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Millionaire to Millennials: Don't Rent a Home... Buy!

by House to Home Properties LLC

 

Millionaire to Millennials: Don’t Rent a Home… Buy! | Keeping Current Matters

In a CNBC article, self-made millionaire David Bach explained that: The biggest mistake millennials are making is not buying their first home.” He goes on to say that, “If you want to build real financial security, real wealth for your lifetime, then you need to buy a home.

Bach went on to explain:

“Homeowners are worth 40 times more than renters. Now, that first home doesn’t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but that’s how you get started.”

Then he explains the secret in order to buy that home!

Don’t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).”

What will it cost to pay your mortgage in fifteen years? He explains further: “For fifteen years, you got to brownbag your lunch. Think about that! Brownbag your lunch literally for fifteen years. You can retire ten years sooner than your friends. You’ll have real wealth, because you bought a home – you’re not a renter. And you’ll be financially secure for life.”

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

Provided by Keeping Current Matters

 

Benefits of Homeownership

by Keeping Current Matters

The Benefits Of Homeownership Go Beyond The Financial

Homeownership is a major part of the American Dream. As evidence of that, 91% of Americans believe that owning a home is either essential (43%) or important (48%) to achieving that “dream.” In a market where some people may be unsure about the benefits and possibilities of buying a home, it is important that we remember this.

Homeownership is NOT just about the money. In fact, some of the major benefits are non-financial. Here are a few of those benefits as per the National Association of Realtors:

  • Consistent findings show that homeownership does make a significant positive impact on educational achievement.
  • Several researchers have found that homeowners tend to be more involved in their communities than renters.
  • Early studies of homeownership and health outcomes found that homeowners and children of homeowners are generally happier and healthier than non-owners, even after controlling for factors such as income and education levels that are also associated with positive health outcomes and positively correlated with homeownership.

Bottom Line

Homeownership means something more to people and their families than just the financial considerations.

Information from Keeping Current Matters

Cost of Not Owning Your Home

by Keeping Current Matters

The Cost of NOT Owning Your Home

The Cost of NOT Owning Your Home | Keeping Current Matters

Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

Zillow recently reported that:

“In reality, buying or renting a home is an intensely personal decision, with emotional and even financial considerations that go beyond whether to invest in this one (admittedly large) asset. Looking strictly at housing market numbers, there is a concrete point at which buying a home makes more financial sense than renting it.”

What proof exists that owning is financially better than renting?

1. We recently highlighted the top 5 financial benefits of homeownership:

  • Homeownership is a form of forced savings.
  • Homeownership provides tax savings.
  • Homeownership allows you to lock in your monthly housing cost.
  • Buying a home is cheaper than renting.
  • No other investment lets you live inside of it.

2. Studies have shown that a homeowner’s net worth is 44x greater than that of a renter.

3. Just a few months ago, we explained that a family that purchased an average-priced home at the beginning of 2017 could build more than $48,000 in family wealth over the next five years.

4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent paymentalong with a profit margin!!

Bottom Line

Owning a home has always been, and will always be, better from a financial standpoint than renting.


 Information provided from Keeping Current Matters

Low Inventory Causes Home Prices to Maintain Fast Growth

by Keeping Current Matters

Low Inventory Causes Home Prices To Maintain Fast Growth

The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price Report last week. The report revealed that severely lacking inventory across the country drained sales growth and kept home prices rising at a steady clip in nearly all metro areas. Home prices rose 5.3% over the last quarter across all metros.

Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report:

“Unfortunately, the pace of new listings were unable to replace what was quickly sold. Home shoppers had little to choose from, and many had to outbid others in order to close on a home. The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.”

What this means to sellers?

Rising prices are a homeowner’s best friend. As reported by the Washington Post in a recent article post:

“The rise in median sales prices has made current homeowners much more willing to sell their home, and that willingness is one of the main drivers behind the inventory that does make it on to the market. While it hasn’t been enough to meet demand, it has made the situation much better, compared with even three or four years ago.”

What this means to buyers?

In a market where prices are rising, buyers should take into account the cost of waiting. Obviously, they will pay more for the same house later this year or next year. However, as Construction Dive reported, the amount of cash needed to purchase that home will also increase.

“These factors have created a situation where the market keeps moving the goalposts in terms of the down payment necessary for first-time homebuyers to get into a home.”

Bottom Line 

If you’re thinking of selling and moving down, waiting might make sense. If you are a first-time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.

 

 

Applying For A Mortgage?

by House to Home Properties LLC

Don’t Let Fear Stop You From Applying For A Mortgage

 

A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainty about the buying process. A specific cause for concern tends to be mortgage qualification.

For many, the mortgage process can be scary, but it doesn’t have to be!

In order to qualify in today’s market, you’ll need to have saved for a down payment (73% of all buyers made a down payment of less than 20%, with many buyers putting down 3% or less), a stable income and good credit history.

Throughout the entire home buying process, you will interact with many different professionals, all of whom perform necessary roles. These professionals are also valuable resources for you.

Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests you follow:

  1. Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO® Score of all closed loans in September was 724, according to Ellie Mae.
  2. Start gathering all your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
  3. Contact a professional – your real estate agent will be able to recommend a loan officer that can help you develop a spending plan, as well as determine how much home you can afford.
  4. Consult with your lender – he or she will review your income, expenses, and financial goals to determine the type and amount of mortgage you qualify for.
  5. Talk to your lender about pre-approval – a pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change), and demonstrates to home sellers that you are serious about buying!

Bottom Line

Do your research, reach out to professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner.

From Keeping Current Matters

Open House June 10th!!

by House to Home Properties LLC

Open House at W10202 County Rd F June 10th, 2017

CFPB Announces Two-Month Pushback of TRID Rule

by House to Home Properties LLC

RISMEDIA, Friday, June 19, 2015— The Consumer Financial Protection Bureau (CFPB) announced this week a proposal to push back the effective date of the TILA-RESPA Integrated Disclosure rule, which combines two mortgage disclosure regimes into one. The new date is set for October 1. The rule, originally set to go into effect August 1, has been making headlines for months, with feedback coming in from every end of the real estate spectrum that the start date was too soon.

The CFPB credits the two-month delay to an “administrative error.”

“We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks,” says CFPB Director Richard Cordray.

“We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time,” added Cordray.

“Clearly, the Bureau listened to the concerns that industry has for consumers,” comments Michelle Korsmo, chief executive officer of the American Land Title Association. “Consumers would be helped even more if the CFPB also announced a specific hold-harmless period for industry to understand how the forms will work in real life transactions. Under TRID, some mortgage lenders and settlement service providers may initiate additional risk-management tactics that could slow the closing process for homebuyers.”

Frank Keating, ABA president and CEO, concurs. “This extension will help protect consumers from disruptions during a traditionally busy period for home purchases,” says Keating. “It will also help to assure new loan origination systems and compliance software under development by lenders and the vendors on whom they rely will be adequately installed and debugged, and staff training completed, before the effective date.”

“The action announced today by the CFPB is a welcome step. NAR has long advocated the need to avoid implementing the new regulation during the peak summer selling season,” said National Association of REATLORS® President Chris Polychron. “REATLORS® appreciate that the CFPB has demonstrated an understanding of the need for additional time to accommodate the interests of the many consumers and providers.”

Copyright© 2015 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission.

 

We're on Facebook!

by House to Home Properties LLC

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www.facebook.com/housetohomeproperties

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Vacation Home As a Tax Deduction?

by House to Home Properties LLC

Vacation home. Mortgage interest on your second home is deductible, just as it is for your principal residence. Property taxes can be deducted on any number of homes. If you rent the place for 14 or fewer days during the year, the rental income is tax-free to you. If you rent it for more than 14 days a year, you must report the income, but also may claim deductions for rental expenses.

From Kiplinger.com

Read more: http://www.kiplinger.com/features/archives/2007/01/hometaxopedia.html#ixzz1LsosE2rC
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Mortgage rates ease for first time in a month

by House to Home Properties LLC
 

Mortgage rates ease for first time in a month

Borrowers rush to beat FHA premium increases

By Inman News
Inman News™

Mortgage rates eased this week for the first time in a month, as

signs of inflation remained subdued, Freddie Mac said in releasing

the results of its weekly Primary Mortgage Market Survey.

Rates on 30-year fixed-rate mortgages averaged 4.8 percent with an

average 0.7 point for the week ending April 21, down from 4.91

percent last week and 5.07 percent a year ago.

 

This year, rates on 30-year fixed-rate loans have ranged from

4.71 percent in early January to a high of 5.05 percent in February.

The 30-year fixed-rate mortgage hit an all-time low in Freddie Mac

records dating to 1971 of 4.17 percent during the week ending

Nov. 11.

"Low inflation is keeping mortgage rates at bay," said Freddie

Mac Chief Economist Frank Nothaft in a statement. "The core

consumer price index rose just 0.1 percent in March, below the

market consensus forecast. The 12-month growth rate in core prices

was 1.2 percent, which is also rather low by historical standards."

Freddie Mac's survey showed rates on 15-year fixed-rate mortgages

averaging 4.02 percent with an average 0.7 point, down from

4.13 percent last week and 4.39 percent a year ago. The 15-year

fixed-rate mortgage hit a low in records dating back to 1991 of

3.57 percent in November.

 

Rates on 5-year Treasury-indexed hybrid adjustable-rate

mortgage (ARM) loans averaged 3.61 percent with an average

0.6 point, down from 3.78 percent last week and 4.03 percent a

year ago. The 5-year ARM hit a low in records dating to 2005

of 3.25 percent in November.

 

Rates on 1-year Treasury-indexed ARMs averaged 3.16 percent

with an average 0.6 point, down from 3.25 percent last week and

4.22 percent a year ago.

 

Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans was up a seasonally adjusted

10 percent during the week ending April 15 compared to the week

before.

 

The increase in purchase loan applications to the highest level

since Dec. 3 was largely due to a 17.6 percent increase in

applications for government-backed loans, the MBA said.

Borrowers were likely motivated by a scheduled increase in

FHA insurance premiums, the group said.

 

Despite the surge in demand, purchase loan applications

remained 11.4 percent below the level seen at the same time

a year ago, the MBA said.

 

Requests for refinancings were up 2.7 percent from the week

before, but accounted for 58.5 percent of mortgage applications,

the lowest share since May, 2010.

 

MBA economists expect rates on 30-year fixed-rate loans will

average 5.1 percent during April, May and June, and climb to an

average of 5.6 percent during the final three months of the year.

 

In an April 14 forecast, MBA economists predicted that rates on

30-year fixed-rate loans will rise more gradually next year, to

an average of 6 percent in the final three months of 2012.

Copyright 2011 Inman News

 

About Inman News™
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innovative and timely information about the industry. Known for its award-

winning journalism, cutting-edge technology coverage and forward-thinking

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news, education and insight.

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