Do the math: Buying a home now may be more affordable and save some cash
- At July 22, 2020
- By NikkiReagan
- In Uncategorized
0
(BPT) – At a time when the strength of the U.S. economy and personal finance is on most renters’ minds, low down payment mortgage options are more appealing than ever. With mortgage interest rates being at historic lows, it is possible to qualify for a home loan while keeping a rainy day fund.
Private mortgage insurance (MI) has been around for decades and helped over 1.3 million homebuyers last year. It is a temporary cost that allows for a down payment as small as 3% of the purchase price. While some borrowers wait until they save 20% for a down payment, the added years of saving can translate to higher interest rates and more expensive home prices.
“Renters who are on the hunt to buy should do the math and consider what is best for them, because many times they will find that buying with a low down payment insured mortgage is in their best interest. It may enable them to attain homeownership sooner than they otherwise could, which helps them take advantage of historic low rates and keep some of their savings intact,” said Lindsey Johnson, President of U.S. Mortgage Insurers (USMI).
If you are one of these renters looking to buy your first home but don’t have 20% down, don’t worry, you are not alone. According to the National Association of Realtors, the median down payment in 2019 was 6% for first-time buyers.
It is true you can qualify for a conventional mortgage with a down payment as small as 3% of the purchase price. In today’s market, it could take a family earning the national median income up to 21 years to save 20%, according to calculations by USMI.
How can buying now save you money later?
Consider you want to purchase a $275,000 home. When you account for closing costs (about 3% of the sales price), a 5% down payment is $13,750 versus $63,250 in cash for 20% down. With a 740 credit score at today’s MI rates, your monthly MI payment would be about $115, which is added to your monthly mortgage payment until the MI can be cancelled. MI typically cancels after five years.
With home price appreciation, today’s $275,000 home will likely cost more in the years ahead. This will also have an impact on the necessary down payment and length of time required to save for it. There are other variables in the equation too, such as interest rates. As interest rates rise, so too will the cost of mortgage financing.
Not all MI is the same. Importantly, so-called “FHA Loans” are government-backed loans insured by the Federal Housing Administration versus a private insurer. These mortgages require a slightly higher down payment, the insurance is permanent, and the monthly premiums generally cannot be cancelled.
Make sure you do the math. There are many online mortgage calculators that can help. Check out lowdownpaymentfacts.org to learn more.
A Historic Rebound for the Housing Market
- At July 02, 2020
- By NikkiReagan
- In Uncategorized
- 0
Pending Home Sales increased by 44.3% in May, registering the highest month-over-month gain in the index since the National Association of Realtors (NAR) started tracking this metric in January 2001. So, what exactly are pending home sales, and why is this rebound so important?
According to NAR, the Pending Home Sales Index (PHS) is:
“A leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.”
In real estate, pending home sales is a key indicator in determining the strength of the housing market. As mentioned before, it measures how many existing homes went into contract in a specific month. When a buyer goes through the steps to purchase a home, the final one is the closing. On average, that happens about two months after the contract is signed, depending on how fast or slow the process takes in each state.
Why is this rebound important?
With the COVID-19 pandemic and a shutdown of the economy, we saw a steep two-month decline in the number of houses that went into contract. In May, however, that number increased dramatically (See graph below):
This jump means buyers are back in the market and purchasing homes right now. Lawrence Yun, Chief Economist at NAR mentioned:
“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
But in order to continue with this trend, we need more houses for sale on the market. Yun continues to say:
“More listings are continuously appearing as the economy reopens, helping with inventory choices…Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
As we move through the year, we’ll see an increase in the number of houses being built. This will help combat a small portion of the inventory deficit. The lack of overall inventory, however, is still a challenge, and it is creating an opportunity for homeowners who are ready to sell. As the graph below shows, during the last 12 months, the supply of homes for sale has been decreasing year-over-year and is not keeping up with the demand from homebuyers.
Bottom Line
If you decided not to sell this spring due to the health crisis, maybe it’s time to jump back into the market while buyers are actively looking for homes. Let’s connect today to determine your best move forward.
5 Tips for Busy Parents Prepping a Home for Sale
- At March 10, 2020
- By NikkiReagan
- In Home Sellers
- 0
Selling a house can be stressful for any of us, but when you’re a parent, getting the house ready for showings can be a big headache. Luckily, there are steps you can take to save money and time (and hopefully your sanity) when you’re preparing your home for sale.
Make a Plan
The first step to decluttering is to imagine what you want the space to look like; after all, it can be hard to find a place to start if you don’t know where you want to end up. Think about what spaces you want to open up and where you can make a visible difference. The act of decluttering is really about getting your possessions out of the way spatially for prospective buyers; it lets them imagine their own items and their lives in the house.
Make It a Game
When parents worry about selling their house, the clutter and mess of children can add stress. Instead, consider the extra sets of hands at your disposal! There are tons of ways to get your kids involved and make it fun. Additionally, promising a reward for you and for the family can give you some time to unwind from all the planning. Some parents have found it motivating to pay kids to get rid of old toys, while others use it as a time to teach about donations and giving back to the community. Either way, involving them throughout the process (as much as you can) will help keep the whole family working toward a common goal.
Have the Right Tools for the Job
While you’re decluttering and emptying out your home, don’t forget to leave items that will be useful when showing the house. One of the most important items is a reliable vacuum cleaner to tidy up quickly before people arrive, making your home look sparkling and new with only a few minutes warning. Reducing your family’s footprint to a single bathroom can also be useful, cutting down on the number of spaces that you need to clean before every showing. Consider areas that get messy quickly or often; if you can put a towel or sheet down over a dirty bathroom counter, for example, the towel can be quickly pitched in the hamper when you’re having guests. Pick out these problem spots and find ways to cut corners and keep your spaces sparkling.
Sometimes, it helps to invest in a new vacuum to ensure that it does an effective job of keeping your house clean. Although this can be a very big investment, especially if you need to adhere to a very strict budget, shopping websites such as Rakuten can help you save money and earn cash back on vacuum cleaners, as well as other items that can keep your home tidy.
Go in Prepared
Most homes don’t sell after just one showing, so prepare a checklist for each time someone is looking at the house. There are plenty of free pre-made lists available to save you even more time. Items on the checklist should help improve your chances of selling the house, like removing pets from the space, opening curtains and blinds, securing valuables, and minimizing odors. These simple tasks don’t cost any money, and they help improve the look of your home.
Get a Secondary Location
No matter how diligent you are about cleaning your house, everyday life will still catch up with you sooner or later. Since you don’t typically get much warning when showing your home, consider investing in an affordable storage unit for the large items you want to hide away, like old furniture or boxes from the storage closet. If you’re not sure if you need anything that large, consider getting some plastic bins (Home Depot has a great selection that won’t wreck your budget) that you can store under sinks or in a large closet. When you know the realtor is coming, pitch all of the day-to-day hideables in your bins, such as stacks of mail, old blankets, and large toys. Cleaning up those details the day of instead of trying to maintain a spotless home can give you just a little more time to breathe between showings.
Home sales are always stressful, but by making a plan, it can get easier and easier to prep your home for showings. Keep an eye out for those dangerous spots and enlist your family to help you make your home shine; before you know it, it’ll be time to move into your new house!
300 Riverwood Lane, Bullhead City, AZ
- At February 06, 2020
- By NikkiReagan
- In Featured Property
- 0
You own the land! Low property taxes and on sewer with no assessment! Financing available, plus a FREE 1 year home warranty plan! Asking just $89,999. Call 702-493-0781 for your private tour or visit http://mls.ussw.net/listing/963095
Discover our amazing desert lifestyle where you fish, swim, boat or jetski on the Colorado River, enjoy drinks and live music and a little bit of slot play in your favorite Laughlin Casino, or golf on any of several gorgeous golf courses! It’s all happening, year ’round, in Bullhead City!
Call Nikki Reagan, REALTOR® at US Southwest Real Estate at 702-493-0781 or visit www.BullheadCityRealEstate.com today!
2 Bed, 2 Bath Singlewide Mobile Close to the River
- At December 12, 2019
- By NikkiReagan
- In Featured Property
- 0
300 Riverwood Lane is an adorable 2 bedroom, 2 bath manufactured home, close to the Colorado River, shopping, restaurants and many other amenities in Bullhead City, AZ. Perfect as a vacation home or starter home!
It’s been remodeled and is completely turn-key! Asking $95,000 OBO.
- Split Floor Plan
- Dual Master bedrooms
- New laminate and vinyl flooring throughout.
- New energy efficient dual pane windows
- New Interior and Exterior Paint
- Ceiling fans in every room
- Carport
- Master Walk-in Closet
- Dual Sinks in Master
- Indoor Laundry Room
- Fully Fenced.
- Large storage shed with bench and shelves
- Central A/C
- Spacious, private yard.
- Financing available.
Call Nikki at 702-493-0781 or visit http://mls.ussw.net/listing/963095
Laughlin Ranch listed among state’s top golf courses
- At July 30, 2019
- By NikkiReagan
- In Local News
- 0
Laughlin Ranch Golf Club in Bullhead City has been named among the top 15 golf courses in Arizona in a recent publication of Golfweek magazine.
The 18-hole, David Drizisky-designed golf course was listed No. 14 in Arizona in Golfweek’s “2019 Best Courses You Can Play in Each State” list.
“It’s very gratifying to have Laughlin Ranch recognized by the Golfweek raters as one of the top 15 golf courses in Arizona,” said JC Wright, general manager of Laughlin Ranch Golf Club. “Special thanks to our agronomy, golf and food and beverage staffs for their hard work and dedication.”
It’s not the first time that the local course has been recognized by a national publication. Since opening in 2002, Laughlin Ranch has received numerous awards and accolades, including “Best Clubhouse in the United States” by Golf Inc. magazine.
The course, overlooking the Colorado River valley with views of the river, Laughlin’s casino strip and the nearby Black Mountains, features a 7,155-yard, par-72 championship layout with dramatic elevation changes, wide fairways and generous greens.
Among the criteria used by Golfweek’s panel of course raters include:
- Ease and intimacy of routing — The extent to which the sequence of holes follows natural contours and unfolds in an unforced manner.
- Variety and memorability of par 3s, 4s and 5s — Different clubs hit; extent to which the angles of play create interesting and varied playing options; and extent to which holes offer variety of options from the tee and on the second shot.
- Basic quality of conditioning — Variety of playing textures; extent of turf coverage; consistency and quality of bunker sand.
- Walk in the park test — Degree to which the course ultimately is worth spending a half-day on.
Troon Golf, the resort and daily-fee club operations division of Troon, began managing the golf, restaurant, spa and club operations at Laughlin Ranch about a year ago. Laughlin Ranch was one of 12 Troon-managed properties in the top 26 of Golfweek’s “Best Courses You Can Play in Arizona” rankings.
For more information on Laughlin Ranch Golf Club — the course and its amenities — go to www.laughlinranch.com or call 866-684-4653.
Article published July 27, 2019 in the Mohave Daily News
