Real Estate Blog for Buyers and Sellers - Madhu Sarkar - HOMES BY M...

Understanding the Documentation Required to Sell a House

Organising the Legal Documents before you decide to Sell a House Once you have decided to put your house on the market, get yourself prepared. There’s a long list of legal documents required to sell a house. They are critical at different stages in the sales process. To avoid unwanted hiccups for an on-time closing, you should begin to pull together the legal documents required to sell a house the moment you decide to go ahead with the listing. Compiling all the legal documents required to sell a house well in advance means you will have a smooth sailing towards a stress less sale closure. So, let’s explore the key documents you’ll need at various stages of your house-selling expedition: Documents to be arranged before listing: When you’re ready to put your house on the market, consider having these documents ready to go: The sales contract of the house you are selling from the time you purchased the house. The appraisal while you purchased that home. Your homeowners insurance policy and current statement. Your mortgage payoff statement — Ask your lender to send you this document, which includes the amount you will need to pay off your mortgage (if you have one) during closing. Homeowners association documentation — If your home is covered by an HOA, you’ll need to keep the Declaration of Covenants, Conditions and Restrictions, also known as CC&Rs handy. These explain the rights and obligations of the homeowners and your HOA. Invoices pertaining to significant repairs and maintenance — Your buyer will want to know, for example, the last servicing dates for a roof overhaul or a central air service Invoices for major changes you have made — These might include additions or extensive remodelling. All current warranties for appliances and major works. Property tax records Recent utility bills (Best if you can provide for a year. You may not need them but might come handy for some purpose to the buyers.) Keeping a track of all of these before you plunge to sell will make things smoother. If you are missing some, ask for the copies from the company or organization that issued them. Homeowners association legal documents required to sell a house Legal website NOLO has a list of HOA documents you’ll need to sell your home. These include: Your HOA’s Covenants, Conditions, and Restrictions (CC&Rs) along with its bylaws, rules, and regulations Unusual restrictions on homeowners. Does your HOA have rules about renting out your home, rooms or basement? Or does it restrict parking rights, pet ownership or anything else out? The latest HOA financial statements — Is the association struggling to stay afloat (in which case it may soon need to collect more from homeowners) or is it in rude financial health? How much you currently pay monthly for general fees and maintenance “Special assessments” in the pipeline. Does the HOA plan to levy extraordinary charges beyond its monthly fees for large projects or emergency repairs? Certificates from the HOA that any additions or improvements you’ve made to the home have had its approval, where necessary The HOA’s master insurance policy Again, if you never had or can’t find any of these documents, ask your HOA for copies. Documents you need to work with your Agent before listing your property in the market. In addition to above listed documents from your files, you’ll also acquire some new ones during the listing process. These include the following: Your listing agreement. If you consider to sign up with a real estate agent or broker, you’ll get a copy of the listing agreement. This outlines the terms of your partnership with the agent. Residential Seller’s Property Disclosure Statement (SPDS) — You’ll need to disclose any material facts known to you about the property and the same will be documented. Your agent and broker will typically prepare a marketing plan that will document how and where will your home be marketed: open houses, viewings, listings on various high-traffic websites, etc. The comparative market analysis (CMA) — The agent will provide you a CMA when advising you on the listing price. A CMA displays the prices of comparable homes in your neighborhood or area that are presently listed or in escrow, along with others that have recently been sold. Your Seller’s Net Sheet — This itemizes all your selling expenses (including redeeming your mortgage, taxes, escrow fees and the agent’s commission) so that you can see how much are you actually getting by selling the house. Ask for an updated net sheet if the price you settle on differs from the one you originally listed at. Your net outflow or inflow will differ with these small changes. A preliminary title report — They’re a shortcut to confirm your ownership of the home. The buyer will commission a full title search anyway but including one of these preliminary ones in your seller’s disclosure pack makes things look better. Offer and counteroffer forms — Real estate agents create these documents when submitting an offer. And your agent can respond with a counteroffer form if you are not satisfied with the offers received. Final Purchase and Sale Agreement — When you accept an offer, the terms of the deal are laid out in a contract. You may be asked to accept “contingencies.” Those allow the buyer to withdraw in certain specified circumstances Contingency removal form — As contingencies are satisfied or fall away, these can be removed from the final purchase and sale agreement using these forms Other considerations and documents after the offer have been accepted. Assuming your buyer(s) need a mortgage, they’ll have to pay for an appraisal before their mortgage gets sanctioned. This shows the appraiser’s assessment of the property’s market value. Smart buyers often commission home inspections to reassure themselves about the home’s condition. You could ask for copies of the appraisal and inspection report, although it’s ultimately at the discretion of the buyers whether they provide them. Shortly before closing, you should receive an estimated closing statement. This lays out all the financial aspects of the transaction and estimates how much you stand to receive at closing. Checklist required while you are attending the closing: Concluding the sale will typically take place at the offices of the escrow agent, title agent, or attorney. And most sellers generally don’t need to bring much to closing. On the day of the closing, here are the items you will need to bring to closing: Take a government-issued photo ID along. You’ll need it along with a secondary form of identification such as your insurance card Carry all the keys to the property. Any outstanding paperwork sought by the escrow agent, title agent, or attorney Any repairs that has been carried out as part of the transaction, bring all the associated paperwork, including receipts. Your buyer(s) should have done a walk-through of the home the day before to satisfy that everything’s in order. But you don’t want any last-minute hitches Documents to receive from the Sale: On closing or soon after, you’re likely to receive copies of: The deed — This is the document that legally transfers ownership of the home to the new buyer. The affidavit of title or seller’s affidavit — You sign this to confirm that you are the legal owner and have the right to transfer ownership. Transfer tax declarations — This applies if you live where the state or local government levies a tax on real property transfers. It confirms the price received and states the tax payable Final closing statement — This is unlikely to differ much from the estimated closing statement you recently received Bill of sale — The deed transferred ownership of the home itself. This does the same for anything you agreed to leave in the home. That may include appliances, light fittings, furniture, etc. There may be some more or fewer depending on your transaction details and the ruling state law. Tips: And if you think arranging all these is a mammoth task, a reliable real estate agent can be your co-pilot, ensuring you navigate each stage successfully. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Will Rates Go Down in September 2023?

September Mortgage Rates…. Up, Low, Moderate? What do our Experts have to say??? Jessica Lautz, deputy chief economist at National Association of Realtors Forecast: will lower mortgage interest rates in the fall and winter “In the coming months, with inflation easing, one hopes the Fed will stop rate increases to the federal funds rate, which will lower mortgage interest rates in the fall and winter. In the short term, this is bad news for consumers looking to enter the late summer housing market. Affordability challenges will continue for buyers if new inventory is not brought to the market and rates do not abate. The increased mortgage rate is exacerbating housing affordability as home prices are climbing in this limited inventory environment. Something has to give for rates to come down, and that something is the next decision by the Fed.” Jiayi Xu, economist at Realtor.com Forecast: The Fed is very unlikely to cut the rate anytime soon. “Mortgage rates will likely maintain their current level of approximately 7%. A sticky inflation rate combined with a declining unemployment rate implies that the Fed is very unlikely to cut the rate anytime soon. Meanwhile, it is worth noting that the Fed is proceeding with caution to make sure the lagged effects of previous rate hikes are fully revealed. As the CPI shelter index, the largest contributor to the inflation growth has passed its peak and has been on a downward trajectory since April, we may expect a faster inflation slowdown in the coming months. Therefore, it will not be surprising to see the Fed take another “wait-and-see” approach during the upcoming FOMC meeting, which may help alleviate the recent rise in mortgage rates.” Jess Kennedy, co-founder and COO at Beeline Forecast: We expect rates to stay steady if not slightly decline in September. “There is a lot in the news about the almost unexpected strength of the overall US economy. On the back of this, we have seen rates push higher. As these newest reports become reality, we expect rates to stay steady if not slightly decline in September. This is assuming the Fed decides not to increase rates at their next meeting, which appears to be the current sentiment.” Ralph DiBugnara, president at Home Qualified Forecast: “I see interest rates overall staying steady at their current levels through September” “The Fed finally seems to be signaling that we have reached a level, with interest rate raises, that they feel is having the impact they intended the raises to have. Inflation, in most sectors, has started to decrease or stabilize. According to the Consumer Price Index (CPI), the only sector that was truly up over the last few months is real estate. This is mostly because of a large inventory shortage nationwide. With all of these factors, I see interest rates overall staying steady at their current levels through September. The 30-year fixed rate will settle at around 7% average for the month of September and the 15-year fixed rate will land at 6.375%.” Odeta Kushi, deputy chief economist at First American Prediction: Rates will fall “Fed policy, inflation, and the health of the labor market determine the outlook for inflation in September. According to the CME FedWatch tool, the odds that the Federal Reserve will pause rate hikes are nearly 90%. If inflation deceleration and labor market cooling continue and the Fed decides to pause rate hikes, there may be some downward pressure on mortgage rates. The Fed is also expected to release its dot plot projections during the September FOMC meeting. If inflation expectations are higher than expected or the Fed has to take more drastic actions than markets anticipate to tame inflation, mortgage rates may move up.” Rick Sharga, president and CEO at CJ Patrick Company Forecast: Mortgage rates will stay between 7.0% and 7.25% through the first half of September “Mortgage rates, after ranging between 6.5% and 7.0% for the past three months, have risen a bit more than expected in August, due in part to yields on the 10-year U.S. Treasury reaching their highest point this year. The bond market — and the mortgage market — seem to be reacting to a relatively hawkish posture by the Federal Reserve, suggesting that the Fed Funds rate may tick up higher and then stay at that elevated level for longer than many analysts expected. Given these higher yields on the 10-year bonds and the uncertainty surrounding the Fed’s direction, it seems likely that mortgage rates will stay between 7.0% and 7.25% through the first half of September, and then adjust up or down after the Fed meets on the 19th and indicates what its plans are.” Mortgage interest rates forecast next 90 days The average 30-year fixed-rate mortgage more than doubled within the course of the year because of the rampant inflation we saw in 2022. In order to bring down the inflation the Fed took action and that led to big interest growth. With inflation gradually cooling, the size of the Fed’s rate hikes is coming down. There are high indications that mortgage interest rates will move within a tighter range compared to the spikes we saw in early 2022. Of course, interest rates are notoriously volatile and could tick back up on any given week. Mortgage rate predictions for 2023 The 30-year fixed-rate mortgage averaged 7.18% as of Aug. 31, according to Freddie Mac. All five major housing authorities we looked at projected 2023’s third-quarter average to finish below that. National Association of Realtors predicts the lowest average 30-year fixed interest rate to settle at 6.5% for Q3. Meanwhile, Wells Fargo and Fannie Mae have the highest forecasts of 6.8%. (c) TheMortgageReports.com Source: Projection materials published by stated housing agencies. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
August Rates

Will mortgage rates go down in August? Expert mortgage rate predictions for August Jessica Lautz, deputy chief economist at the National Association of Realtors Forecast: hopeful signs rates will start to fall "The Fed should react positively to the recent ease in inflation. If so, this will have a ripple effect on the mortgage market. Even as the 30-year fixed recently hit an eight-month high and is brushing 7%, there are hopeful signs rates will start to fall for home buyers in the coming months." Danielle Hale, chief economist at Realtor.com Forecast: Rates likely to drift lower. "With mortgage rates at the upper end of their 2023 range headed into August, they are likely to drift lower in the month ahead. The June CPI data issued in mid-July showed striking improvement in inflation trends. While this is unlikely to deter the Fed from hiking its short-term rate at the end of July, progress on inflation could help the Fed sound more confident that its hoped-for economic soft-landing is in reach." Ralph DiBugnara, president at Home Qualified Forecast: Fixed mortgage rates increase "I believe we will see the 30- and 15-year fixed mortgage rates increase based on the perception that the Fed will be raising rates at least two more times in 2023. Settling at 6.99% on 30-year and 6.25% on 15-year. Rates seem to be trending up over the last few weeks based mostly on the Fed holding off rate rise but promising more raises. With the anticipation of the raise, I don't see any huge move until the Fed speaks and clarifies where they currently see the United States trending for the remainder of the year. Rick Sharga, president and CEO at CJ Patrick Company Prediction: Rates likely to stay within the same 6.5-7.0% "Mortgage rates in August are likely to stay within the same 6.5-7.0% range that they've been in for the past couple of months, maybe edging toward the lower end of that range assuming that the Federal Reserve doesn't do anything unexpected at its July meeting.This month's better-than-expected inflation numbers coupled with a job market that appears to be softening a little bit provide hope that the Fed will stop raising rates soon, allowing mortgage rates to fall slowly but steadily for the remainder of the year." Current mortgage interest rate trends The average 30-year fixed-rate mortgage (FRM) rose from 6.9% on Aug. 3 to 6.96% on Aug. 10, according to Freddie Mac. Interest rates grew for the third consecutive week. "There is no doubt continued high rates will prolong affordability challenges longer than expected, particularly with home prices on the rise again. However, upward pressure on rates is the product of a resilient economy with low unemployment and strong wage growth, which historically has kept purchase demand solid," said Sam Khater, chief economist at Freddie Mac. Mortgage rates went up or down at the beginning of 2023. In the first half, the average 30-year fixed rate went as low as 6.09% on Feb. 2 and climbed up to 6.79% on June 1, according to Freddie Mac. Mortgage rates increased for the second week in a row. The 30-year fixed rate rose from 6.9% on Aug. 3 to 6.96% on Aug. 10. The average 15-year fixed mortgage rate also grew, going from 6.25% to 6.34%. Source: Freddie Mac Mortgage rates soared to a 14-year high in 2022, after hitting record-low rates in 2020 and 2021. Many experts and industry authorities believe interest rates will follow a downward trajectory in 2023. McBride says this about the future of mortgage rates: "With the backdrop of easing inflation pressures, we should see more consistent declines in mortgage rates as the year progresses, particularly if the economy and labor market slow noticeably." Dating back to April 1971, the fixed 30-year interest rate averaged around 7.8%, according to Freddie Mac. Whatever happens, interest rates are still below historical averages. So if you haven't locked a rate yet, you can still get a good deal especially if you're a borrower with strong credit. You need to know the right agent to help you sail through this. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Homebuyers Are Still More Active Than Usual

Homebuyers continue to stay active The housing market is experiencing a slower pace, it is no more a frenzy like the unicorn years, however, that doesn’t mean today’s market is at a cessation. In actuality, buyer traffic is still strong today. Maybe it’s not running but it surely is brisk walking. The ShowingTime mentions that “Showing traffic declined about 10% in May, according to the latest data from the ShowingTime Showing Index®.[1] This follows a typical seasonal pattern – disrupted by the pandemic but now beginning to return – which shows traffic peaks in spring and declines through the rest of the year. Despite the monthly decline, buyer foot traffic remains elevated above pre-pandemic levels associated with a more typical housing market. Buyers continued to outnumber sellers last month, leading to the strongest monthly price growth since last June – even as sales activity remained muted. The index overall was 46% and 66% higher in May than in the same period in 2018 and 2019, respectively, and up 5.2% from May of last year.” The ShowingTime Showing Index is a measure of how much buyers are touring homes. The graph below uses that index to illustrate buyer activity trends over time to help put today into the proper perspective. It is evident from the graph that there’s seasonality in real estate. If you look at the pre-pandemic years in the market (shown in gray), there is a consistent pattern as buyer activity peaked in the first half of each year (during the peak homebuying season in the spring) and slowed as each year came to a close. With the onset of the pandemic in March 2020, that trend was disrupted by the uncertainty in the market (shown in blue in the middle). It is expected to behave in an unprecedented manner. The slowdown that it experienced showed the path to ‘unicorn’ years of housing (shown in pink). This is when mortgage rates were record-low and buyer demand was sky-high. We still can understand that the seasonal trends still existed even during that time, just at much higher levels. Now, we have entered 2023. Traffic is down from the previous unicorn years because of inflation, recession, and other collateral factors. But what’s happening isn’t a steep drop off in demand – it’s a slow return toward more normal seasonality. We also need to notice that the graph shows higher traffic than in the pre-pandemic years. Here’s a graph using just the May data for the last five years. It shows just how strong buyer demand still is. What does it mean for you as a Buyer/ Seller? Even if you are waiting for a market correction, other buyers are already touring homes. For sellers, you are losing or delaying the opportunity of listing your house in the market at the right time. The buyer activity level is higher than they were in May 2022 (when the news of higher mortgage rates started to set in) and certainly more than they were in the last normal years. Thus, there is no dearth of buying activities and it is only constrained by the limited supply of homes for sale. According to U.S. News: “Housing markets have cooled slightly, but demand hasn’t disappeared, and in many places remains strong largely due to the shortage of homes on the market.” Bottom Line Don’t let your sight get overcast with all negative news. For sellers, if your house isn’t on the market, it’s not getting in front of all those buyers who are looking to make a purchase right now. For buyers, if you are still not looking for you are losing the opportunity to get one of the best deals. Connect with a real estate agent to start the process. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Will Rates Go Down in July 2023?

Will Rates Go Down in July 2023? Current mortgage rates are averaging 6.96% for a 30-year fixed-rate loan and 6.30% for a 15-year fixed-rate loan, according to Freddie Mac’s latest weekly rate survey. Will this go down? Let’s hear what our experts have to say: Molly Boesel, principal economist at CoreLogic Highlights: Rates will stay near the current rate….. “While the Federal Reserve paused on interest rate increases in June, they left the door open for more increases in the coming months as long as inflation remains above the desired rate. Therefore, we expect mortgage rates to stay near their current rate in July 2023 and trend lower as inflation pressures ease.” Danielle Hale, chief economist at Realtor.com Highlights: The better the inflation readings in the month, the more likely we’ll see mortgage rates drift lower. “July should be an interesting month for mortgage rates. Although inflation has improved markedly — and is likely to continue to show improvement over the next few months — the Fed expects this improvement to be very gradual. As a result, their June projections showed that the typical FOMC member expects to make another two quarter-point rate hikes by the end of the year. Investors are currently pricing in a high probability of one more hike, but only a small chance of a second. This gap between what the market expects and what the Fed will do will close over time. As a result of this, I think there is the possibility for some near-term upticks in mortgage rates, especially if we don’t see the expected improvement in inflation. This means mortgage rates could be near 7% again before beginning to ease. The better the inflation readings in the month, the more likely we’ll see mortgage rates drift lower.” Mark Fleming, chief economist at First American Highlights: This (rate) is the new normal. “Given the Federal Reserve isn’t meeting until the end of July, and markets have already adjusted expectations for another increase at that time, I expect mortgage rates will remain roughly in the 6.5%-7% range where they are today. We are between Fed meetings, so the market has adjusted to the current level of monetary policy. As long as there are no big surprises in the economic data between now and then, this is the new normal.” Ralph DiBugnara, president at Home Qualified Highlights: Rates will stay mostly the same. “I believe we will see fixed mortgage rates stay mostly the same or flat, settling at 6.5% for the 30-year and 5.875% on the 15-year. Rates seem to be trending down over the last few weeks based mostly on the Fed holding off on raising rates any further in June. But with inflation still rising in Europe, we could see a reaction by our federal bank to raise rates again in July with fear of our economy continuing the same trend. With the anticipation of that, I don’t see any huge move until the Fed speaks and clarifies where they currently see the United States trending for the remainder of the year.” Rick Sharga, president and CEO at CJ Patrick Company Highlights: stay in that range (6.5%-7.0% ) for most of July. “Mortgage rates have been stuck in a narrow band between 6.5%-7.0% for the past month or so, and it seems likely they’ll stay in that range for most of July, while the market waits to see if the Federal Reserve resumes hiking the Fed Funds rate after holding steady in its June meeting. If we have good news on the inflation front and the Fed is able to hold off on rate hikes in its July meeting, we may finally see mortgage rates turn the corner and begin slowly declining. But until we see the economic data, it’s all speculation.” Mortgage rate predictions for 2023 by 5 major housing authorities. The 30-year fixed-rate mortgage averaged 6.96% as of July 13, according to Freddie Mac. All five major housing authorities projected 2023’s third-quarter average to finish below 6.96%. National Association of Realtors sits at the low end of the group, predicting the average 30-year fixed interest rate to settle at 6.1% for Q3. Meanwhile, the National Association of Home Builders and Wells Fargo have the highest forecasts of 6.48% and 6.6%, respectively. After hitting the lowest interest rate record in 2020 and 2021, mortgage rates climbed to a 14-year high in 2022. Many experts and industry authorities are of the opinion that rates will follow a downward trajectory in 2023. However, after considering historical data, it can be said that interest rates are still below historical averages. Dating back to April 1971, the fixed 30-year interest rate averaged around 7.8%, according to Freddie Mac. So don’t worry about rates, if buying a house needs your attention you can still get a good deal, historically speaking — especially if you’re a borrower with strong credit. Just make sure you shop around to find the best lender and lowest rate for your unique situation. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Home Equity

Home prices vis a vis Home equity There is a buzz about home equity decline and that must have got you worried. Let’s first understand what is equity? Your home's equity is the difference between how much your home is worth i.e. the current market value and how much you owe on your mortgage. Thus, it is important to understand that equity is tied closely to home values. So, when home prices appreciate, you can expect equity to grow since the difference between the market value and your balance mortgage gets wider and similarly when home prices decline, equity does too since the differential amount shrinks. Here’s how this has played out recently. Home prices accentuated rapidly during the ‘unicorn’ years. That gave homeowners a considerable equity boost as the difference got wider. But those ‘unicorn’ years couldn’t last forever, which is but normal. We saw the market moderation since last fall . Since we experienced home price drop in the later quarters of 2022, equity was impacted. Based on the most recent report from CoreLogic, there was a 0.7% dip in homeowner equity over the last year. However, as it is said don’t judge a book by it’s cover similarly the dip in equity doesn’t show up the actual story. The reality is, while home price depreciation during the later half of last year caused equity to drop, the data shows homeowners still have near record amounts of equity. Let’s understand what is tappable equity to understand how this equity dip has affected. Tappable equity is the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio (LTV). As we know that there was a significant equity boost during the ‘unicorn’ years as home prices rapidly appreciated but we need to check from the table below that even though there is a dip in the home prices compared to the unicorn years but the homeowner equity is still much higher than it was prior to Unicorn Years. Because we are focussing on the dip in equity compared to Unicorn years we are getting worried. The brighter side is recent home price reports show the worst home price declines are behind us, and prices have started to go up again. As Selma Hepp, Chief Economist at CoreLogic, explains: “Home equity trends closely follow home price changes. As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023.” Hence, based on the above report we can say that the home price acceleration has started and will continue to grow at a normal rate. In the same report, Hepp puts it this way: “Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.” That means if you’ve owned your home for a few years now, you are likely still have way more equity than you did before the ‘unicorn’ years. And if you’ve owned your home for a year or less, the forecast for more typical price appreciation over the next year should mean your equity is already on it’s appreciation way. Thus, even if the buzz is all about home price drop, dip in equity but it is still higher than it used to be prior to unicorn years. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
What's your Home Equity?

Are you aware What’s Your Home Equity? Let’s understand how it works…. To calculate your home's equity, divide your current mortgage balance by your home's estimated current market value. For example, if your current balance is $100,000 and your home's market value is $400,000, you have 25 percent equity in the home. If the mortgage balance is greater than the estimated value, then the property is determined to be in a negative equity position. If the estimated value is greater than the mortgage balance, then the property is determined to be in a positive equity position. While property values can go up or down, the national average for home appreciation is 3% per year. Let’s see the current Home Equity Trend: Selma Hepp, Chief Economist for CoreLogic has stated that : “Home equity trends closely follow home price changes. As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023. The average U.S. homeowner now has more than $274,000 in equity — up significantly from $182,000 before the pandemic. Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.” Home Equity Prices look promising: Since home equity is affected by home price change, borrowers with equity positions near (+/- 5%), the negative equity cutoff, are most likely to move out of or into negative equity as prices changes, respectively. However, owing to the disparity between current home inventory for sale and the number of homebuyers in the market over the past few years, home prices appreciated substantially because of higher demands and lesser supplies. Though price appreciation has slowed this year, that doesn’t mean homeowners have lost all the equity in their home. In fact, years of rapid appreciation in most places have been keeping homeowners in good standing . Home equity remains solid despite decelerating home prices. The latest Homeowner Equity Insights report from CoreLogic finds the average homeowner’s equity has grown by $34,300 over the past year alone. And if you’ve been in your home for a longer time, chances are you have even more equity than you realize. Why Is this Important to Know While equity helps increase your overall net worth, it can also help you achieve your dream of buying your next home. You can set off a larger down payment for the next house by selling your current home. Contact Us: So, if you’ve been holding off on selling, it may be time to find out how much equity you have and how it can help fuel your next move. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, connect with a local real estate professional. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Choosing the Right Expert

Whether you’re actively house hunting or just starting to browse homes, the process of buying a home can feel a bit intimidating, considering the number of checkpoints you have to go through and managing too many fronts all alone. It is difficult even when markets are normal however, today’s market is still anything but normal. There continues to be a very low inventory of homes for sale, and still too many buyers in the market. The demand and supply gap has created bidding wars, driving home prices up as buyers compete over the available homes. Navigating these overwhelming tasks can feel daunting at times if you’re trying to do it alone. That’s why having a skilled expert to guide you through the home-buying process is essential, An experienced and skilled agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible. The advice and guidance in these market scenarios can be truly invaluable and extremely helpful. They can guide you to meet your buying objective by staying within your budget. According to the latest Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR) 86% of recent buyers used an agent. Let’s see how they can make a big difference: The way a Doctor is needed to give you medication or do your surgery because they know the human body. Similarly, a Real Estate agent knows your housing market. Experience Real estate professionals know your housing market since they have been working in that market for days/years. They can update you about the ins and outs of what’s happening there, how it impacts the buyers, and how to navigate any hurdles that may pop up—their experience matters. Education Your advisor will understand your requirements and guide you to effectively explain market conditions and set your expectations so you can feel confident in your decision. Knowledge is power when it comes to buying a home. She can help you in dealing with various hurdles, which may pop up while proceeding with the deal. Can help you with queries pertaining to the local amenities, utilities, etc. Support She can suggest the best pricing for a house of your choice. Having an expert on your side not only provides assistance with the purchase agreement. She can also help you by referring to Contractors, Lenders, and all other necessities that might come up. Pricing & Negotiations Your real estate advisor advocates for your best interests since you are her client. Making an offer and negotiating with a seller can be one of the most difficult and stressful parts of the home-buying process. A skilled agent will help you with comparables, and suggest you with the right offer price within your budget. She can also be a help to you while negotiating with the Listing Agent for potential seller concessions for any issues that are found during an inspection. Contracts Real estate professionals will guide you through the disclosures and contracts necessary in today’s heavily regulated environment. Reputation Many of the deals can happen just because of your agent’s networking and her reputation and presentability. Choosing the Right Expert It all starts with trust. All agents would work for your benefit and in turn their profession. Thus, they will provide you with the best possible advice. However, no one can provide perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in today’s market. However, their experience will help a lot in this kind of scenario. Thus, a true professional will give you the best possible advice based on the information and situation At hand. They will guide you through the process with your best interest in mind. Thus, it’s critical to have an expert on your side who is skilled in navigating today’s housing market. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
No Falling Prices

The aggressive moves from the Federal Reserve in order to curb the high inflation, has left many economists warning us that we’re heading towards a recession. Forbes mentions that the U.S. consumer price index (CPI) rose by 6% in February from a year ago and 0.4% from January, according to the Labor Department. These concerns along with steep housing prices and high mortgage rates have left home shoppers weigh whether they should buy now, or wait to see if home prices drop from a potential recession. To help ease your mind, experts are suggesting that even if we do officially enter a recession, it’ll be mild and short. While we may hit a recession however, it won’t be one the crash like in 2008. We have to remember here that a recession doesn’t always lead to a housing crisis. A Recession Doesn’t Mean Falling Home Prices For buyers keen on buying a home, waiting for a big price drop could be a losing game since the housing inflation that pushed buyers out of the market a while back seems to be decelerating. With the understanding that there is no possible way to time the market, buyers are returning in the market which has kept the house prices elevated. The number of homes for sale in January jumped by 65.5% compared to a year ago, with active listings increasing by 13.1%, according to Realtor.com, Nonetheless, inventory remains below pre-pandemic level, which is propping up prices. Historically, when the economy slows down, it doesn’t mean home values will always fall. Home Price change during last six recession: The 2008 recession has etched a deep and fresh scar, that’s why we remember that the most. So we foresee being shrouded with that memory. The main reason why prices fell was because the housing market crash is typically preceded by a housing bubble—a period when homes are valued far more than their worth plus there was a surplus of homes for sale at the same time distressed properties flooded the market and today, the inventory is still extremely tight and has been made even tighter by homeowners staying put at low interest rates—will likely keep upward pressure on prices. The risk for bad lending standards are low due to stricter lending regulations following the 2008 financial crisis. A Recession Means Falling Mortgage Rates On the contrary recessions have always brought good news for buyers since mortgage rates have been decreased. Each time the economy has slowed down the Fed has lowered the interest rates for people to spend more money in order to stimulate the economy. Conclusion: Trying to time the market can mean losing out on your dream home or even your buying capacity. The supply and demand dynamics dictate the outcome of house prices. If rates continue to rise and home prices don’t drop enough to compensate for high loan costs, you could end up pricing yourself out of the market. Thus, a buyer should consider their need vis a vis their budget, income stability and emergency funds to take maximum benefit of present scenario before it changes. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
First Republic Bank

First Republic Bank’s shares plunged nearly 40 per cent on Friday as the San Francisco-based lender reported an exodus of deposits in the first quarter. The drop in share value of more than 40% is despite a $30 billion infusion from 11 rival lenders on March 16 as the government and the private sector sought to intercept a broader banking crisis. Why did First Republic Bank Fail? First Republic Bank, the California based lender focused on high net worth individuals and their businesses, including offering mortgages at low interest rates to those customers. It has reported a loss of about $102 billion in deposits over the course of the first quarter. The poor reporting of first-quarter earnings coupled with massive deposit outflows led to 40 % collapse in shares. The resultant of the poor earning led to a mass withdrawal which was sparked by the fact that 68 percent of First Republic's deposits were uninsured. As we are aware that outflow of deposits poses problems for lending, given that banks need deposits to make loans for commercial and residential property, businesses and individuals. First Republic is mostly in the business of lending to homeowners, and for the most part, to individuals with very high credit scores thus the lender is holding fixed-rate mortgages with low interest rates on its balance sheet. The low interest rate offered to its customers resulted in decrease in net interest income owing to substantially higher funding costs and increase in expenses. As the interest rates increased in the last year, the bank’s interest expenses soared to $555 million in the first quarter — a whopping 2,675 percent increase from $20 million in the first quarter of last year, before the Federal Reserve raised rates for the first time. Since interest rates increased, the company also had to pay out more in interest on certificates of deposits and other savings accounts, while its income from long-term mortgages remains fixed since about 97 percent of all mortgages on its books were issued after 2008, when mortgage rates dipped below 5 percent for the first time ever. Thus, increase in expenses led to a decline in net interest income, which eventually resulted in depressing news for investors in its first-quarter filing. What is the future Course for First Republic Bank? The Financial Times reported that one proposal floated for the First Republic’s stabilisation was for a group of larger banks to buy some of First Republic’s bonds and assets at prices above their market value. Hence, raise equity which would have cleared some of its losses while the buyers could hold assets to maturity to avoid losses and in turn avoid the bank to fail and get seized by regulators. CNBC mentions that Reuters reported on Friday that U.S. officials — including from the FDIC, Treasury Department and Federal Reserve — are coordinating meetings with other banks to broker a rescue plan for First Republic. However, latest development shows First Republic most likely headed for FDIC receivership. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
First Time Down Payment

Down Payment & First Time Buyers Escalating home prices make it stiffer for first-time homebuyers to purchase a home in today’s market. But when renters become homeowners, communities benefit. New homeowners make home improvements, increase curb appeal, and raise the property values. With that they increase business for the neighbourhood, which generates taxes for the municipality thus a community prosper. What is a Down Payment? Unless you are buying your new home with cash, you need financing for buying the house known as a mortgage loan. A bank may lend you the entire amount you need to buy a home. This is known as 100% financing. But most mortgage loan programs require some contribution from the borrower. This contribution is called a “down payment.” It’s the upfront amount the borrower put towards buying the house, And first time buyers need to have a down payment strategy to qualify for a loan, which should be beyond their savings account. Fortunately to augment this process, the mortgage lending industry has relaxed down payment requirements over the years, enabling first-time homebuyers to enter the market sooner. Government and non-profit programs offer funding of residential down payment funds for first-time homebuyers. And some government-backed home loan programs require no down payment and offer low interest rates. Down Payments for First-Time Homebuyers Many first-time home buyers believe they need 20% down however, lenders offer mortgages with down payments as low as 3% of a home’s purchase price. In fact, the average down payment for first-time home buyers under the age of 30 is just 8%. If you have good credit, a 3% down payment conventional loan is often the best choice. The conventional 97, HomeReady, Home Possible and yourFirstMortgage loans are all affordable options with just 3% down. For borrowers with lower credit, an FHA loan with 3.5% down is an excellent alternative. To avail the 3% down payment certain basic criteria, have to be met which are as follows: At least one of the loan applicants must be a first-time buyer. The applicant either has never owned a home or has not owned a home in the last three years. The loan program can finance a one-unit property only , which can be either a house, condominium, cooperative, planned unit development, or townhouse — as long as the buyer plans to use the home as a primary residence. The loan must be a fixed-rate mortgage However, keep in mind that if you don’t put 20% down, you’ll have the additional cost of private mortgage insurance (PMI) and your loan would likely carry a higher interest rate. Down Payment Assistance Programs If you are short of money to make a down payment on a home, you can try to fix it with assistance programs at the federal, state, and local levels. Down payment assistance (DPA) is a home-buying program that gives cash grants, low-rate loans, and tax incentives to eligible buyers. These programs are funded by government agencies, private foundations, and local charities. Typically, down payment assistance programs require homebuyers to meet certain income requirements. Examples of down payment assistance include: $25,000 cash grant for a down payment on a home Cash for mortgage discount points and other closing costs Mortgage loans at subsidized interest rates Forgivable loans for a downpayment on a home State and local tax credits for home buyers -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Calculate Home Equity

What is Home Equity? Home equity is the current market value of your home, minus any liens attached to it such as existing mortgage. How does it work? The amount of equity in a house fluctuates over time in two ways , one is while the debtor makes payments towards the mortgage balances or as the property value appreciates/ depreciates depending on the market. Home equity is basically your real property value at that present moment. When you make a down payment on a house of 20% or more, you automatically add to your equity in the home since that amount is no more due. How to build home equity Most home equity is built in two ways: Home price appreciation — As your home’s market value rises, so does your equity Monthly mortgage payments — These slowly reduce your mortgage balance, which is the other factor in your home equity calculation Of course, you can help that process along. Perhaps most importantly, you can maintain your home well so that it’s competitive with others in your marketplace. Calculate your Home Equity Step 1: Find the current market value of your home The value of properties depends on the sector to which the asset belongs, the location, the area it covers, amenities offered, and the value of a recent sale in that location. Thus, the first thing you lay your hands on are the ‘comps’. Comparables or comps are the terms used for similar homes that have recently been sold in the same area to help find the best listing price when selling properties. However, no two homes are completely the same. The possible variations are endless. And, of course, condition and amenities will be crucial. This is where the part of appraisal comes in. A professional appraiser recognizes the differences between similar homes and assign them a proper value. Still if you want to have a rough estimate, the quickest and easiest way to get a good idea of your home’s value is to check a reputable online source. Along side Zillow and Redfin there are dozens of sites offering free “automated valuation models” (AVMs) exist on the web. Once, you have your comparables do your best to assess the value of the differences between them and your home. However, chances are, your chosen lender will appoint a professional appraiser to deliver the definitive value. You can skip all that valuation work if you get a professional to appraise your home. Hiring a pro will provide the most accurate appraisal possible. Whichever route to an appraisal you choose, you should end up with a figure that you hope is close to the final appraiser’s valuation of your home for you to have a practical outlook. Step 2: Know your current loan balance Next step is to find your current mortgage balance. You can check the same online in your loan service portal. You need to check the balance amount. The balance may differ from the payoff amount, which includes any outstanding fees and prepayment penalties you have incurred, in case you were to foreclose the mortgage. So, look for the balance. Step 3: Calculate your home equity Now, you need to simply deduct your mortgage balance from your home’s value, and That’s your Equity. Ways to tap your home equity You can leverage your home equity in the form of collateral to tap into cash in the form of a home equity loan or a home equity line of credit. Using a HELOC A home equity line of credit (HELOC) is a line of credit that uses the equity you have in your home as collateral. A HELOC, is a line of credit secured by your home that gives you a revolving credit line and often has a lower interest rate than some other common types of loans Using a home equity loan A home equity loan—also known as an equity loan, home equity installment loan, or second mortgage—is a type of consumer debt. Home equity loans allow homeowners to borrow against the equity in their homes. Home equity loans tend to be fixed-rate. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Unlock Fixed Rate

Lock in a mortgage rate Locking in a mortgage rate means a borrower entering into an agreement with the lender that allows to lock in the interest rate and cost structure that binds the borrower and the lender throughout the loan tenure. A mortgage rate lock includes the annual interest rate, fees, and monthly payment plan. For instance, you agree to lock in at 6.5% for a 30-year fixed-rate mortgage — meaning your lender guarantees you’ll pay 6.5% interest for the whole loan term and it won’t raise or lower your rate unless you refinance. Can you unlock a mortgage rate? Your mortgage rate lock is a commitment between you and your lender. Even if your home loan is continuing during the rate’s expiration date, your lender cannot change your rate — even if current rates suddenly rise steeply. This provides great peace of mind for borrowers. Once you’ve locked, there won’t be any surprise price increases. But the hind side is you can’t unlock your mortgage rate after locking even if the interest rate lowers. But there may be other ways to get a lower rate after you’ve locked. However, the agreement works both ways. If rates suddenly fall, you can’t just back out of the rate lock and expect your lender to offer you a lower interest rate. In other words, once your rate is locked, it can’t be unlocked. But there may be ways to get out of a rate lock if interest rates fall substantially. Your lender might adjust your rate only if the rate drop is typically at least a point in cost change. Two strategies to get a lower rate after locking So, if you lock in a mortgage rate and the rate goes down, you’ll usually have to keep the higher interest rate you locked in. But it’s not impossible to get a lower rate. You could: Ask your lender for a “float down option.” You’ll pay an additional cost at closing in return for getting lower current market rates Cancel your loan application and switch lenders. You abandon your current lender and start the entire loan process over with a new lender that can offer you a lower rate There are huge benefits and risks to both of these strategies. You might face a large float-down cost while opting for a float down option, or face a big delay and added paperwork while opting to cancel your loan and switch lenders. But if the savings you’ll see from a lower mortgage rate are significant enough, those hurdles may well be worth it. After all, if you keep your loan for years, a lower mortgage interest rate could save you thousands in the form of lower monthly mortgage payments. So let’s take a closer look at these two options. Float down option: A float-down provision or float-down option is an agreement between you and your lender that you can opt after you lock a rate. You’d pay an additional fee — usually 0.5% to 1% of the loan amount — to drop your locked-in rate to current mortgage rates and you pay the fees at the time of closing. For instance, a float-down provision on a $300,000 loan would likely cost around $1,500 (0.5 percent of the loan amount) The amount your rate will be reduced depends on the current market conditions and your qualifications as a borrower. Many lenders offer float-down options. But policies and fees vary. The float-down fee can cost as much as 1% of the new loan amount. However, paying an additional 1% upfront is still relatively cost-effective compared to the amount of interest you’re likely to save in long-term. However, a float-down option is only worth when your rate has to drop low enough to justify the cost. The savings from a lower interest rate accumulate gradually, over 30 years. Most homeowners don’t keep their mortgage for the entire 30 years. The average is around seven years. So when you calculate to weigh your savings, you need to factor in how long you’ll stay in the home or the loan. Switching lenders after locking Here’s a second scenario: You lock a mortgage rate, then rates fall, and your lender doesn’t offer a float-down provision. Or your lender can’t offer you a low enough rate to justify one. You’re still not out of options. The second way to ‘unlock’ your mortgage rate after a rate change is by simply jumping ship. You could cancel your loan application and go back to square one, applying with multiple lenders until you find the lowest possible rate. Switching lenders at the last minute could help you save big on interest and loan costs. You have the right to change lenders after locking to find a lower rate. But should you? If you’re refinancing your home, the answer may be yes. However, you have to end up spending some more time, paperwork and paying certain fees like third-party fees (like the credit check and home appraisal) twice. Other difficulties can arise if you have special loan considerations like poor credit scores, lower income, a down payment gift letter, a bank statement loan, or another attribute that makes it harder for lenders to approve your loan. And if in case your loan approval was challenging in the first place, it’s not worth throwing away your application to search for a slightly lower rate. What if mortgage rate lock expires before closing? Once you lock in a mortgage rate, you’re committed to a “worst-case” scenario. If your loan fails to close before your rate lock expires, and rates have gone up, you’ll pay the higher rate. But if your rate lock period expires and rates have gone down, you don’t get the lower rate. You’ll close at the rate you locked However, many lenders will allow a rate lock extension if interest rates have risen. While not all mortgage lenders require rate lock agreements to be in writing, it’s better for you to have a written agreement. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Mortgage Interest Rates

How can you avail the best interest rates available for you? Let’s see the factors that influence your mortgage interest rate and what all matters: Your financial health: Lenders assess your financial situation that includes your credit score, down payment, existing debt burden, and the consistency of your income. A credit score above 720 and a down payment of 20% typically earn you the best rates, but you can qualify for a home loan with far less but that calls for a higher interest rate. Choose your mortgage lender: Get rate quotes from several lenders so that you can be sure you’re getting the best possible deal. Type of mortgage you want: Each type of loan comes with a different average rate: conventional, conforming, FHA, VA, USDA, and jumbo loans. And adjustable-rate mortgages usually have a lower rate lock for the first few years Your loan term: The length of your loan affects your interest rate. Shorter-term loans (for instance, a 15-year mortgage) typically have lower interest rates than 30-year loan’s interest rate. Your loan's purpose: Rates vary based on your loan purpose; for instance, cash-out refinance loans have higher rates than no-cash-out refinances Factors that will be assessed by the Lenders before considering your loan and the interest rate. They will need to know your: Credit Score : A credit score is a statistical number that evaluates a consumer's credit worthiness and is based on his credit history. Lenders use credit scores to evaluate the probability that an individual will repay his or her debts. Debt-to-income ratio (DTI): This ratio measures how much of your income goes toward existing monthly debts to assess your surplus income which can cater to this loan emi. Income stability: Homebuyers need to show W-2 forms or pay stubs to prove a steady income. If you’re self-employed, you can provide tax forms or even bank statements Down payment: Most loans require a minimum down payment amount (USDA and VA loans are an exception). Putting more than the minimum down payment required could help lower your interest rate Home equity for refinancing: Mortgage refinance lenders will check your home equity which measures how much your home value exceeds your mortgage debt. Having more equity can be beneficial to lower your rate. In short, the better your personal finances look, the lower your mortgage interest rate. Raising your credit score or saving for a bigger down payment before you buy can help you get the best rates available. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Good Mortgage

What is a good mortgage rate today? A good mortgage rate differs for every individual based on their capacity of repayment. However, a better rate is always a lower mortgage rate. So, to get the right picture of the mortgage rates, one must take the quote from different lenders and compare them. This will give you the right picture of your eligibility and you can pick up the cheapest lender with all other factors suitable for you. In today’s market, a good rate could be 6% for one borrower and 8% for another on the same day. Mortgage rates are ever changing and can change within a day. It might just take a day for a good mortgage rate to change to a lesser affordable rate. The monetary policy pursued by the Federal Reserve Bank is one of the most important factors influencing both the economy generally and interest rates specifically, including mortgage rates. The Federal Reserve does not set the specific interest rates in the mortgage market. However, its actions in establishing the Fed Funds rate and adjusting the money supply upward or downward have a significant impact on the interest rates available to the borrowing public. According to Freddie Mac’s weekly survey on 2nd Feb. 2023, the average 30-year fixed rate was 6.09% and 15-Year fixed rate was at 5.14%. It also mentions that the reduction of one percentage point in rate from the earlier peak of 7% in November 2022 can actually allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price. A good mortgage rate is different for individual. The advertised rates are targeted at prime borrowers with good financials, with high credit scores & few debts. There are many variables affecting your interest rate. An attractive rate for one borrower may be way too high for another and also their individual financial standing will decide their best rates. And all lenders weigh these factors differently. Ideally, you look for a mortgage lender that is used to dealing with people who are financially similar to you. And the best way to find your ideal lender is by comparing loan offers. Speaking with three different lenders will likely get you three different rates and sets of fees. Compare and choose the best rate. However, in current scenario a good mortgage rate for a 15-year fixed loan generally start in the 5% range, while for a 30-year mortgage typically start in the 6% range. As told earlier your credit score, debts, down payment and financial stability will decide your rate, since lenders will assess all these to offer you a loan. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
2023

Wishing all our Readers are Very Happy & a Prosperous New Year. How do we see the 2023 Housing market? 1. Mortgage rates are likely to pull back: The increasing trend of mortgage rates after reaching its peak in early November is expected to gradually edge lower and stabilize, with rates going as low as 6% over the year. The mortgage rates are expected to fall since inflation is expected to recede and U.S. Economy is preparing for a modest recession. Money.com mentions Lawrence Yun, chief economist at NAR, for example, who thinks the 30-year mortgage rate will end in 2023 at around 5.5%. The home purchase became less affordable last year because of high home prices later combined with high mortgage rates. Any improvement in rates can bring the homebuyers who were priced out back to the table. However, expecting mortgage rates to go back to 3% looks overtly ambitious. 2. Inventory to remain tight: Next year inventory is expected to see better days, however, it will still be below demand levels. We are seeing a better balance in the demand-supply rates because homes aren’t selling as fast since there is a temporary pullback in demand and sellers were bringing in new listings, which kept bridging the gap. Once the borrowing conditions soften and the market normalizes there will again be a gap in supply and demand. Even if the inventory adds in, there will still be undersupply. 3. Home Prices will Level Off : The market needs a correction to reach a healthier balance between sellers and buyers, as well as for a healthier affordability. As per experts, the correction may vary from single digit to double digit even an increase of single digit is a possibility. However, one certainty is there won’t be the double-digit price increases that have been the hallmark of the pre-pandemic market. Shortage in inventory will keep home prices from falling too far. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Homeowners Insurance 2

Home Insurance Continued….. Determine How Much Coverage You Need How much insurance coverage you require depends on your specific need. First look at each standard coverage type and adjust the amount according to your specific need, then add extra coverage to fix any gaps. Let’s take a look: Dwelling coverage. Take the help of your insurance agent to conclude on an estimate, since the cost to replace your home and other structures could vary depending on local construction and material costs. It’s prudent to add extra coverage like extended or guaranteed replacement cost coverage, if it’s available, to help account for possible surges in local construction costs, especially if your area is prone to natural disasters. Contents coverage. Create a home inventory before proceeding to calculate how much coverage you need for all your material. You must try to add “replacement cost” coverage in your home insurance policy, which pays the cost of new items. Actual cash value only pays the depreciated value of your damaged items. Liability coverage. a general thumb rule is to buy enough liability insurance to cover your net worth, or what can be taken from you in a lawsuit. Additional living expenses (ALE) coverage. ALE coverage is typically set at a percentage of your dwelling coverage, such as 20%. But if you need more, you can increase your loss of use coverage. This pays the extra costs if you can’t live at home due to damage and have to live elsewhere while it’s being rebuilt. Other coverage types. You can fill gaps in a policy with coverage types such as flood insurance, earthquake insurance, water, sump overflow, and home systems breakdown coverage. How to Save on Homeowners Insurance Paying more than what is required for home insurance is a waste. So, let’s understand ways to save on homeowners insurance. Window shopping Request homeowner’s insurance quotes from multiple companies. Make sure to get quotes for the same coverage levels, so that you can compare the charges, any hidden costs, and details of coverage. Keep your eyes open and maximize discounts Home insurance companies offer many types of discounts which may include a new or renovated home, having a security system, being claims-free, paying the policy in full annually, having multiple policies with the same company, and being a senior citizen. Discuss with your agent and avail the discounts applicable. See how much you could save by increasing your deductible Your deductible influences your home insurance amount. The higher the deductible, the less you’ll likely pay for coverage. Ask the homeowner's insurance company how much you would save by increasing your deductible. Limit potential risk Home insurance companies view swimming pools, treehouses, and trampolines as “attractive nuisances,” which can raise your homeowner's coverage rates. Limiting those attractive nuisances can get you cheaper home insurance rates. Other Home Insurance Considerations “Schedule” high-value items. To properly insure valuable items, consider “scheduling” them. When you schedule personal property you insure items separately for their full value, and the coverage in your home insurance policy can then be used for everything else, such as clothes, rugs, and kitchenware. Certain types of items, such as jewelry, have “sub-limits,” meaning your insurance company will only pay up to a certain amount for those items. Consider getting replacement cost instead of actual cash value (ACV) coverage. Choose replacement cost coverage if you’re looking for the best homeowners insurance. Replacement cost pays to replace an item with a brand-new version, whereas ACV reimburses you for an item’s depreciated amount. Buy endorsements that fill specific gaps. Endorsements are add-ons. That helps you to tailor your home insurance policy and fill in any coverage gaps. For example, some insurance companies sell increased coverage for landscaping, home systems breakdown, and water backup and sump overflow. Buy additional insurance for certain natural disasters. Even the best homeowners insurance plans can fall through if certain natural disasters hit, such as floods, earthquakes, and landslides. These problems aren’t covered by standard home insurance. They require special policies such as flood insurance and earthquake insurance. Need for Homeowner’s Insurance while you apply for a Mortgage While you apply for a mortgage, the homeowner usually has to provide proof of insurance on the property before the financial institution will loan any funds. If the homeowner does not have their property covered from loss or damages, the property insurance can be acquired separately or by the lending bank. Homeowners who prefer to get their own insurance policy can compare multiple offers and pick the plan that works best for their needs Payments made toward a homeowners insurance policy by the lending bank are usually included in the monthly payments of the homeowner's mortgage. The lending bank that receives the payment allocates the portion for insurance coverage to an escrow account. Once the insurance bill comes due, the amount owed is settled from this escrow account. Certain Similar Terms Homeowners Insurance vs. Home Warranty Does Home Insurance & Home Warranty sound similar to you? Hey… but they are way different. A home warranty is a contract made that provides for repairs or replacements of home systems and appliances such as ovens, water heaters, washers/dryers, and pools. These contracts usually expire after a certain time period, usually 12 months. However, they are not mandatory for a homeowner to buy in order to qualify for a mortgage. A home warranty covers issues and problems that result from poor maintenance or inevitable wear-and-tear on items—situations in which homeowner’s insurance doesn't apply. Homeowners Insurance vs. Mortgage Insurance A homeowner’s insurance policy and Mortgage Insurance are different. While both deals with Homes, homeowners insurance protects the homeowner, and mortgage insurance protects the mortgage lender. Mortgage insurance is typically required by the bank or mortgage company for homebuyers making a down payment of less than 20% of the cost of the property. Mortgage insurance covers the lender for taking on the extra risk of a home buyer who doesn't meet the usual mortgage requirements. If the buyer should default on payments, the mortgage insurance would compensate. It's an extra fee that can be figured into the regular mortgage payments, or be a lump sum charged when the mortgage is issued. What Does Home Insurance Not Cover? A standard home insurance policy excludes the following: Ordinance of law, such as a government requirement to demolish, repair or rebuild your home to meet local ordinances Earth movement, including earthquakes, landslides, and sinkholes Water damage, including floods and water backup from sewers and drains Power failure Neglect, such as a failure to maintain heat War Nuclear hazard Intentional loss Government action, such as a seizure of property Wear and tear Smog, dry rot, rust, or other corrosion Discharge, migration, seepage, escape, or release of pollutants Smoke from agricultural or industrial operations Mechanical breakdown or a latent defect that causes property damage Shrinking, settling, expansion, or bulging of bulkheads, pavement, footings, foundations, patios, walls, floors, roofs, and ceilings Vermin, rodents, birds, or insects Damage caused by an animal you own -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Homeowners Insurance 1

What Is Homeowners Insurance? The house you live in and all the valuables inside add up to a big investment that deserves quality protection, which is why homeowner’s insurance is vital. Homeowners insurance is a form of property insurance that covers a private residence. The insurance insures against losses and damages to an individual's residence, its contents, loss of use, or loss of other personal possessions of the homeowner and thus pays to repair or rebuild your home, and repair or replace personal belongings, after damage from a wide variety of “perils”. Problems covered by Homeowner’s insurance include fire, tornadoes, falling objects (like a tree), lightning, windstorm and hail, vandalism, and theft. Home insurance also pays for lodging and other expenses (like restaurant meals) if you can’t live in your home due to a problem covered by your policy. It also covers other types of problems—for example, medical bills if someone is hurt on your property or repair bills if you accidentally damage someone else’s property. It also provides liability protection and coverage for additional living expenses if you’re forced to stay out of your home due to damage. KEY TAKEAWAYS Homeowners insurance is a type of property insurance that covers private residences The policy covers losses and damages to the house and its assets. The policy usually covers interior damage, exterior damage, loss or damage of personal assets, and injury that arises while on the property. Every homeowner’s insurance policy has a liability limit, which determines the amount of coverage the insured has should an unfortunate incident occur. A standard home insurance policy contains these valuable coverage types. Dwelling coverage Your home insurance policy covers your house structure under this dwelling coverage. The dwelling coverage amount should reflect the cost to rebuild the house based on the construction and labor costs in your area. There’s related coverage for other structures such as a fence or unattached garage. Dwelling coverage is not based on the real estate market value of your home. Personal property coverage Personal property coverage is paid to repair or replace your personal belongings if they are damaged or destroyed due to any unfortunate incident. Personal property includes furniture, clothes, kitchenware, house decor such as curtains, and every other thing you might have packed away in boxes in your basement or attic. The coverage amount for personal property is usually set between 50% to 70% of the dwelling coverage amount. For example, if your dwelling is insured for $150,000 and your contents coverage is set at 50%, you’ll have $75,000 in contents coverage. You can buy more personal property coverage if you need it. Liability insurance This liability insurance pays for injuries and property damage accidentally caused by you to others. Liability insurance pays for third-party medical insurance, it also pays for a lawsuit judgment if you’re sued, and legal defense costs. If your liability insurance is inadequate, you can land up in a trouble for any amount over the policy limits. For availing the best homeowner’s insurance, a general rule of thumb is to buy enough liability insurance to cover your net worth, or what can be taken from you in a lawsuit. Additional living expenses coverage Also known as “loss of use,” additional living expenses coverage can pay for extra expenses like hotel bills, restaurant meals, and pet boarding if you have been forced to live out of your home while it’s being repaired due to damage covered by the policy. The amount you have for additional living expense coverage is typically set at a percentage of your dwelling coverage amount, but you can buy more if you don’t think it’s enough. Is Homeowners Insurance Required? Homeowners insurance isn’t typically required unless you have a mortgage. However, when Mortgage lenders are lending you money basis your home, they see your home as their investment and hence they expect you to take care of the property and ensure their investment, that includes having home insurance. Mortgage lenders may require a mortgage escrow account for both home insurance costs and property taxes, so you stay current on your insurance and tax payments. Once you pay off your mortgage, you generally aren’t required to have home insurance, but it’s still a good idea to maintain coverage. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Down Payment 2

The down payment amount you decide to pay can dictate the terms for a few different aspects of your mortgage repayment process. What should be The Right Mortgage Down Payment Before you conclude with the amount you want to pay as a down payment, it is pertinent to weigh the benefits of both large and small down payments. Since they have their own unique set of benefits. It’s important to weigh them carefully and consider your own personal financial situation and goals before deciding on the down payment. Benefits Of A Large Down Payment Lower rates and Monthly Mortgage Lenders prefer large down payments as it involves lesser risk you pose to them. The larger your down payment, the less you have to pay each month in both principal & interest. Your down payment is an interest-free way to get a kickstart on paying off your home. It decides your Mortgage Insurance. Certain types of loans require you to pay mortgage insurance. On a conventional loan, you generally need to put 20% down to avoid paying private mortgage insurance which is usually a monthly fee that you pay as part of your monthly payment or is paid upfront by the lender in exchange for a slightly higher interest rate. On an FHA Loan, 20% down could be the difference between paying for mortgage insurance for the life of your loan and paying mortgage insurance for just the first 11 years. Lower Debt-To-Income Ratio (DTI) A lower DTI ensures you have more borrowing power in the future. DTI represents the debt percentage of your monthly income. A high DTI can prevent you from getting further loans or credit. (Most mortgage lenders look for a DTI of about 45% or lower.) If you’re looking to take on other loans or buy a second home, then borrowing less (by putting more towards the down payment) could keep your DTI manageable. Alternatives To Making A Large Down Payment In case you are unable to make a large down payment at the time of purchase, you may still avail of the benefits like reducing the amount of interest you pay on your home by making larger payments to your mortgage principal. Many homeowners are able to do this if their income increases over time. The process of making larger payments in order to pay off your mortgage faster is sometimes called accelerated payments. Benefits Of A Small Down Payment It might take a longer time to save for a 20% down payment. A lower down payment can help you own a home sooner. Set aside your emergency fund It’s prudent not to dip into your emergency fund by emptying all funds towards a down payment. Keeping some money in the bank for emergencies is a smart move. For emergency fund requirements you don’t have to fall back on credit. Hanging onto some of your money could give you peace of mind and be a cheaper way to cover emergency costs. Money for Repairs and Renovations: Not emptying your savings and paying less towards your down payment might save you money for the repairs and renovations, you would require as a new homeowner. Setting aside this money upfront can make homeownership less stressful. You might need money for other ventures Consider the opportunity cost of putting down more money on your home on the front end. Though you might be able to get a lower interest rate and monthly payment, it might make more sense for you to use that money for college tuition, investing, or something else. The Minimum Mortgage Down Payment As we know for many buyers, a 20% down payment isn’t realistic. Fortunately, 20% down is no longer the industry standard. The average down payment paid for a mortgage is about 6%. Over the years, the industry has changed to make homeownership more accessible and affordable for all. It’s now possible to get a mortgage for as little as 3% down, although some loans (like Department of Veterans Affairs (VA) loans and U.S. Department of Agriculture (USDA) loans) require no money down. Why Lenders Typically Require A Down Payment By giving you a loan, your mortgage lender is taking a risk on you. If you stop making mortgage payments, it’s possible that the lender won’t be able to make back the money they lent you, and the recurrence of this incident will make them lose. A Down Payment Makes You Less Risky To Lend To Putting money down helps mitigate risk for the lender in a couple of ways: It represents your investment in the home. If you have already invested in the house by means of a down payment, you are less likely to walk away from the thousands of dollars you put into it by stopping to pay your lender. The more you remain invested, the less you are to default on your due payment. It lowers the amount the lender has to give you for the purchase. If you’re paying 20% of the purchase price of the home, and they’re only lending you 80%, then not only you are more invested but also that they have put in less money to worry about getting back if you stop paying. It’s important to note that the down payment requirement isn’t set by the lender alone. In many cases, the down payment requirement comes from the investor of the loan (which may be the Federal Housing Administration, Fannie Mae, the Department of Veterans Affairs, or someone else). Down Payment Assistance Programs Saving for a down payment can often be an obstacle to homeownership. Keep in mind that depending on your location, and your level of financial need, there may also be down payment assistance options worth looking into. These programs have various requirements you have to meet in order to qualify. For example, some programs are only available to first-time home buyers while others require a minimum credit score. Be sure to check the requirements for any programs that you’re interested in. The Bottom Line On Down Payments Though a down payment is a crucial part of your home loan, however, it’s only a small piece of the overall financial picture. Deciding on the down payment amount you’re comfortable with can help you search for homes that are within your budget and keep your emergency savings in place. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Down Payment

DOWN PAYMENT What is a down payment? While in a real estate transaction the amount of cash, which is a percentage of the purchase price the buyer pays upfront is called the down payment. Down payments are typically a percentage of the purchase price and can range from as little as 3% to as much as 20% for a property being used as a primary residence. The required down payment is usually determined by the type of mortgage you choose, but your financial situation and the type of property you’re buying (whether it’s your primary residence or an investment property, for example) also factor in. In addition to your down payment amount, your credit score, credit history, total debt, and annual income will influence how much of a loan you can qualify for. Your down payment determines your rate of interest, thus the down payment you make aids in decreasing the amount of interest paid over the lifetime of the loan, lowering the monthly payments, and providing lenders with a degree of security. The amount of down payment you make on your home impacts what kind of mortgage you qualify for, how much money a lender will give you, and the loan's terms and conditions. Benefits Of Making A Larger Down Payment Your ability to save for a down payment shows Your readiness for the financial commitment of owning a home. How does a large down payment affect you: · Lower mortgage rate: The lesser money you borrow as a percentage of the home's purchase price, the lesser risk your loan poses to the mortgage lender. As a result, larger down payments tend to correlate with lower interest rates, being offered by lenders. · More equity: The more you pay upfront from your pocket, the greater percentage of your home you own outright, and the more equity you have. That can be especially handy if you're looking to finance a big renovation project or other purchase because you can tap your home equity through a cash-out refinance, home equity loan, or home equity line of credit to borrow money against the value of your home relatively inexpensively. · Your actual purchase price is lesser: The more you pay upfront, the lesser amount you borrow. The lesser you borrow will make you spend lesser on your interest payment. Thus, when you add up each penny spent on the home you will be in a beneficial state since you paid less on interest which is also a cash flow added to your actual purchase price. · Lower monthly payments: The lesser you borrow, the lower can be your interest rate. And you can expect lower monthly payments, giving you more cash flow for other financial goals and lifestyle needs. · Cheaper closing costs: The fees you pay to your lender at closing are usually calculated as a percentage of your loan's total value, so the less you borrow, the less you’ll owe them at closing. · More competitive offer: If you get into a seller's market and compete with several other buyers, a larger down payment at the time of purchase will give you an edge to keep your offer more competitive than the others. By showing that you can afford to put more down, you might give the seller more confidence that your loan will close. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Credit Score

CREDIT SCORE Credit is basically the practice of borrowing money, with the promise of paying off the debt within a stipulated amount of time. Consumers, purchasers, and business ventures alike are highly dependent on credit in the present day. The entire system of the availability of credit, and the time period of the acceptance of an offer is dependent on your credit score. The failure to do that adds to the overdue sum of a certain amount of interest. Defaulting on a regular basis on the payment of overdue bills and debts leads to a low credit score. A low credit score hampers your purchasing power for future credits and the availability of loans. Having an excellent credit score is a must for the availability of loans and credit for the purchase of something exclusive. The credit score is a statistical method to ascertain the individual’s intention and ability to the repayment of the money owed by him/her. There are a number of credit bureaus that evaluate your personal report and send you the score. Every organization follows different evaluation systems, and the calculation is based on a wide variety of factors. Role of Credit Score The first thing which is checked by the credit issuer after receiving your loan or card application is your credit score. The process is the same when you are applying for a card, a loan, or a mortgage. Credit reports and credit scores are markers that enable a financial institution to check your reliability for paying off the debt on time. It gives indications of your intention and repayment ability to the financial institutions. The major importance of the credit score is thus the risk assessment of the individual or the asset. Good Credit Score Advantages Having a good credit score will help you in getting the grants without much of a hassle since you will be assessed to be of lower risk. More importantly, you will be asked to pay off your debt at lower interest rates. LOW CREDIT SCORE If you are amongst the lower credit scorers you need to improve on it. This is because of the fact that your application might not be rejected outright if you do not fit the high standards, but the credit you get will be laced with a high-interest rate compared to someone who has a better credit score. Thus, the lower the credit score, the higher the rate of interest, which eventually results in a higher monthly payment. In addition to credit scores, banks & other financial entities may also use other internal scoring mechanisms to establish the creditworthiness of an individual Components of Credit Score In order to improve or maintain a good credit score it is very important to know the various components of a credit score. It is only when you know the potential areas of improvement that you will be able to devise a plan to achieve a better credit score if it has gone lower. The following are the main factors of evaluation for credit scores: Credit repayment history of the individual. Current debts/repayment liabilities of the individual Duration of time of credit history Credit mix Frequency of applications of new credits. Ways to increase your credit score quickly Building a good credit score takes years of maintaining good habits of repayments & right intention. However, within a reasonable time, there are a few things you can do to give your score a boost before applying for a mortgage. 1. Dispute credit report errors. You should start by getting a copy of your credit report and looking for any mistakes. There may be errors on your credit report that could negatively impact your score. Review your credit reports for errors. Look through each report for mistakes such as incorrect name or address, credit lines that don’t belong to you, duplicate entries, incorrect account status, and other errors that could lead to a lower score. Since each credit bureau collects and reports credit information independently, you’ll need to check all three reports. If you find a mistake, you’ll also need to dispute it with each bureau. Each one has a slightly different process for disputing errors, but instructions can easily be found on their websites. 2. Pay down some debt. Once you have checked your credit reports are up-to-date and accurate, try to reduce the amount of debt you owe. One of the major deciding factors in applying for a mortgage is your debt-to-income ratio. This number measures how much of your monthly income goes toward paying back debts and what is the surplus. Lenders prefer that your total debt payments take up a relatively small portion of your total monthly income. Eliminating a payment may help you qualify for a loan. Once you pay off a loan, that loan’s monthly payment gets closed, thus you free up that amount from your monthly burden and improve your debt-to-income ratio. Most mortgage lenders require a back-end DTI (the total amount of income allocated toward debt, including your potential mortgage payment) of no more than 43%. So by paying down a credit card balance or paying off your car loan or personal loan, you will immediately lower your DTI and increase your chances of approval. And though DTI doesn’t directly affect your credit score, paying down outstanding debt does. The more of your available credit you borrow against, the more it can negatively affect your score. So, by reducing how much debt you have in your name, you become a much more sought-after borrower. 3. Ask for a credit limit increase. In addition to paying down debt, another way to improve your score instantly is by getting a credit limit increase. While this won’t change your debt-to-income ratio, it will lower your credit utilization since your outstanding debt remains the same while your available credit increases. Often, you can request an increase and get approved instantly through your card company’s website. Keep in mind that credit card issuers will sometimes run a credit check before granting a credit limit increase. 4. Get added as an authorized user. Another way to instantly improve your credit is by piggybacking on someone else. You can approach a family member or a close friend with excellent credit and ask them to add you as an authorized user on one of their credit cards. When someone adds an authorized user to a credit card, that account’s information is reported on both people’s credit reports. If you've added to an account with a long, clean history, it can bump your score a bit higher. The best part is, you don’t actually need to use the credit card or even know the card’s information. The primary account holder’s activity will automatically transfer to you, too. Credit bureaus don’t give as much weight to authorized user status as they do primary cardholder status. Still, every little bit helps. Just keep in mind that you’ll need to share both the good and the bad of that account. If the primary holder misses a payment or maxes out the card, you’ll suffer the consequences as well. 5. Request a rapid rescore. Once you’ve done all the hard work of cleaning up your credit, you’ll want your credit scores to reflect that. That’s where rapid rescoring can help. You might be able to use rapid rescoring to get your credit reports updated quickly (within a week or so) and receive a more favorable score. This is much faster than the weeks or months it takes for credit changes to be reflected in your score normally. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Opportunities Are Like Sunrises

“Opportunities are like sunrises. If you wait too long, you miss them.” - William Arthur Ward Are you worried that you have lost your opportunity of buying your dream home while the interest rates were low? Keep your worries aside and let’s see what best we can advise you to turn your dream into reality. None of us can predict what will happen in the real estate market over the next few months. However, one thing remains undisputed owning a home creates your overall wealth, your own shelter, and your peace of mind. Let’s see how can we help you... 1. Temporary interest rate buydown: Houses are a crucial investment. Any advantage that works your way in saving costs is a good thing for you. A temporary interest rate buydown could help you save money on interest and have a lower payment at the beginning of your loan term. This will benefit you in two ways. First, you’ll save on interest compared to someone who doesn’t have a temporary buydown. Second, your payment is lower at the beginning of your term. This could be helpful if you need the money you’re saving for furniture, renovations, or anything else. The difference between the interest you would pay under the full rate and what you’re actually paying for the first year or two of your mortgage is placed in an escrow account. Each month, the investor gets a payment from the escrow account in order to make up the difference between what you’re paying during the buydown and what’s owed based on your interest rate. 2. Improve your credit score: Your loan might be approved even if you have a bad credit score, but the process is a whole lot easier when your credit score is in good shape. And if you’re staggering between fair and good credit, it could mean a difference of thousands of dollars in payment of interest over the life of your loan. So before you start your mortgage application, it’s a good idea to boost your score as much as possible. Fortunately, there are several ways to improve your credit score. Ø Dispute credit report errors Ø Pay down some debt Ø Ask for a credit limit increase Ø Get added as an authorized user Ø Consider a credit builder loan Ø Request a rapid rescore Ø Don’t miss any payments Ø Don’t apply for a new credit Ø Keep credit card balances as low as possible Ø Don’t close accounts 3. Make a larger down payment: Your ability to save for a down payment is a good sign which shows you are ready for the financial commitment of owning a home. Making a sizeable down payment will give you a lower loan-to-value ratio (LTV). Here are some clear benefits waiting for you in lieu of a large down payment: Ø Lower mortgage rate Ø More equity Ø Lower Monthly payments Ø Cheaper closing costs Ø More competitive offer One of the first steps in the home-buying process is to work with a real estate agent to help you in understanding and get all these processes right for you. Make the best use of the opportunity that’s waiting for and don’t delay further. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Uncertainty Opens Door to Opportunity

Uncertainty Opens Door to Opportunity My clients Ronita & Rohit chose a beautiful house and we had already offered. The seller had bought the property at 1.135 million in the month of may and then they flipped, by the month of July they got the property listed at 1,198 million. There expectation was another 100k. We had written our offer at 1.290 million with an appraisal contingency of minimum appraisal value to be at 1.225. In that case the buyers had to be prepared for the rest of the 65K . The appraisal was conducted and everything went good. The appraisal report said that the property got appraised at 1.228 million, which was a good news since our base appraisal contingency was 1.225 million.. The next day I was all set to remove my appraisal contingency when my loan agent called and asked if I have checked the report thoroughly. I knew I had done that as for all my other appraisal reports and checked all important points. However, he apprised that the appraiser had ticked in a box, which mentioned “declining market”. Well, this came as a surprise, since during my stint in the industry, I never came across any appraiser to have checked on this box. Furtherance to the opinion of the appraiser I enquired with the lender about it’s impact on the loan process. The loan agent apprised earlier as decided these buyers would do a 10% down payment along with the difference amount of 60k .Now, because of this opinion of the appraiser the loan agent can’t accept a 15% down payment and it needs to go up to 20% down payment from the buyer side plus the difference amount plus they also needs to show a fund reserve of 80k in liquid. Now, the buyer was running short of funds to meet up all these criteria. Moreover, Rohit’s funds in stocks will get only 40% value. Thus, that created further difficulty. Meanwhile I took an extension from the seller. Got my buyer introduced to other lenders. Also, I raised a point to the existing lender that if the appraiser appraised a property himself at a higher rate at 1.228 in August which was only bought at 1.135 in May, then how did he mark it as a declining market. He is self-contradicting his own statement. I approached the lender to review the file and asked them to get that 5% extra down payment to be waived off and let my client go ahead with the 10% down payment. The existing lender’s ROI was at 4.125%, but he had to give the 62k difference amount plus 15% down payment plus had to keep a liquid reserve of 80k. However, I convinced my buyers to get the home appraised by another lender known to me. After a lot of ifs & buts my buyers agreed and the second appraisal was initiated. The second lender had sent their appraisers and got the property appraised. The appraisal was done the same day and was appraised for 1.290 million , our offered buying price. With this Second lender here was no fixed down payment , since the entire offered price was funded they could go ahead with 10% or 15% down payment plus you need not pay any extra differential amount nor you have to show any reserve, but yes, the rates were higher at 5.6%. The Rate of interest kind of deterred my client to go ahead with the new lender. And Rohit was more inclined to take it up with the previous lender since the interest rate was comparatively lower. In spite that the buyer asked me to cancel the next lender’s loan documents, I kept it on hold and was following up with the buyer if his loan has got the approval from the previous lender since he had only another 15 days in hand. On the other hand, Rohit was due for an employment change recently and that might just coincide with the disbursal time. In that regard asked him to speak to the previous lender about his upcoming job change. Following that, he went to the lender and spoke to him about his forthcoming job change. Listening to that, the lender showed apprehensions over the processing of loan within the stipulated time. The concern was the second employment verification which was due before disbursal of the loan will be done around the time by when Rohit would have to be already in notice period and with that verification feedback the chances of the loan disbursal become negligent. At last, based on this opinion from the lender they realised that the time they had in hand to get the disbursal done might not work in their favour. Thus, after a lot of thought both of them agreed to go ahead with the second lender whose interest rates was a little higher but surely, he didn’t have to empty his pockets to avail the loan. The disbursal verification was completed by 28th, and on 29th he had put down his papers and the loan got disbursed on the 30th. Today they are the owners of the beautiful home. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Rent or Buy?

Unsure if You Should Rent or Buy? People generally have two options living in a place and ultimately calling it their home. One is to rent a home that someone else owns and the other is to purchase a home to own themselves. However, all these rising costs can make deciding whether to rent or buy a dizzying debate.“Maintain financial flexibility and keep your costs of getting in and out lower!” Your rent brain says.“Buy now before mortgage rates go any higher and start soon to build equity before it is late!” is what your buyer instinct says. Factually, the decision between renting or buying for most people is less about home prices or rents and more about whether you’re ready to be a homeowner. Facts about Rent Many people believe that renting is less expensive than owning a house. But it turns out it’s actually cheaper to pay a monthly mortgage than rent. The number of homes available to rent across the country is low and thus it is exorbitantly priced. New research has found that it is now cheaper to pay a mortgage than pay rent in all areas for starter and family homes.With the news of the Fed raising interest rates once again, the purchase market will see fewer players owing to affordability. Thus, renters have a better opportunity to strike a better deal with fewer competitors and thus offer price can remain closer to the listed price. Why Buy? Let’s try and understand why is it better to own a home rather than stay in a rented property.Owning a home is an investment many people can understand better than buying stocks because they get the tangible daily lifestyle benefit of living in the home. But the financial benefits are also significant and can be more substantial than stock investing. As a home appreciates, it accrues faster than a stock might because you get the appreciation on the entire home's value, not just the gain your down payment cash invested. The Advantages Of Buying A Home Let’s take a peek: • Your monthly repayment is for the equity you will own and not paying your landlord’s mortgage.• You fully own your home at the end of the mortgage’s term. That makes you a Homeowner.• With rising home prices your equity also rises.• You don’t need other’s permission to have pets or redecorate• Any uplift you make to your house could increase its value• You can’t be forced to move by a landlordMoreover, many homeowners reap benefits that you can’t get from renting, such as financial security and stability and tax deductions for retirement savings. With each mortgage payment, you get closer to fully owning the home. The equity you build can be leveraged for loans like cash-out refinances, home equity loans, and lines of credit that can be used to improve the home and boost its value or be used in financial emergencies. If you are considering moving from rented property to owned property this is the right time for you. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Waiting For Market Correction

WAITING FOR MARKET CORRECTION Are you waiting for a market correction to buy your home? Can you predict how the market will behave even 3 months down the lane? Today the inventory is low but increasing, the prices can be negotiated. Tomorrow the asking price goes beyond your affordability. Can you be sure of the market? Can you be sure that the mortgage prices will remain this or come down? They might just increase after correction. None of us can predict the market from this situation. You can’t time the market. Every moment is a perfect time for homeownership. If you are pushing your dream because of the current market, you might end up losing your dream of home ownership. Let’s see the better side of buying a house right at this moment. After all, buying a home is a long-term investment and the sooner it is done the better. Rising Home Prices Even with increased inventory, the prices of homes haven’t stopped increasing. Also to keep in mind, whatever price you pay for a home, that will only increase in the future. Which means more equity for you as a homeowner. Increased Inventory Active housing inventory going up is good news for potential home buyers. It’s a great time to grab the opportunity and get creative with purchase choices. Rising Rents Whatever rent you are paying now is a one-way money flow, for which you aren’t getting any equity. Instead, your rents will only keep rising and you will end up paying up for someone else’s mortgage. Less Competition There are fewer buyers in the market owing to affordability, which only means you face less competition. You have wider room for negotiation and you might end up owning a house with more equity with a better negotiation. Mortgage Rates Even when the Fed is increasing its rates, fixed mortgage rates are cut down. The lenders have already priced an expected increase in those costs because of inflation. Thus, you don’t need to be afraid of further shock from mortgage rates. They are within affordable limits now. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Mortgage Rates Are Dropping

MORTGAGE RATES ARE DROPPING … WHY??? Even though national GDP contracted for the second quarter in a row and around the same time as the Fed’s rate increase was announced, new data showed the average 30-year fixed mortgage rate made a big move in the reverse direction. The average 30-year fixed rate lowered by 17 points to be at 5.59%. The mortgage rates aren’t directly related to Fed’s actions but Fed’s rates do affect lenders’ cost of funds. Thus, most lenders have already priced in expected increases in those costs because of inflation. Mortgage rates often move in anticipation of expected increases in lenders’ costs to avoid sudden shock. Lenders base their interest rates on what it would cost them to lend the money to consumers, which are already affected by inflation. Experts agree the latest Fed rate increase and its potential impact on the mortgage market shouldn’t cause homebuyers to pause or drastically alter their plans. The rate and terms a borrower get quoted depend more heavily on a borrower’s personal credit, loan type, and what mortgage lender they choose. The average mortgage rate is in the mid-to upper 5% range, but that’s just the average. Borrowers in the same place seeking similar loans might be offered widely different rates – maybe one is quoted at 5% and another at 7% – depending on their credit. That’s why it’s important to work on your credit score. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
San Francisco Buyers

SAN FRANCISCO BUYERS For San Francisco Potential Buyers, San Francisco saw the fourth-highest decrease in housing transactions in markets across the U.S. with a 29.1% drop in sales between June 2021 and June 2022. Are you worried to buy a home in San Francisco in this situation? Hey, hold on!!! The cover page doesn’t tell the full story. Though there is a decrease in home sales in San Francisco with the active housing inventory going up is a good thing for potential home buyers. The prices of homes in San Francisco have seen an upward trend of 12.6 percent over the past year, and the median home price is nearly $1.3 million which implies that buying a home in the area is not an option for many. Hence, there are fewer buyers in the market currently. Thus, buyers who are able to pay the big purchase prices may see this as an opportunity because sellers are also getting realistic due to fewer buyers. The pricing now is more realistic. Thus, this is a great time for potential buyers to grab the opportunity and get creative with their purchase choices. There are many buyers who think there will be a massive market correction. But do you really think that would happen soon? Since the active housing inventory is going up and it looks impossible to match up the inventory in near future. Alongside, the mortgage rates are expected to go up with rising inflation. We can expect the mortgage rate to lower only when the inflation slides down. How soon do we expect it to happen?? The interest rates are still in the reasonable bracket and they are expected to rise. That means that there will be fewer homes available in the market with higher prices and higher mortgage rates. Now decide whether you want to pay the current prices or higher prices in near future. The tech companies are still investing in commercial real estate spaces in the Bay area thus it shows signs of Tech companies only increasing their operation here. The more the residents > the more the home buyers > the less the inventory > the more the purchase price. Thus, buyers who may be waiting for a big dip in the market to get into their homes may be waiting in vain. If you are a potential buyer, don’t delay …. Every time is the perfect time to get into your home. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
I'Mpossible

The Tale of Three Homes Introduction: It was a bright sunny day. The phone rang and there was a lady on the other end. Her name was Smita, she was referred by one of my esteemed clients. She expressed her interest in buying a property in the bay area. During the conversation I came to know that she and her husband Anuj lived in New Jersey, further she informed me she has joined a new company in the bay area and thus she needs to relocate. The relocation will be sponsored by her new employer. The company had a tie-up with a relocation company, which was to take care of her entire relocation. As a policy, Smita was obligated to work with an agent selected by the relocation company. However, she wanted me to work for their home search since they got a strong reference for me. I heard her out completely and told her since I don’t work with any relocation company and I won’t be able to help her out. They can work with the relocation company and since she has been referred by my valued client, I promised to provide all kinds of support and information that may be required. The Take Off After two weeks I got a call from Smita & Anuj. This time they were happy to inform me that all this while they have been continuously exchanging mails with the relocation company stating their choice to work with me. And at last, the relocation company has approved their request to work with me as their agent. The loan agent was to be that of the relocation company. I accepted and we signed a contract. The loan agent had to chase the bank since their property in New Jersey has got multiple offers and was also in contract with one. That should get closed in a couple of days. They were ready for the search but weren’t in a hurry. They wanted the money from the sale proceeds of New jersey property to hit their account first and then to look for a property here in Bay Area. I echoed their views. However, casually they went for 3 open houses and there was one property that they fell in love with. The property had all that they wanted, it had a great neighborhood, great location, and great schools nearby. They came and shared with me their opinion about the house and I had to appreciate their choice. The property is excellent, however, I cautioned them that the price might go beyond their expected price. Understanding the concern, they wanted to back out because, beyond their expected price, they weren’t ready to explore. However, I told them, to let me still try if that can be worked out. So, I contacted the listing agent, she remembered Smita & Anuj well since they met in the open house. After numerous conversations with the listing agent, she finally asked me to come up with the best offer. The seller of this chosen property was an old retired lady. She owned this house for the last 30 yrs and had an emotional attachment to the property. Since she had to move closer to her family owing to her old age, she wanted to sell to a family who would love the property and take care of it. Anuj & Smita’s maximum budget was 1.4 million. While I ran my comparable and worked out the area-based property prices, I found most properties got sold at a higher price. However, there was one property in the complex which was pending and the agent confirmed the selling price is 1.39 Million. So, we concluded to write an offer at 1.38 million so that it is absolutely fine in terms of appraisal and we shall also make a contingency as to the sale of the new jersey property. Before writing the offer, I discussed it with the listing agent and found they have an offer of 1.55 million. I apprised the listing agent that my client isn’t approved for that and they won’t be comfortable making an offer. However, the Listing agent still insisted that I should write an offer for them. Informed her about the contingency and that if the contract got canceled my client gets back 3% of the contingency money and also that the current deal of the New Jersey home is in Escrow and should get closed sooner. We made an offer of 1.38 million with the said contingency. The listing agent asked to provide the contract that the property is in escrow and we did that she also asked if my clients can go up at 1.50. I made it clear that my clients can’t afford that. Something happened and she felt that I could genuinely close the case for which she came and said that she is ready to accept our offer if we can go up to 1.40. We agreed with the contingency in place. And the contract was signed. All of us were happy. The Crosswind Everything was going fine but just a few days later over the weekend, Anuj started panicking, since the New Jersey property’s buyer has extended the close. He also informed that the buyers are not being cooperative and they aren’t letting the reason known for the extension. Real estate in different states has very different norms, back in New Jersey apart from the agent, attorneys are involved. But in the bay area, however, everything is dealt with by the agent only. After a few days, Anuj mentioned that the buyers are backing out and they have sent a cancellation of the contract stating their loan wasn’t approved. I insisted that it must have been a non-contingent offer on the buyer's part and they will hence lose the money. Anuj stated that over there, the lawyers and the relocation company aren’t quite professional and there was no mention of the contingency and the buyers could move out with the deposit money on cancellation of the deal. Hence, it looked prudent to go ahead with the cancellation of this contract because once Anuj & Smita got into the contract our seller too went ahead and got into a contract for buying another property. Both the buyers had a 3% deposit made in the respective properties. Thus, I sent a cancellation and on receiving the cancellation notice the listing agent got disappointed as they thought it was a sure-shot deal. We informed that there is always a chance, however small of things not falling in place and that’s why there was mention of the contingency (The sale was contingent on the sale of the property of the Buyer). We didn’t want to delay the seller to go ahead in search of another buyer so that she doesn’t lose out on her deposit money. For some reason, the listing agent still had trust in me and wanted to give us a couple of days before processing the cancellation. The Thrust I started getting into the nitty gritty of the New Jersey property to find a way out. I inquired about the number of offers and cash offers. Got to understand that they had 15 offers and even all cash offers too. I was wondering why they didn’t accept the all-cash offer? Even why didn’t they find out the source of funds to validate and support before getting into the contract? As information was received that the New Jersey proposed buyer wasn’t ready to share the appraisal, they weren’t supportive enough. It was a complete mess.. a mental turmoil. Their agent in New Jersey also kept trying. We couldn’t communicate with each other due to a conflict of interest. My buyers were having sleepless nights and moved from pillar to post to get things done. I suggested Anuj persuade the agent to have a separate meeting arranged with the proposed buyer’s agent and get to know the concern and fix the issue. That idea worked and the buyers agreed to meet. The property wasn’t appraised properly and it came 65k less of valuation hence the buyers were short on cash. That time Anuj & Smita went ahead and asked at what price were they ready to close. They replied that they can close it at $510,000 instead of $530,000 which was their asking price earlier. Anuj & Smita accepted the deal. Their buyer agreed and tried to close the deal. The Jolt Though it was still undecided if their buyer would be able to close it, since they were already in contact with them, we decided to go ahead with our appraisal before it was too late. So, at once we worked on the appraisal, and the bank ordered the same. Thus, to get the appraisal conducted, I spoke to the listing agent and asked if the seller would be home. On her confirmation, I went to the property and rang the bell. No one opened the door. After waiting for a while, I called the listing agent and was told that none seems to be home. She asked me to take the keys from the realtor's lockbox. Accordingly, I followed the same and opened the door and the alarm went off. It was terrible, the hooter sound. So hurriedly I called the listing agent and told them about the alarm. The agent too panicked and she tried reaching the seller. The seller wasn’t responding and nobody knew the alarm code. Meanwhile, the neighbors came out and started questioning. I informed them that I’m an agent and the listing agent is on the phone. I think the seller forgot to disarm the alarm and we are here to do the appraisal. The alarm was loud. I quickly called the appraiser and asked if he would still like to go in and do the appraisal while this alarm is on. By then the neighbors had already called the cops since they thought it was an intrusion. The appraiser was nice enough to tell he has faced worse and was ready to go in. By then the cops came over. The cops were present along with the neighbors and the alarm was on while the appraiser was appraising the property. All of a sudden, the alarm just stopped and I saw the old lady seller coming down from upstairs. I was shocked and enquired was she present at home? She suddenly broke into tears and divulged to me, that with all these uncertainties, she got into depression with the fear of losing her 3% money and so she took a number of sleeping pills. I didn’t want the cops to get involved and so I informed them that she is doing fine and the cops left. After a while, the appraiser also left. Eventually, the old lady’s brother turned up, he was informed by the listing agent about the whole incident. Once her brother came in, I left. I apprised Anuj of the incident and assured them that I will try my best to get ta proper appraisal however I informed them about how terrible was I feeling for the old lady. She believed in my buyers and made a deposit of 3% which she feared that she might lose and that is causing her depression and anxiety. Finally, after a lot of back-and-forth emails and many trials, the sale of the New Jersey property was closed and Smita & Anuj got their money. We informed the listing agent that we are moving forward and by then the appraisal came and it came 30k more than the offer we made. Which was great news for Smita & Anuj since they already had 30k equity on that. The Air pocket Originally our escrow date was on the 18th, but because of this delay, the lender communicated that they cannot close the deal on the 18th and they will close it on the 27th. I found it fine to go ahead since I had a word with the listing agent that there might be a slight extension of time but we didn’t mention the length of the days it might be allowed. Then when I informed her about the 27th, she said it can’t work since the seller’s loan sanction expires on the 26th, and in this sanction, her interest rate is at 3% and post expiry it will be at 5.6 %. She will no more be eligible for the lower rate of interest, which will create havoc for her. Now we were back to square one. She might just lose her 3%. On our part, the contingency is now irrelevant since the listing agent has the proof of the home being already sold in new jersey and my buyers had received the money. The risk of my clients and their prospective Sellers losing their respective deposit money was looming large. The only way out is to get the lender to disburse the loan faster. The loan agent showed a lot of protocols that need to be followed, for which the stipulated time was necessary. We told her that the money was ready, the appraisal is done, the conditional approval is there and we just need the final approval so why can’t this be done earlier. Meanwhile, I shared the concern with the listing agent and she said she will try to pull some strings and I too tried my hands on it. While doing so I found out that the person we were speaking to wasn’t the loan agent herself but a mediator from the relocation company. Eventually, we found the person who was processing the file. The buyers started following up with her. I kept following up with the line manager and also mailed to the president stating the urgency of the deal. They took action and the file started moving fast. The lady in charge of processing the file understood the situation and worked hard on it. And it was truly one of the historic closes from the lender. We got it processed only in 12 days and closed the deal on the 20th with a nail-biting win. The Landing At last, the deal was closed and all ended well for everyone. They both have moved into their respective homes. HAPPY HOMES -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Understanding Equity

UNDERSTANDING EQUITY All those buyers being frustrated by the bidding war and the above-list sale prices that reigned the last year’s red hot housing market was dismayed with the wait for this year. Unfortunately for them, the new year did not bring any magic. The Seller’s Market Is still going strong Most of the conditions that created last year’s momentous seller’s market are still in place — most notably, supply is still way too low to meet ever-rising demand. The 2022 housing market is tilted heavily towards the sellers — because there aren’t enough homes for sale in the housing market, and this number is getting lower with every passing day. Inventory of existing homes for sale dropped almost 20% in December. The longer the shortage of inventory stretches, the home prices will keep going up, while affordability will continue to further worsen. Last year December saw the lowest inventory and last year itself saw the housing prices skyrocket by nearly 19% —and, while they won’t continue to rise at that unsustainable pace in 2022, they will keep rising. The Millennials and Homes The largest living adult generation in the US is reaching peak home-buying age just as prices soar to record highs. Other than any catastrophic reason taking place, the prices will continue to rise because of the reason that we have the largest buying force in history entering the first-time homebuyer space — the Millennials. The average millennial is around 35 yrs old and the average first-time homebuyer is around 34 years old in this country right now, so the demand is like never before. And thus we have a supply-and-demand issue for the foreseeable future. Thus, the entry of these large numbers of Millennials will create huge demands for first-time home buyers and will continue to exert upward pressure on home prices well into the mid-2020s. No matter what the economy does, the basic need for a home in this generational tidal wave will wash over the housing market for the entire decade to come. The market will be maintained by the demand from these young households despite the minor increase in housing inventory. That dynamic will stall any real relief even when more homes finally do hit the MLS listings. No new construction leads to a price rise The wave of Millennial demand and lower inventory is keeping prices high, but so is a decade of anaemic new construction. The supply of new houses is low because of builder demand. Over the last 12 years, the number of homes built has been far below the average. In fact, in order to keep up with the upcoming Millennial demand that was forthcoming, builders should have been averaging just over a million homes per year since 2010. However, it remained too ambitious for them and they have been far from those numbers for most of 2010 to 2020 or so, and 2021 was still a bit lower than it should have been; 2021 and 2022 are the first two years where they have been close to the number of new builds that were needed in the last 12 years. That sums up to a huge backlog and a steep gap between demand and supply. As prices continue to rise at approximately 4% to 5% every year, they are estimated to be around a 31% to 33% increase over the next five years. On the surface, it appears that help is on the way. Due to persistent supply-chain issues, the construction has been delayed for a close to million housing units that are currently authorized for construction or are under construction. However, we can expect that when these homes are completed in the second half of 22 and will add to inventory, it might skew the market in favor of buyers. The data says 25% of new homes sold in December 2021 were completed homes. 46% were still under construction, while work had yet to start on 29% of homes.” Escaping Soaring Rentals Many buyers who were priced out of the market last year planned to rent until the storm passed. But the storm never passed with rents only going upward and are at historic highs, with prices up by more than 30% in some cities. However, the reality has forced concerned renters back into the housing market, pushing home prices up even further. chaos Apparently, the mortgage rates and rising prices might pose financial issues however the rising rents, which are expected to climb by 7.1%, will be a powerful inducement for many would-be first-time homeowners to buy a home. It’s a testing time — But as Good a Time as Any Most people have seen rising prices and now seeing the rising interest rates and might think it’s a bad time to get into the market. And, as a general rule, home values appreciate over time and inflation ticks up, which implies prices are always rising and thus inflation is growing. So the waiting theory always hurts and never helps. Prices are rising and will continue to do so — but that will be good news for you once you’re all moved in. Since post that you will see the prices are still rising. Even if the market cools later this year or next year, prices aren’t going to drop — they’re just going to rise by less. It will never be cheaper than it is right now. So, there’s no perfect time to buy or sell a property. In the long run, real estate only trends upwards, you can’t time the market and thus it’s never good to wait in order to beat the market. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".
Deceleration

DECELERATION There is a lot of buzz around the word “deceleration of home prices”. What exactly is Deceleration? Experts in the real estate industry use words to define what’s happening in the industry. They might sound similar but there lies a huge difference in their meaning. While Appreciation means there will be a price increase, Acceleration means a fast price increase, Depreciation means a price decrease, likewise, Deceleration means continued appreciation of home price but at a slower pace. Deceleration doesn’t mean a stall or a bust. It only means instead of acceleration there will be a slowdown in the appreciation of home prices. Thus, there will be an ongoing appreciation of home prices but not at the pace it had been in the last 10 years. What contributed to this accelerated growth in home prices? Home prices have not skyrocketed in a single day or a month, there has been a steady price increase for the last 122 consecutive months. Houses have gained value over the last 10 years consistently. But, in the last 2 years, the housing market has seen a dramatic acceleration of price growth. The imbalance between supply and demand has resulted in this accelerated price growth. How are Home Buyers affected by this deceleration? Home shoppers should not mistake this latest slowdown as price relief. Because price growth deceleration doesn't mean the housing market is weakening. In fact, even at a much lower rate of home price growth, it could still be a buyer's nightmare. The mismatch between supply, with inventory still floating around a 40-year low, and demand, driven by the influx of first-time millennial homebuyers, is poised to keep this a seller's market through 2022. Are you considering selling / Buying? For Sellers - You may want to take advantage of record home prices now before things shift. If you are a prospective buyer and it might seem now that you could benefit from waiting for the slow down, however with rising mortgage rates home buyers must estimate the total cost of funds that will be involved in the purchase of their house now and later. Compare the cost of a loan at today's lower interest rate versus a lower home purchase price a few months from now at a potentially higher interest rate. You would end up finding that a lower interest rate will lead to higher savings than a lower purchase price, especially since the rate of deceleration is so slow right now. Moreover, there is no chance of seeing a cascading price decline this time since lending standards have been solid and backed by steady demand. Thus, don’t mistake deceleration for depreciation. Home prices will keep increasing steadily at a slower pace. Don’t wait for a surprise to turn into a nightmare. Take action now. -- "Thanks for reading this article and for a hassle-free experience of purchase/sale of home feel free to get in touch".