lake county real estate. and then some…

selling homes…a family tradition


Leave a comment

Renting to avoid a mortgage payment?

Some people rent in order to avoid the commitment of a mortgage payment. A renter is still paying a mortgage – it just happens to be for someone else.

 

Rent vs. Buy: Either Way You're Paying A Mortgage | Keeping Current Matters

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage – either your mortgage or your landlord’s.

As The Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

The graph below shows the widening gap in net worth between a homeowner and a renter:

Increasing Gap in Family Wealth | Keeping Current Matters

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting with home values and interest rates projected to climb.


Leave a comment

Existing home sales are up almost 4%…

Existing Home Sales Up 3.9% [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • The annual adjusted sales are currently at a 5.36 million pace.
  • 14,684 homes sell every day in the United States.
  • October marked the 44th consecutive month of price gains.


Leave a comment

In the mood to kick off the holiday season?

There are plenty of Villages sponsoring tree lighting ceremonies this weekend. I am heading to the one in Libertyville tonight. Here is a link with a list of local festivities…


Leave a comment

Distressed sales dropping…

The National Association of Realtors began tracking distressed sales in October of 2008. When the housing market hit its lowest point in 2012, distressed sales accounted for 35% of all homes sold. This October, distressed sales amounted to only 6% of all homes sold. That is an improvement from 9% in October of 2014, and the lowest ever, since NAR started keeping tabs on distressed sales. Now that is something to be thankful for!
Distressed Property Sales Hit New Low | Keeping Current Matters

The National Association of Realtors (NAR) just released their Existing Home Sales Report revealing that distressed property sales accounted for 6% of sales in October. This is down from 9% in 2014 and the lowest figure since NAR began tracking distressed sales in October 2008.

Below is a graph that shows just how far the market has come since January 2012 when distressed sales accounted for 35% of all sales.

Percentage of Distressed Property Sales | Keeping Current Matters

Existing Home Sales Up Year-Over-Year

Mortgage interest rates remained below 4% in October prompting existing home sales to stay at a healthy annual pace of 5.36 million. Year-over-year sales were up 3.9%.

Inventory of homes for sale remain below the 6-month supply that is necessary for a normal market, as they fell 2.3% to a 4.8-months supply. The shortage in inventory has contributed to the median home price rising an additional 5.8% to $219,600.

NAR’s Chief Economist, Lawrence Yun had this to say about the lack of inventory:

“New and existing-home supply has struggled to improve so far this Fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets.”

There is good news though, as Yun went on to say:

“As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago.”

Bottom Line

If you are debating putting your home on the market this year, now may be the time. Buyers are still out there looking for their dream home. Meet with a local real estate professional who can help you determine your best plan.


Leave a comment

Interest rates may be inching up, however the FICO score requirement is dropping…

 

Millennials: What FICO Score is Needed to Buy a Home? | Keeping Current Matters

In a recent article by the Wharton School of Business at the University of Pennsylvania, it was revealed that some Millennials are not looking to purchase a home simply because they don’t believe they can qualify for a mortgage.

The article quoted Jessica Lautz, the National Association of RealtorsManaging Director of Survey Research, as saying that there is a significant population that does not think they will be approved for a mortgage and doesn’t even try. The article also quoted Fannie Mae CEO Tim Mayopoulos :

“I do think that there’s a sense out there in the marketplace among borrowers that credit may not be available, especially for people with lower credit scores.”

So what credit score is necessary?

A recent survey reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780.

In actually, the FICO score on closed loans (as reported by Ellie Mae) is much lower and has been dropping over the last several months.

FICO Score Requirements | Keeping Current Matters

Bottom Line

Millennials who are considering a home purchase should get advice from a local real estate or mortgage professional now. They may be surprised how much the requirements for a mortgage have eased.


Leave a comment

Not quite sure how equity works? Here’s a quick explanation…

 

Equity Matters A Lot... Just Ask Freddie Mac | Keeping Current Matters

There are many reasons, both financial and non-financial, that homeownership remains an important part of the American Dream. One of the biggest reasons is the fact that it helps build family wealth. Recently, Freddie Mac wrote about the power of home equity. They explained:

“In the simplest terms, equity is the difference between how much your home is worth and how much you owe on your mortgage. You build equity by paying down your mortgage over time and through your home’s appreciation. In a nutshell, your money is working for you and contributing toward your financial future.”

They went on to show an example where a person bought a home for $150,000 with a down payment of 10% ($15K), resulting in a loan amount of $135,000. The buyer secured a 30-year fixed-rate mortgage at 4.5% with a monthly mortgage payment of $684.03 (not including taxes and insurance).

The chart below demonstrates the home equity built after 7 years of making mortgage payments and assuming the historic national average of 3% per year home appreciation:

Home Equity Earned | Keeping Current Matters

And that number continues to build as you continue to own the home.

Merrill Lynch published a report earlier this year that showed the average equity homeowners have acquired by certain ages.

Average Home Equity | Keeping Current Matters

Bottom Line

Home equity is important to building wealth as a family. Referring to the first scenario above, Freddie Mac explained:

“Now, if you continued to rent, and made the same payment of $684.03 per month, you’d have zero equity and no means to build it. Building equity is a critical part of homeownership and can help you create financial stability.”

Put your housing cost to work for you and your family. Meet with a real estate professional today to explore your options.


Leave a comment

Did you know that 24% of recent buyers were this…

 

Singles Are Falling For Their Dream Home [INFOGRAPHIC] | Keeping Current Matters

Some Highlights: 

  • 24% of all recent home buyers were single at the time of purchase
  • 47% of single men cite the desire to own a home of their own as the primary reason to buy
  • 18% of first-time buyers were single women