Monday, January 21, 2019

Make it a Day ON, Not a Day Off!



Make it a Day ON, Not a Day Off! There are many ways you can participate in the annual Martin Luther King, Jr. Day of Service. You can join a project already planned in your community; you can develop your own project with family, friends, and neighbors; or if you work for an organization that mobilizes volunteers, you can make King Day the day you train new volunteers to be deployed throughout the year.


Legislation signed in 1983 marked the birthday of the Rev. Dr. Martin Luther King, Jr. as a federal holiday. In 1994, Congress designated the Martin Luther King Jr. Federal Holiday as a national day of service and charged the Corporation for National and Community Service (CNCS), the federal agency that leads service and volunteering, with leading this effort. Each year, on the third Monday in January, the MLK Day of Service is observed as a “day on, not a day off.” MLK Day of Service is intended to empower individuals, strengthen communities, bridge barriers, create solutions to social problems, and move us closer to Dr. King’s vision of a “Beloved Community.”


Dr. King once said, “Life’s most persistent and urgent question is, ‘What are you doing for others?'” The AmeriCorps and Senior Corps national service programs provide opportunities to serve your community and your country in deep and meaningful ways. You can serve somewhere locally or far from home; fight poverty, build homes for those in need, mentor kids, or support disaster victims, just to name a few. But no matter where or how you choose to serve, you’ll be assured of an unforgetable experience for you and the ones you help.


Is your schedule already booked on MLK Day? That’s okay! Thousands of organizations around the country are looking for help year round. Search today for volunteer opportunities and get connected to an organization near you.   Find out more at: https://www.nationalservice.gov/serve-your-community/mlk-day-service


 



Friday, January 18, 2019

7 Safest, Most Affordable Cities in America



Port St. Lucie Ranks #3 in the 7 safest, most affordable cities in America.


Though you’re bound by the Code of Ethics not to prognosticate about the safety of any particular location, it’s an issue at the forefront of your buyers’ minds. “When homeowners think about the biggest investment of their life, top of mind is how safe an area would be to live in and raise a family,” Rick Palacios Jr., director of research at John Burns Real Estate Consulting, told realtor.com®.


You can, instead, send your clients to information resources and crime data to help them arrive at an informed purchase decision. Realtor.com® has helped to cull such information, analyzing the 150 largest metro areas to and which cities have the lowest crime rates. All the areas on realtor.com®’s list also are affordable, with home prices below the $300,000 national median. But one thing is for sure: Buyers can expect to pay more in locations with lower rates of violent crime, according to a study from Auburn University.


Violent crime, such as homicides, assaults, and robberies, have plunged 49 percent nationwide from 1993 to 2017, according to FBI data. Some of the safest areas on realtor.com®’s list weren’t always known for being low-crime but have rebounded in the past few years. “The places that made our affordable safe harbor ranking are a mix of smaller metros that never really struggled with high crime and cities once riddled with problems that have successfully pulled off a turnaround,” realtor.com® notes. “No Western metros were included because home prices are simply too high.”  Realtor.com® ranked the following seven cities as the safest, most affordable areas in the country.


1. Grand Rapids, Mich.


  • Median home list price: $280,000

  •  Total crime rate: 18.38%

2. Pittsburgh


  • Median home list price: $173,000

  • Total crime rate: 18.44%

3. Port St. Lucie, Fla.


  • Median home list price: $285,100

  • Total crime rate: 19.16%

4. El Paso, Texas


  • Median home list price: $175,800

  • Total crime rate: 20.48%

5. Syracuse, N.Y.


  • Median home list price: $160,000

  • Total crime rate: 21.4%

6. Hartford, Conn.


  • Median home list price: $260,000

  • Total crime rate: 21.97%

7. Fayetteville, Ark.


  • Median home list price: $272,600

  • Total crime rate: 23.21%

Source: “America’s Safest Affordable Cities … That Won’t Put You to Sleep,” realtor.com® (Jan. 14, 2019)



Thursday, January 17, 2019

Mortgage Relief May Give Housing a Winter Boost





Mortgage rates have fallen to their lowest averages in eight months, and as word gets out, more potential home buyers may come off the sidelines, real estate pros say.



 



“The problem is that volatility is the obstacle,” Sam Khater, Freddie Mac’s chief economist, told The Wall Street Journal about expectations of fluctuations in mortgage rates over the next few months.



 



The 30-year fixed-rate mortgage fell to a 4.51 percent average last week, which matches the lowest average since last spring, according to Freddie Mac’s weekly mortgage market survey. Mortgage rates are still higher than a year ago—when they were 3.95 percent—but rates have steadily fallen from nearly 5 percent this fall.



 



Higher mortgage rates in 2018 were blamed on dampening home sales and prompting affordability concerns among would-be buyers. Stock market swings and higher home prices also took the blame.



 



But as mortgage rates fall, some real estate professionals say they’re seeing buyers step back into the housing market to take advantage of the savings. Tami Pardee, founder of Halton Pardee & Partners in Los Angeles, told WSJ that her firm had seven homes go into escrow just one week before Christmas, which is typically one of the slowest times of year. “I think people are worried that rates are going to go really high,” she says.



 



Brian Benjamin, president of Two River Mortgage in Red Bank, N.J., told WSJ that after his buyers, who had been sitting on the sidelines, saw how much they could save with the lower mortgage rates, they actively resumed their search.



 



“Hopefully as the news gets out that mortgage rates have fallen, it will get those on the fence to accelerate their looking,” Benjamin says.



 



It’s the perfect time to call Mortgage Masters and see how much we can save you on your next mortgage loan. For more information call 772.340.4003 👍



Monday, January 14, 2019

Why First-Time Buyers Chose Their Homes





Do you believe in love at first sight?


Many house hunters do: They describe stepping inside a house and instantly feeling like it’s “home.” But was it the price, the amenities, or the location that attracted them? Home improvement website Porch.com surveyed nearly 1,000 consumers about their first home purchase to find some of the top factors that influenced their home buying decisions.









Aesthetic appeal, affordability, commute time, and neighborhood character were the top draws, according to the survey. Sixty-seven percent of baby boomers and 61 percent of Gen Xers say affordability was the most important factor when searching for their first home. Millennial’s also placed a high priority on finding a home within their budget, as well as renovated bathrooms.


Whether the home was move-in ready also was a powerful influencer, respondents say. “We know home renovations can get pricey, and one thing that appeals to potential first-time home buyers is finding a home where the kitchen and bathrooms are fresh and up to date,” according to Porch.com’s study.









Wednesday, January 9, 2019

What You Need to Buy a Home in 2019



Buying a Home in 2019

2019 is the perfect time to buy a home.


You are about to embark on one of the most amazing and rewarding experiences that can ever come from spending money: buying a home. If you are buying a home in 2019, you should know that the entire process is not quick, but when all is said and done, there are few things more exhilarating than buying a house. This guide will help equip you with what you need to buy a house this year.


1. Check Your Credit Score


Before applying for a loan and certainly before ever making an offer on a home, you should know your credit score. Why is your credit score important? Well, it’s not only the difference between getting a low-interest rate on a home loan versus a high one, but it will also directly impact how much a bank or lender will actually loan you. There are several websites you can use to check your credit score, here are a few to consider: TransUnion, EquifaxExperian.


You can check your own score as much as once a day without affecting your credit, also known as a soft inquiry. Hard inquiries are when financial institutions check your credit score, typically when you’re applying for a loan or credit card. Hard inquiries lower your credit score a few points, so try to keep hard inquiries to a minimum.


2. Improve Your Credit Score


Maybe you just checked your credit score and realized it’s not as high as you had expected. Don’t worry, there are a few things you can do now that will help raise your credit score so you can capitalize on a great interest rate.


Though you can easily implement steps to help your credit score, fixing or raising a credit score doesn’t happen overnight. It’s imperative to start now so when you go to apply for a home loan your credit score will (hopefully) be where you want it. Here are three tips to help improve your credit score, and recommended by John Heath, Directing Attorney at Lexington Law:


  • Obtain and Closely Review Your Free Credit Report: In order to improve your credit score, you first need to know what information is on your credit report. The Fair Credit Reporting Act (FCRA) gives you the option to obtain a free credit report from each of the three nationwide consumer reporting companies once every twelve months. Your credit report contains information including your current and past residences, how you pay your bills, bankruptcies, foreclosures and more. Obtaining and understanding the information on your credit report will help you know what you may need to address in order to improve your credit score.

  • Use a Credit Report Repair Company to Dispute Errors: Your credit history is 35 percent of your FICO score, and according to a 2013 study by the Federal Trade Commission (FTC), more than 40 million Americans have something that is incorrect on their credit report. While a late payment or derogatory mark from a creditor may seem harmless, it can have long-standing consequences, in some instances staying on your report for seven years. If you have errors on your credit report, consider working with a credit repair company, who can navigate the complexities of credit repair, contact the credit bureaus on your behalf and help remove any errors as quickly as possible.

  • Spread Credit Card Debt Across Multiple Cards: If any of your credit cards are close to the maximum utilization point, it will be a red flag to lenders, who see this as an indication that you could be having financial issues. If you have multiple cards, spreading the balance out between them could make sense. For example, instead of having one card that is 90 percent maxed out while two other cards have a zero balance, having a 30 percent balance on each card can help your credit score. Reducing overall debt is always the best option, but spreading out your balance can have a positive impact.

“Improving one’s credit score may take time, but it can be done. Bad credit is not irrevocable,” said Heath. “Developing good habits and repairing your credit report will help increase your credit score so you’re able to secure a home loan or a great interest rate with confidence.”


3. Know What You Can Afford


The best way to determine how much house you can afford is to simply use an Affordability calculator. Though calculators such as these do not necessarily account for all of your monthly expenditures, they certainly are a great tool for understanding your larger financial situation.


After you figure out what you can comfortably afford, you can then start online window shopping for houses and really begin to narrow down what you want in a house versus what you can afford. Are you looking at specific neighborhoods? How many bedrooms do you want? Do you need a large yard, big deck, swimming pool, man cave, she shed, etc?


Understanding what you can afford in the area you want to buy will help keep you grounded and focused on what you actually want in a house versus what might be nice to have.


4. Save Up For a Down Payment


Unless you want to pay Private Mortgage Insurance (PMI), you really want to save up for a sizable down payment. PMI is an added insurance charged by mortgage lenders in order to protect themselves in case you default on your loan payments. The biggest problem with PMIs for homeowners is that they usually cost you hundreds of dollars each month. Money that is not going against the principal of your mortgage.


How much should you save for a house? Twenty percent down is typical with most mortgage lenders in order to avoid paying for PMI. However, there are other types of home loans, such as a VA loan if you have served in the military and qualify, that may allow you to put down less than twenty percent while avoiding PMIs altogether.


As an added benefit to having a sizable down payment, you may also receive a lower interest rate that will save you tens of thousands of dollars in interest over time. So start saving now!


5. Build Up Your Savings


Lenders like to see a healthy savings account and other investments or assets (i.e. 401k, CDs, after-tax investments) that you can tap into during hard times. What they really want to see is that you are not living paycheck to paycheck. A healthy savings account and other investments are a good idea in general as it will help you establish your future financial independence, but it is also a necessary item on your checklist of what you need to buy a house in 2019.


6. Have a Healthy Debt-to-Income Ratio (DTI)


Another key component banks and other lenders consider when issuing loans, and at what interest rate, is your debt-to-income ratio. The debt-to-income ratio is a lender’s way of comparing your monthly housing expenses and other debts with how much you earn.


So what is a healthy debt-to-income ratio when applying for a home loan? The short answer is the lower the better, but definitely, no more than 43% or you may not even qualify for a loan at all. There are two DTIs to consider as well.


The Front-End DTI: This DTI typically includes housing-related expenses such as mortgage payments and insurance. You want to shoot for a front-end DTI of 28%.


The Back-End DTI: This DTI includes all other debts you may have, such as credit cards or car loans. You want a back-end DTI of 36% or less. A simple way to improve this DTI is to pay down your debts to creditors.


How do you calculate your DTI ratio? You can use this equation for both front-end and back-end DTIs:


DTI = total debt / gross income


7. Budget for Extra Costs


There are a lot of little costs that go into buying a house that are overlooked by new home buyers all the time. Though there are some things, such as sales tax and home insurance, that can be wrapped into a home loan and monthly mortgage, there are several little things that cannot be included into the home-buying package and need to be paid for out of pocket.


Though these items can range in price depending on the area, size and cost of the house you’re buying, here is a list of extra costs you should consider (not all inclusive):


  • Home Appraisal Fee

  • Home Inspection Fee

  • Geological study

  • Closing costs*

  • Property taxes**

  • Home insurance**

  • Utility hookup/start fees

  • HOA fees

  • Home remodeling/updating

  • Existing propane gas

*Closing costs can sometimes be wrapped into the home loan, depending on the agreement with your lender.


**Property taxes and home insurance can be paid separately or your lender could include it into your monthly mortgage payment.


8. Don’t Close Old Credit Card Accounts Or Apply for New Ones


Closing a credit card account will not raise your credit score. In fact, in some cases, it may actually lower it. Instead, try to pay down the balance as much as you can, while continuing to make your monthly payments on time. If you have an old credit card you never use anymore, just ignore it, or at least don’t close it until after you have purchased your new home.


Opening new credit cards before buying a home is also not a good idea. You don’t want creditors checking your credit or opening new cards under your name, as you may lose some points on your credit score.


The absolute worst thing you can do is max out one of your credit cards, even if the limit on the card is low. If you do, your credit score may plummet. Try tackling your credit cards by paying on the ones with the highest interest rate first, then as one gets paid off, focus on the next card until you’re free and clear.


9. A Solid Employment History


If you haven’t gotten the picture yet, lenders like consistency, including your employment history. Lenders like to see a borrower with the same employer for about two years.


What if you have a job with an irregular or inconsistent pay schedule? People with jobs such as contract positions, who are self-employed, or have irregular work schedules can still qualify for a home loan. A mortgage known as a ‘Bank Statement’ mortgage is becoming rapidly popular with lenders as more self-employed or what has been referred to as the ‘gig economy’ has taken off.


10. Know the Difference Between a Fixed Rate and an Adjustable Rate Mortgage


The difference between these two types of mortgage rates really lies within their names. A fixed rate loan is exactly that, an interest rate that will never change the moment it’s locked in. You will pay the same amount the very first month you pay your home loan and will continue to pay that same exact amount over the course of thirty years (or however long the loan term is).


An adjustable-rate mortgage (ARM) is typically a mortgage that starts out as a lower rate than fixed interest rates but then is adjusted each year typically resulting in a rate higher than a fixed rate. A 5-1 ARM is a popular mortgage offered by lenders, which is a hybrid between fixed and adjustable rate mortgages. Your mortgage would start out at a lower fixed rate for the first five years, then after that time period has elapsed, the rate would then be adjusted on an annual basis for the remainder of the loan term.


11. Follow Interest Rates


It is important to know what interests rates are doing. The big question is are they on the rise or are they falling?


When the economy is good the Federal Reserve typically raises the interest rate in an effort to slow down economic growth in order to control inflation and rising costs. When the economy is in the dumps the Fed does the exact opposite. They lower the interest rate in order to entice more people to make larger purchases that require loans (i.e. land, cars, and houses) to help stimulate the economy.


As new soon-to-be homeowners, it’s a good idea to know how the overall economy is doing, and more importantly, how it’s impacting the interest rates you’ll soon be applying for. In 2018, after years of bottom of the barrel interest rates, the Fed raised interest rates three times and is projecting to raise it three more times in 2019.


Why are small hikes in interest rates so important to you? To put it into perspective, even a one percent increase in your interest rate on a home loan is the difference of paying or saving tens of thousands of dollars in interest payments on your home loan over time.


12. Know How Much Time it Takes to Buy a House


The home buying process from start to finish is time-consuming and very relative to individual circumstances and the housing market in your area. However, there are some general universal constants that you can expect, such as a cash offer on a house is usually much quicker than a traditional loan, and if there is a perfect house in a good neighborhood and at a great price, you better expect competition and added time for a seller to review offers.


Depending on the housing market in your area and possibly which season you’re buying in, it can take you a couple of weeks to find a home or more than a year. But after you find your home you can typically expect the entire process from making an offer on a house to walking in its front door, to be as little as a few weeks to a couple of months on average.


13. Find a Knowledgeable Real Estate Agent


There are several ways to find a knowledgeable real estate agent. Many people rely on recommendations from friends and family, while others look to online reviews. While both of these scenarios work really well and can land you a great real estate agent, the reason these agents rise above the others as the best of the best or the crème de la crème is because of their intentions.


A good real estate agent isn’t trying to get you into a house as quickly as possible so they can earn a commission. Instead, you want an agent that will act as your guide through the home buying process, while having your best interests in mind. A good agent will be able to tell you straight if they think a house is a good fit for you, or if you should keep looking. They should also be expert negotiators so that you get the best deal possible.


14. Find a Mortgage Lender


There are a few things to keep in mind when researching a mortgage lender. The first thing that comes to most people’s’ minds is what mortgage rate can they get. You may have to shop around to find the best rate because lower the rate the more money you save.


Secondly, how does that mortgage lender rate compared to other lenders? By looking at positive and negative online reviews you can usually establish a theme pretty quickly of the strengths and weaknesses of the lender, and what you can possibly expect for a level of service down the road.


Ask the lender what their average length of time is to close on a house after the offer has been accepted?  A good lender versus a bad one can be the difference of moving into your new home two to four weeks earlier. You want to find out how streamlined their processes are.


15. Get Pre-approved


When being approved by a mortgage lender, you should be aware that there is a small but relevant difference between the typical fast preapproval for a home loan versus an underwritten pre-approval.


The fast pre-approval usually encompasses a credit report and a loan officer review and can be done in less than a couple of hours. This basic pre-approval allows you to quickly know how much you can afford and then make an offer on a house that may have just come on the market.


The underwritten pre-approval usually takes about twenty-four hours and includes a credit report, loan officer review, underwriter review, and a compliance/fraud review. Though this process takes longer, your offer on a house is actually stronger. Eventually, if you’re planning on buying a house, you will have to go through the underwritten pre-approval process anyway, so it’s better to jump on it from the start.


16. Research Neighborhoods or Areas You Want to Live


There are many variables to think about when researching your future residents. The key to beginning your research is to determine those variables most important to you. Are you looking for a good school district, a large house, convenience to commuter options, or a specific neighborhood that is extremely friendly and ranks high on Walk Score?


Your real estate agent will most likely tell you to figure out your list of the things you absolutely want in a house versus the extra features that you would like to have, but wouldn’t deter you from a house if it wasn’t there.


Your list will help your agent narrow down the number of houses they’ll show you, saving you time by only showing you houses you’d actually be interested in.


17. Shop For Your Home and Make an Offer


Now that you know where you want to live and you’re pre-approved, the fun begins. You get to look at houses! Once you find the house you know would be a great fit for you and your family, you’ll want to make an offer.


There are numerous variables to consider and hopefully, your knowledgeable real estate agent will help you through this process. Understanding the market conditions, how houses have been selling in the neighborhood and at what price (above or below asking), and knowing if there are other competing offers will help you assess and determine how you’d like to make an offer.


Negotiating an offer on a house can be emotionally taxing, so do your research and rely on your agent’s advice so you come to the table prepared.


18. Get a Home Inspection


Congratulations are in order! The sellers have accepted your offer. Now you want to get the home inspected to make sure there are no underlying issues that could cost you money down the road, such as a bad roof or foundation. Usually, a home inspection is a contingency built into the initial offer, and your real estate agent can help you set this up. However, it is recommended to hire an inspector that is certified by a national organization (such as ASHI or Inter-NACHI). Though you can waive this contingency if you’re trying to make your offer more competitive in a hot market. Just be aware that if you do waive a home inspection contingency, you may be taking on considerable risk.


There are several types of home inspections, but in general, a typical home inspection involves a certified inspector that will go in, around, under, and top of your house looking for anything that could be of concern, such as structural or mechanical issues. The inspector would also look for safety issues related to the property. Though they will go into crawl spaces and attics as part of their inspection, they will not open walls. They will inspect the plumbing and electrical systems and should point out any defect in the property that could cost money down the road for the homeowner.


Then they will put their findings into a nice written report for you with pictures, which then basically becomes a miniature instruction manual for your house. No house is perfect, but the report will give you a great snapshot of the property at the time of the inspection. If there are fixes that need to be addressed, this report will certainly let you know.


You should also know that the sellers are not required to make any repairs to the property. However, you can request them through your real estate agent, which will let you know what repairs are reasonable or not.


19. Have the Home Appraised


Home appraisals are an important part of the process because oftentimes house prices can quickly skyrocket when the housing market is hot, and banks do not like to loan out more money than what a home is worth. A home appraiser will not only tell you what the home is actually worth for the area and for the current housing market, but this appraisal will also directly affect the size of loan the bank will give you.


If the home appraisal comes back and states that the house is worth $300,000, but you made an offer of $310,000, the bank will most likely only lend you $300k. You will then either be stuck with paying the additional $10k out of pocket, or you may try to renegotiate the price with the sellers to see if they would be willing to come down. Or you may lose the house altogether.


Also, the mortgage lender will usually set up the home appraisal so you can take this time to focus on other home-buying tasks that need to be finished up.


20. Close the Sale and Sign The Papers


Congratulations, you’re a homeowner! Your real estate agent should help you map out the last details, such as when and where you should sign all the papers to take ownership of the house and, of course, the handing over of the keys. Welcome to your new home.



Written by on December 4, 2018



Monday, January 7, 2019

2018 Tax Changes – What You Need to Know!





Talk to Your Tax Advisor – It is always a great idea to talk with your tax professional before the end of the year to formulate a year end strategy. There may be some advice that they can give you to help you plan for the filing of your returns next year.



 



Mortgage Interest Deductions –



•Mortgage Debt incurred December 16, 2017 or later: You may deduct the interest paid on your mortgage up to a loan of $750,000. Any amount over that is not deductible.



•Mortgage Debt incurred prior to December 16, 2017: You may deduct the interest paid on your mortgage up to a loan of $1,000,000 which was the previous amount.



•Home-Equity Debt: Loan interest on Home Equity loans is suspended, unless you use the money to improve the home substantially and the total debt does not exceed its cost. Be sure to talk with your tax advisor prior to counting on a deduction for home improvement purposes.



 



Property Taxes – Previously, you could write off all your property real estate taxes. The new law limits that deduction to $10,000 which will affect those of you in high property tax areas. This deduction is either: Your property tax plus state and local income tax—Or, your property tax plus sales tax.



 



Child Tax Credits – If you have children under the age of 17 your tax credit has doubled from $1000 to $2000 per qualifying child.



 



Standard Income Deductions – Standard deductions doubled from $12,000 to $24,000 for married couples filing jointly. For some people this eliminated “itemized deductions” unless those itemized deductions exceed $24,000. Examples of itemized deductions are property taxes, mortgage interest and charitable deductions to name just a few.



 



Charitable Donations – Charitable Deductions remain in place, however, the limit for cash contributions increased to 60% of your adjusted gross income versus the previous 50%. Remember, that charitable deductions are considered “itemized” deductions.



 



Medical and Dental – Medical and Dental deductions are also “itemized deductions”. They are deductible if they exceed 7.5% of your adjusted gross income. However, in 2019, unless Congress acts, this will change to 10% of your adjusted gross income.



 



Personal Exemptions – Due to the higher standard deduction and higher child tax credit, personal exemptions are eliminated.



 



Miscellaneous Itemized Deductions – Miscellaneous deductions such as tax preparation, unreimbursed job expenses or investment expenses have been eliminated.



 



Tax planning is important to everyone and can influence your financial planning decisions. We are not tax professionals and you should not construe this information as tax advice. Always consult the advice of a licensed tax professional.