SJ Real Estate

Managing Finances Before Applying For A Mortgage

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Managing Finances Before Applying For A MortgageAre you planning on using a mortgage to help cover the cost of a new home? If so, you will want to prepare your finances and figure out how you will manage all those wallet-draining monthly expenses. Let’s take a look at how to run a quick financial health check to ensure you are ready to apply for a mortgage.

Update (Or Start) Your Monthly Budget

First, it is essential to get the basics out of the way. If you haven’t already, it’s time to start a monthly budget to keep track of your income and expenses. Once you have a mortgage, it will be important to prioritize your monthly payments so that you don’t end up falling behind.

Starting a budget is easy and can be done with mobile apps, software, a spreadsheet or a pen and paper. List all sources of income so that you know exactly how much cash you are working with. Then, list out every one of your expenses. It can be tough to remember them all, so consider using debit and credit card statements from the past few months as a reminder.

Get A Copy Of Your Credit Report

Next, you will want to get a copy of your credit report so you can see what potential mortgage lenders will see when assessing your financial history. This is a free service that you can request once per year, so be sure to take advantage. Note that you will want to use government-approved websites for requesting your credit report. Be wary of scams.

Do You Have A Down Payment?

A down payment is not required for every home purchase, but having one saved up can make the buying process easier. The amount you will want to have saved up will depend on the cost of your home, whether you plan on carrying private mortgage insurance and a variety of other factors. If possible, try to save up an amount close to (or more than) twenty percent of the home’s purchase price.

Ready? Chat With A Professional

Now that you have your financial health in check, it is time to meet with a mortgage professional to discuss your financing options. 

As soon as you know what you can afford, the next step is to contact your trusted real estate agent who can help you find the house of your dreams!

Are Multi-Unit Properties the Right Move for You?

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Are Multi-Unit Properties the Right Move for YouReal estate isn’t a one-size-fits-all pursuit. Buying and renting multi-unit properties is one of the ways investors build residual income while increasing their property portfolios. However, multi-unit rentals come with some unique challenges. Are you ready to manage a multi-unit rental property?

Ask yourself these questions to help you decide which path best fits your resources, goals, and interests.

Do You Plan To Live On The Property?

Living in one of your rental units offers a myriad of benefits. First, you get to keep a close eye on building conditions and the actions of your renters. Next, you’ll be able to respond quickly to an emergency. Last, you won’t have to pay extra for your own living quarters. You won’t have this option with single-occupancy properties.

Will You Work With A Property Management Company?

If you are more of a hands-off investor, a property management company makes owning properties simple. Their staff will collect the rents, respond to requests for maintenance and repairs, and take care of all the paperwork that comes along with rental units.

All you need to do is collect your portion of the payments and keep up with your bank loans. You can still work with a property management company if you opt for single-family properties. However, it may not be the most cost-effective solution in that situation.

Are Market Conditions In Your Area Changing Quickly?

When rental prices go up, it can be difficult for investors to take advantage. Long-term occupants may balk at the idea of paying more for the same property. With multi-unit buildings, you can raise prices as tenants vacate. In this way, you can keep your current occupants happy without sacrificing potential profits.

Are You Looking For More Ways To Increase Your Income?

Multi-unit properties are a unique opportunity for enterprising investors. Rent out space under stairways or in common areas to vending machine companies. Your residents get convenient snacks and you earn a little extra cash each month. A coin-operated laundry room is another addition that adds value for your residents while increasing your own payouts.

Managing a multi-unit building means more paperwork, maintenance, and marketing. However, the potential profits might be worth it. Take some time to review your own goals and abilities before committing to a purchase.

Be sure to consult with your trusted real estate and mortgage professionals to find out more information about purchasing multi-unit rentals.

When Is The Best Time To Do Your Roof Maintenance?

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When Is The Best Time To Do Your Roof MaintenancePerform roof maintenance on sunny days when there’s less chance of slipping. Blocking off a weekend twice a year gives you plenty of time to complete the items below without rushing or taking unnecessary risks. The beginning of spring and fall present the best opportunities to complete your maintenance before the weather turns too hot or too cold.

Loose Debris Removal

Remove leaves, branches and accumulated debris before winter sets in. Set up a ladder, preferably with another person holding the ladder steady, and clean off as much debris as possible without risking your safety.

General Inspection

Start in the attic or crawl space by looking for ceiling stains. This may indicate water seepage that can compromise your home. Examine the roof in those areas to find loose, lifted or missing shingles that you have to replace. Then, examine the rest of the shingles for mold, worn spots, peeling or cracks. Also, check for missing flashing. 

If you don’t feel comfortable doing the repairs yourself, this is still a valuable exercise. You’ll know what to expect and can avoid charges for unnecessary repairs.

Moss And Mold

You can buy roof moss remover at most home improvement stores. Follow the instructions for best results. After the solution has had time to set, gently brush away the mold and moss, using a soft-bristled broom or wide brush. Try to avoid spray-washing shingles to preserve the UV-blocking granules on their surface.

Facia, Downspouts And Gutters
Protect your hands with heavy rubber gloves and remove debris with a scoop to make the work go quickly. Then, gently scrub dirt and grime from the fascias. Spray each area with a garden hose so that you can check for peeling paint or missing caulk. Re-paint and caulk these areas as needed and note any damage you’d feel more comfortable leaving to a professional. 

Chimneys, Skylights And Vents

Start by closing off your fireplace and cleaning any creosote from the chimney with a hard-bristled brush. Inspect the chimney for missing or cracked bricks. If you do the repairs yourself, remember to treat the chimney afterward with a water-repellent sealant. Inspect and clean vent outlets and skylights using a roof safety harness for steep inclines.

This may seem like a lot of work, but it can save you thousands of dollars by avoiding critical repairs due to negligence.

What’s Ahead For Mortgage Rates This Week – April 1st, 2019

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What’s Ahead For Mortgage Rates This Week – April 1st, 2019Last week’s economic reports included readings from Case-Shiller on home price growth, Commerce Department readings on housing starts and building permits issued. The Conference Board issued its monthly reading on consumer confidence. Pending home sales and weekly reports on mortgage rates and first-time jobless claims were also released.

Case-Shiller Home Price Indices: Price Growth Slows in January

S&P Case-Shiller Indices reported the slowest rate of home price growth in six years. January readings suggested that home price growth slowed due to easing demand. Affordability concerns sidelined buyers; participation of first-time home buyers remained lower than average.

Case-Shiller’s 20-City Home Price Index charted its third month-to-month decline in home price growth; the National Home Price Index fell to 4.30 percent during the three months ending in January as compared to 4.60 percent growth for the three month period ending in October 2018.

Las Vegas, Nevada led the 20-City Home Price Index with year-over-year home price growth of 10.50 percent. Phoenix, Arizona held second place with 7.50 percent home price growth. Third place was tied by Minneapolis, Minnesota, Charlotte, North Caroline and Tampa, Florida with 5.10 percent growth. This tie suggested that home prices were leveling out, and west coast cities were notably absent from the top three spots after home prices rocketed to historic levels in recent years.

Housing Starts, Building Permits Issued

Commerce Department readings for housing starts and building permits issued were lower in February. Housing starts posted on a seasonally-adjusted annual rate of 1.162 million starts. Analysts expected 1.201 million starts based on February’s reading of 1.273 million housing starts. Single-family housing starts fell 17 percent in March.

Regional readings for housing starts were mixed: The Northeast reading was 30 percent lower; the Southern region posted 7 percent fewer starts in February and housing starts in the West fell 19 percent. The Midwest posted a positive year-over-year growth rate of 27 percent for housing starts.

Fewer building permits were issued in February with 1.295 million permits issued as compared to February’s reading of 1.317 million permits issued. While some of the slowdowns in housing starts and building permits were likely related to winter weather, real estate and mortgage lending pros continued to count on home builders to provide more homes to ease housing shortages in many cities and metro areas.

Pending home sales were lower in February; the National Association of Realtors® said pending sales were 1.00 percent lower in February, and those pending sales had declined nearly 5.00 percent year-over-year. Pending sales represent home sales for which purchase offers have been signed, but not completed.

Lawrence Yun, the chief economist for the National Association of Realtors®, said a shortage of available homes in the West coupled with rapidly rising home prices contributed to lower pending sales numbers.

Mortgage Rates, New Jobless Claims Fall

Average mortgage rates fell to their lowest readings in ten years last week. Freddie Mac reported that rates for a 30-year fixed rate mortgage averaged 22 basis points lower at 4.06 percent; the average rate for 15-year fixed rate mortgages fell 14 basis points to 3.57 percent. Rates for 5/1 adjustable rate mortgages averaged 3.75 percent and were 9 basis points lower.

Discount points averaged 0.50 percent for 30-year fixed rate mortgages, 0.40 percent for 15-year fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. Lower mortgage rates are expected to prevail as the Fed announced its decision not to raise the target federal funds rate range in 2019.

Consumer confidence fell to an index reading of 124.1 in February as compared to 131.4 in January. Analysts expected an index reading of 133, which indicates that consumers have less confidence in current economic conditions.

What‘s Ahead

This week’s scheduled economic news includes readings on retail sales, construction spending and labor sector reports on jobs and national unemployment. Weekly reports on mortgage rates and first-time jobless claims will also be released.

States With The Best Opportunities To Acquire Investment Property

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States With The Best Opportunities To Acquire Investment PropertyReal estate investors sometimes get stuck in a rut. They repeat the same type of investment that they did before. This is not necessarily a bad thing because a successful experience is worth repeating. However, it is also a good idea to occasionally take a look at the big picture as well, to see what else is out there for investment consideration.

Real estate markets go up and down. This can be a regional phenomenon. In some states, there are lots of properties that are “underwater.” This means the owners borrowed more on their property than it is currently worth.

In other states, there are properties that generate positive cash flow, while increasing in value. This is very desirable. It means that after paying all the expenses of owning the property, there is cash left over for the owner to receive and profits when selling the home.

Invest In Value

The investment strategy of buying low and then selling high is sage advice. To that, we would add the fine-tuning of buying value. Buying value means making investments that produce the greatest positive cash flows, while the investments appreciate in value.

State-By-State Comparisons

GoBankingRates did an analysis of the United States to see what states currently offer the best real estate deals for investors. They took a look at the three top markets in each state. They calculated the average for the home values and noted the increase in property value from 2017 to 2018.

There are 15 states that offer opportunities worth considering, which are:

Utah 

The three largest markets are Salt Lake, Provo, and Ogden. The average home price is $350,000 with a 12.6% year-over-year increase in value.

Idaho

The largest markets are Boise, Idaho Falls, and Coeur d’Alene. The average home price is $304,000 with a 12.6% year-over-year increase in value.

Montana

The largest markets are Billings, Missoula, and Great Falls. The average home price is $343,000 with an 11.1% year-over-year increase in value.

Maine

The largest markets are Augusta, Bangor, and Portland. The average home price is $231,000 with a 10.7% year-over-year increase in value.

Indiana

The largest markets are Indianapolis, Fort Wayne, and Evansville. The average home price is $179,000 with a 9.3% year-over-year increase in value.

Tennessee

The largest markets are Nashville, Memphis, and Knoxville. The average home price is $251,000 with a 9.1% year-over-year increase in value.

Georgia

The largest markets are Atlanta, Augusta, and Columbus. The average home price is $250,000 with an 8.8% year-over-year increase in value.

Michigan

The largest markets are Detroit, Grand Rapids, and Warren. The average home price is $205,000 with an 8.5% year-over-year increase in value.

Missouri

The largest markets are St. Louis, Springfield, and Kansas City. The average home price is $203,000 with an 8.1% year-over-year increase in value.

Mississippi

The largest markets are Jackson, Hattiesburg, and Gulfport. The average home price is $191,000 with a 7.4% year-over-year increase in value.

Ohio

The largest markets are Cincinnati, Columbus, and Cleveland. The average home price is $207,000 with a 7.2% year-over-year increase in value.

Nebraska

The largest markets are Omaha, Lincoln, and Bellevue. The average home price is $221,000 with a 7.0% year-over-year increase in value.

Alabama

The largest markets are Birmingham, Montgomery, and Huntsville. The average home price is $210,000 with a 7.0% year-over-year increase in value.

Kentucky

The largest markets are Louisville, Lexington, and Bowling Green. The average home price is $226,000 with a 6.0% year-over-year increase in value.

Arkansas

The largest markets are Little Rock, Fort Smith, and Fayetteville. The average home price is $195,000 with a 5.7% year-over-year increase in value.

Summary

There are interesting opportunities uncovered by this analysis. Utah and Idaho are very attractive for investing right now. Real estate investors considering any of these states can also compare population growth rates, unemployment rates, cost-of-living, and other livability factors when making an investment decision.

If you’re interested in looking at properties in another state, contact your trusted local real estate professional. They are the best resource to help you identify great properties and agents to work with across the country.

Case-Shiller Home Price Growth Slower in January

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Case-Shiller Home Price Growth Slower in JanuaryHome price indices issued by S&P Case-Shiller showed further slowing in home price growth in January. The national home price index showed 4.30 percent home price growth for the three months ended in January. Analysts expected home prices to grow 4.20 percent for the same period in cities surveyed by Case-Shiller. More cities reported declines in home prices than those that posted gains in home prices.

The top cities posting year-over-year home price gains in the 20-City Home Price Index were Las Vegas, Nevada with 10.50 percent growth; Phoenix, Arizona posted a year-over-year home price gain of 7.50 percent. Three cities tied for third place with Charlotte, North Carolina, Minneapolis, Minnesota and Tampa, Florida posting year-over-year home price growth rates of 5.10 percent.

Home Price Growth Stalls Throughout U.S.

Noteworthy in January’s readings were the West Coast’s loss of dominance in home price growth rates and the retreat of double-digit yearly growth rates for home prices. Las Vegas, Nevada posted the only double-digit price gain year-over-year, but it suffered steep declines in home values during the recession. The 20-City HPI for January showed month-to-month home price growth slowed in 14 cities, was unchanged in one city and five cities posted gains in home price growth rates.

David M. Blitzer, managing director and chair of the S&P Case-Shiller Index Committee, said that the home prices had not grown so slowly since April 2015. Rapidly rising home prices sidelined many buyers who could not afford to keep up with home prices that rose faster than inflation and wages. Analysts said that housing markets were leaning in favor of home buyers as home price growth slowed. Mr. Blitzer said that it “remains to be seen if recent low mortgage rates and smaller price gains can sustain improved home sales.”

Federal Reserve policymakers recently announced that the Fed would hold steady on its target federal funds rate range of 2.25 to 2.50 percent; this fueled a drop in mortgage rates. Analysts said that rates could continue to fall. Slower home price growth and lower mortgage rates are expected to encourage would-be home buyers back into the market.

If you are considering purchasing a new property, be sure to contact your trusted real estate professional to discuss the market conditions in your area.