A lot of homeowners that are thinking about moving have an option with their home: rent it out or sell it? What to do hinges on various factors, including one's financial situation and local market conditions. Let's explore the key aspects to consider, including the financial implications of both options. Deciding Between Selling and Renting Out Your Home: A home is often the largest financial asset for many people, making the decision of what to do with it a significant one. Selling your home offers a substantial cash windfall, while renting it provides a steady monthly income. Renting also allows you to continue building equity if property values rise. Consider your personal circumstances to determine the best choice. When Selling is the Best Option: Need Cash for Next Home Purchase: If buying a new home depends on the cash from selling your current one, selling is your best option. This approach allows you to apply the proceeds towards a new down payment. Not Interested in Landlord Responsibilities: Managing a rental property requires time and effort. If you're not prepared for the responsibilities of being a landlord, such as maintenance and tenant management, selling might be preferable. Potential for Significant Profit: With property values increasing nationwide, selling your home could result in substantial profit. Analyze your local real estate market to gauge potential gains. Eligibility for Capital Gains Tax Exemptions: If your home was your primary residence for at least two of the past five years, you may qualify for significant capital gains tax exemptions, making selling financially advantageous. When Renting Out is a Better Choice: Temporary Relocation: If you're moving temporarily and plan to return, renting out your home can be more cost-effective than selling and later buying another property. Desire for Rental Income: Extra income from renting can be appealing, but remember, if you're buying another home, lenders will consider your rental income when assessing your mortgage eligibility. High Rental Demand: If your home is in a sought-after location, renting can be a smart move. Evaluate the rental market in your area to ensure finding tenants is feasible. Expectation of Property Value Increase: If you anticipate an increase in your home's value in the near future, renting now and selling later could maximize your profits. Cost Considerations in Renting vs. Selling: Costs of Renting Out: These include mortgage payments, maintenance, finding tenants, potential vacancies, property management fees, HOA fees, and landlord insurance. Costs of Selling: Preparing your home for sale, real estate commissions, closing fees, home staging, and paying off your mortgage are some of the expenses involved in selling. Economic Downturn Considerations: With potential recessions, assess your job stability and financial resilience. If you're unsure about managing two mortgages or dealing with reduced rental income, selling might be the safer option. Bottom Line: Choosing between renting and selling your home requires a thorough evaluation of your financial status, lifestyle, and the local housing market. Weigh the costs of both options, consider your future plans, and your willingness to take on landlord responsibilities before making a decision. Of course schedule a free consult on our website and we can let you know how your specific situation looks when we crunch the numbers.

This year has seen challenges for home buyers, with higher rates and lower inventory. However as the year closes, current trends suggest a shift that could be beneficial for homebuyers. This change is primarily due to falling mortgage rates and an increase in the number of properties for sale. Decrease in Mortgage Rates: Freddie Mac reports that the rate for a 30-year fixed mortgage has fallen to an average of 7.03%. This is a considerable drop from its 23-year peak of just over 8% recorded in early October. Such a reduction in mortgage rates can greatly influence the affordability and appeal of buying a home. Surge in Mortgage Applications: In response to lower mortgage rates, Redfin has observed a 15% increase in mortgage applications since early November, which previously reached a 28-year low. This rise in applications reflects a growing interest in purchasing homes, spurred by more favorable lending conditions. More Homes on the Market: Additionally, there's been a 7% increase in new home listings compared to last year, when interest rates were on the rise. This increase in available properties provides more choices for buyers and may help reduce the intense competition for homes. Gradual Recovery of the Housing Market: Despite these positive signs, the recovery of the housing market is progressing slowly. Freddie Mac warns that the increase in applications is beginning to slow down, indicating that while the market is improving, a full recovery is not immediate. Impact of Federal Reserve's Rate Increases: The recent decline in mortgage rates is partly linked to expectations that the Federal Reserve may pause its interest rate hikes. From March 2022 to July 2023, the Fed significantly raised its benchmark rate, affecting the cost of mortgages. This has been a major factor in the sluggish movement of the housing market. Homeowners’ Hesitance to Sell: Elevated rates also meant that homeowners with mortgages at rates between 3% and 4% were less likely to sell, leading to fewer homes on the market. This shortage played a role in driving up home prices, adding another hurdle for new buyers. The current changes in the housing market, characterized by lower mortgage rates and an increase in home listings, offer positive news for homebuyers. However, the market's recovery is ongoing, and its future trajectory remains uncertain. Homebuyers should stay informed and alert to navigate these shifting market conditions.

The Federal Housing Administration (FHA) has recently made a significant announcement that will impact many homebuyers and homeowners across the United States. As we step into the calendar year 2024, the FHA has updated its loan limits for both Single Family Title II forward and Home Equity Conversion Mortgage (HECM) insurance programs. This change, driven by the persistent rise in home prices throughout 2023, brings new opportunities and considerations for borrowers. Reflecting on the Housing Market Trends Julia Gordon, the Assistant Secretary for Housing and Federal Housing Commissioner, highlighted the changes as a response to the continuous upsurge in home prices witnessed nationwide in 2023. With affordability becoming a growing concern, these increased loan limits aim to make FHA’s low-down-payment financing more accessible, ensuring that well-qualified borrowers can still enter the market. Understanding the New Loan Limits The FHA adheres to a formula prescribed in the National Housing Act for setting annual loan limits. This involves analyzing county or Metropolitan Statistical Area (MSA) home sale data to adjust loan limits across different cost categories. For 2024, the loan limits are as follows: One-Unit Properties: The low-cost area “floor” is set at $498,257, with the high-cost area “ceiling” at $1,149,825. For Alaska, Hawaii, Guam, and the U.S. Virgin Islands, the ceiling is $1,724,725. Two-Unit Properties: Limits range from $637,950 in low-cost areas to $1,472,250 in high-cost areas, and up to $2,208,375 in the special exception areas. Three-Unit Properties: These start at $771,125 and go up to $1,779,525 and $2,669,275 in high-cost and special exception areas, respectively. Four-Unit Properties: The limits are set at $958,350 for low-cost areas, $2,211,600 for high-cost areas, and $3,317,400 for the special exception areas. These adjustments, particularly for the special exception areas, account for the higher costs of construction in regions like Alaska, Hawaii, Guam, and the U.S. Virgin Islands. The changes will be effective for FHA case numbers assigned on or after January 1, 2024. HECM Loan Limits on the Rise The HECM maximum claim amount is also seeing an increase. From $1,089,300 in 2023, it will rise to $1,149,825 in 2024, applicable to all areas including the special exception regions. The Calculation Process The process of setting these limits is detailed and follows specific guidelines. The FHA sets Single Family forward mortgage loan limits at 115 percent of area median house prices, subject to established floor and ceiling limits. These are based on the national conforming loan limit set by the Federal Housing Finance Agency (FHFA) for conventional mortgages. For 2024, the national conforming loan limit for a one-unit property is $766,550. The FHA’s minimum national loan limit floor for a one-unit property is 65 percent of this, equating to $498,257. High-cost areas are those where the loan limit exceeds this floor, and the maximum loan limit ceiling for such areas is $1,149,825. Accessing Detailed Information For those seeking more information or a complete list of FHA loan limits, including areas at the FHA ceiling and between the floor and ceiling, the FHA’s Loan Limits Page offers comprehensive details. As we navigate through these changes, it’s essential for borrowers, real estate professionals, and lenders to stay informed and understand how these new limits might influence their decisions and opportunities in the housing market. The FHA’s adjustments for 2024 are a clear response to the dynamic housing market and aim to support sustainable homeownership in a diverse range of economic environments. If you want to see what you can qualify for in the coming year please fill our our quick mortgage analysis on our website!

Starting the journey to buy your first home is an exciting venture, filled with hopes and dreams. For many first-time buyers, the financial aspect of purchasing a home, particularly the initial down payment and closing costs, can be a significant hurdle. This is where first-time home buyer grants come into the picture, providing essential support. These grants, often funded by government agencies or non-profit organizations, are designed to make the dream of homeownership more achievable for those new to the property market. A Deep Dive into National Grant Programs Several national programs offer substantial assistance to first-time home buyers. The U.S. Department of Housing and Urban Development (HUD) provides valuable resources, including grants for down payment assistance and closing costs. The HUD's Good Neighbor Next Door program is particularly notable, offering a 50% discount on the list price of homes in revitalization areas to public servants like teachers, firefighters, and law enforcement officers. Another significant program is the HomePath Ready Buyer program from Fannie Mae, which provides up to 3% in closing cost assistance to first-time home buyers who complete an educational course. Additionally, the USDA offers programs for those looking to buy in rural areas, providing loans with no down payment requirements. Eligibility and Application Insights Eligibility for these grants usually hinges on factors like income level, credit score, and first-time homebuyer status, often defined as someone who hasn't owned a home in the previous three years. Some programs focus on particular groups, such as veterans or low-to-moderate income families. It's essential for applicants to thoroughly understand the requirements of each grant they consider. Education is also a key component, with many programs requiring participants to complete homebuyer education courses to qualify, thereby ensuring they are well-informed about the responsibilities of homeownership. Your Gateway to a New Home If you are dreaming of owning your first home, these grants can significantly reduce the financial challenges. They provide more than just monetary assistance; they also bring confidence to first-time buyers, supporting them through their journey into homeownership. Prospective buyers should consult with local housing authorities, real estate professionals, or financial advisors to identify the best grant opportunities. The path to homeownership, facilitated by these grants, becomes less intimidating and more achievable, turning aspirations of owning a home into a tangible reality. If you are looking to prequalify or learn how much you can qualify for and what specific programs and grants you can apply for schedule a call on our website and we can help you review your options.

In the ever-changing landscape of real estate finance, understanding the latest mortgage rate trends is crucial for both prospective and current homeowners. The rates for 30-year fixed, 15-year fixed, 5/1 Adjustable Rate Mortgages (ARMs), and jumbo loans have all moved lower, marking a change from previous weeks. After climbing above 8 percent, mortgage rates have now dipped back into the 7 percent range. This shift is partly attributed to cooling inflation, hinting at potential changes in the Federal Reserve's approach. The Federal Reserve's Stance The Federal Reserve's decision to raise its key interest rate in July significantly impacted borrowing costs across various financial products, including mortgages. Despite the recent cooling of inflation, the central bank maintained its stance on another rate hike this month, signaling that higher rates may be the new normal for some time. The Impact on Homebuying This fluctuation in mortgage rates coincides with rising home prices, a combination that has significantly affected homebuying activity. Data from Black Knight indicates that over half of the home purchase mortgages originated in July had a monthly payment exceeding $2,000, with 23 percent surpassing $3,000. This affordability squeeze is particularly challenging for first-time homebuyers, many of whom are finding themselves priced out of the market. As we navigate these turbulent times in the mortgage market, staying informed and seeking expert advice is more important than ever. Please schedule an appointment on our website and we can give you a personalized quote.

Today, we're dedicating our post to the brave men and women who have served our country. As a veteran, you have access to unique mortgage options tailored to your service and sacrifice. This guide aims to navigate the various loan choices available to you, helping you find the path to homeownership that best suits your needs. VA Loans - A Prime Option for Veterans VA loans stand out as one of the most beneficial mortgage options for veterans. Administered by the Department of Veterans Affairs, these loans offer several advantages: No down payment: Most veterans can purchase a home with no down payment. No private mortgage insurance (PMI): This can significantly lower your monthly payments. Competitive interest rates: VA loans typically have lower rates compared to conventional loans. Flexible credit requirements: These loans are often more accessible to those with less-than-perfect credit scores. To be eligible, you need to have served a minimum period in the military, National Guard, or Reserves, with specifics depending on when and how long you served. To get started, obtain a Certificate of Eligibility (COE) from the VA, then approach a VA-approved lender for the application process. Other Mortgage Options for Veterans While VA loans are a fantastic option, they're not the only path to homeownership: Conventional Loans: If you have a strong credit score and can afford a down payment, a conventional loan might offer more flexibility in terms of property types and loan structures. FHA Loans: Backed by the Federal Housing Administration, these loans are great for veterans with lower credit scores or limited savings for a down payment. USDA Loans: Ideal for veterans looking to settle in rural areas, offering low-interest rates and no down payment options. Factors to Consider When Choosing a Loan Selecting the right mortgage isn't just about eligibility; it's about what fits your financial situation and future plans. Here are key factors to consider: Financial Health: Assess your credit score, income, savings, and debt-to-income ratio. Future Plans: Are you looking for a forever home, or is this a stepping stone? Your duration of stay can influence the type of loan you choose. Professional Advice: Consult with a financial advisor or mortgage professional to understand the nuances of each option. Additional Resources and Assistance for Veterans Beyond these loan options, numerous programs offer counseling and assistance to veteran homebuyers. Look into state-specific benefits and educational resources provided by the VA to make an informed decision. Ready to take the next step towards homeownership? Complete our 60 second prequal on our website orschedule an appointment to speak with one of our mortgage experts today.

The housing market is making affordability a big issue for many would be buyers. This can make buying a fixer-upper a lot more tempting. We’ve all seen the home make-over shows with amazing before and afters, but should you do it? Here are a few things to consider: 1. Know Your Limits How much of the work can you do. How much time do you have to put into renovations. Are you prepared to live in a work zone for a while 2. Work Out Costs In Advance Have a contractor walk through the inspection with you and get a written estimate for work he would do. If you are doing the work yourself price the costs of supplies, either way add 15% to the costs because surprises are likely. 3. Check Permitting Costs and Procedures C heck with local officials to see if the work requires a permit and the permit costs. 4. Be Extra Careful with Structural Issues If the house requires structural repairs then double check the work and pricing. Hire a structural engineer to do an inspection and if structural work needs to be done make sure your bid discounts this work 5. Include Inspection Contingencies Make sure you hire professional inspectors and check for hidden issues like mold, piping issues, pest damage etc. And if things come up ask for discounts. And if too many red flags come up or the seller won’t properly discount the costs for repair then you may want walk away and keep looking!

Today we are going to discuss two common mortgage loan products, and the pros and cons of both FHA and Conventional Loans. Many people are familiar with the 20% down, good credit 30 year fixed conventional loan scenario. FHA loans on the other hand are designed for people who might have difficulty qualifying for a conventional loan to still get funding to buy a house. FHA Loans offer down payments as low as 3.5% and are more lenient on credit scores and past financial issues. Borrowers can qualify for FHA loans with as low as 580 credit scores. One of the downsides of FHA loans are mortgage insurance requirements, if you put down less than 10% you will be required to pay monthly insurance for the duration of the loan, as well paying Upfront Mortgage Insurance Premium. The best choice for you? Give us a call or apply online and we will analysis what programs suits your needs 😊

Throughout the country (and in some areas more than others) low inventory in the housing market and high rent prices have many home owners adding or considering adding ADUs (which stands for Accessory Dwelling Units). ADUs often called granny flats, are guest houses or rooms added to garages to create rental income for home owners. Home owners typically add ADUs to increase cash flow, as well as looking for their property value to appreciate. Whether ADUs are right for you, depends on a number of factors. ADUs often costs at least $100,000 to build so being in a high rent market helps to offset the initial investment. You’ll also need to make sure local ordinances allow them and what the regulations are. The old real estate adage about location stays true for ADUs as well. If you are in an area where rents are high or a popular vacation destination, then ADUs can make sense. Again you’ll need to check the local zoning and if you build one you will also need to have updated insurance to cover the ADU. Check with us to learn more and to see what financing terms you qualify for.

A lot of young Americans went to college, studied hard but in addition to getting a diploma, they also graduated with debt. Having loans is not a deal breaker but it will factor into the important debt-to-income (or DTI) ratio, and mortgage underwriters are primarily looking at the numbers so having it be student loan debt isn't different from a car loan in the math. Strategies to get approved with student loan debt Pay it down - this maybe easier said than done but if you have extra money or got a raise then try to pay down the debt Consolidate it - if you can consolidate your debt and lower your monthly payment (even not the overall loan amount) this will help your monthly DTI ratio Co-sign - this can be a delicate process but its one to consider if you have a trustworthy, reliable family member or friend Programs and Assistance Sometimes a conventional mortgage might not be possible but there are options! FHA, VA, and USDA loans offer a lot more flexibility and lower down payments than traditional mortgages Grants and Programs - there are a number of grants and programs out there from the federal to local level that you may qualify for If you're interested in qualifying for a loan but worried about your student debt give us a call or apply online and we can see what best fits your needs!