgages: averaged 4.60 percent, with an average 0.5 point, up from last week’s 4.54 percent average. Last year at this time, 30-year rates averaged 3.78 percent.
  • 15-year fixed-rate mortgages: averaged 4.06 percent, with an average 0.5 point, climbing from last week’s 3.99 percent average. A year ago, 15-year rates averaged 3.08 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.93 percent, with an average 0.3 point, unchanged from last week. A year ago, 5-year ARMs averaged 3.13 percent.
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