Four Tips for Bargain Buyers

Did you see Lacey featured in the front page story on house hunting in Saturday’s Idaho Statesman?  You can find it here.  It’s no surprise to us that the first Saturday front page story of 2016 was about affordable housing – it’s on everyone’s mind these days!  Average rent in Boise is climbing, the fed has announced that interest rates will likely rise in 2016, and these factors make people wonder if they are ready to buy a new home now, and if they could even afford it.  Here’s what you should know if you are looking for a home under $200,000 in the Treasure Valley:

Four Tips

1.  There is a lot more housing under $200,000 than you might think.  The Statesman article mentioned on the front page that only 2% of new build construction is under $200,000.  That is true! But did you know new construction represents only a small fraction of the housing market?  Out of 61 homes our buyers purchased in 2015, only 3 were new construction.  Does that mean buyers under $200,000 have to settle for old properties that need a ton of work?  Not at all – 50% of the homes we sold under the $200,000 mark were built in 1995 or later – hardly fixer uppers.  In 2015, our buyers were able to find homes under $200,000 in every part of the Valley.

Bottom line:  The median (middle) price of homes we found for buyers in 2015 was $206,000.  Half of the homes our buyers chose were near and below(as in: far below) that $200,000 mark.  Any buyer in the current market should be able to find a home that meets their needs at a price that they can afford.

2.  Be ready to move.  New buyers realize quickly that the current market is moving fast and inventory is low.  50% of homes listed in the current market will sell in less than a month.  Why does that matter to you?  When you find your dream home, you may not have time to gather up a down payment, get qualified for a loan, find out if you can break your lease, or even have much time to think on it before someone else already has that house under contract.  Be prepared to move fast when you find a home you love.

3.  Understand the difference between purchase price and monthly payment.  In 2009, the average mortgage rate was 5%.  Today, an average 30 year mortgage has a rate of only 3.85%. In 2009, the monthly payment on a $200,000 home would have been $1074 a month.  Today, that same home would be $937 a month.  That’s a difference of $1644 a year, and $49,320 over the life of the loan.  Those little percentage points do make a difference in what your actual mortgage payment will be, so sit down with a loan officer and find out what types of loans are available to you.  A difference of even one-tenth of a percentage point could save thousands of dollars over the life of a loan.

4.  Enlist help!  A buyers agent that is familiar with the area you would like to buy in comes at no cost to you as a buyer and offers a wealth of market information that can help you with your search.  A good agent will leverage technology to send you new listings that meet your specific criteria.  Experienced agents may also know about listings before they even come to market, giving you the best chance of finding a property before someone else.

Be sure to share your home buying dreams with friends and family as well.   When people know you are looking, they will share information with you about their experiences in the local market.

If you think you might be ready to make the move to home ownership in the Treasure Valley, we want to hear all about it!  Our team is always willing to answer any questions, and we will never spam or stalk you.

Deduct Mortgage Insurance for Tax Savings

Great news! Congress has voted to extend the tax deduction for mortgage insurance (MI) through 2016.
If your mortgage requires mortgage insurance, you can deduct it on your federal income taxes this year and next year.

Who qualifies for the tax deduction?

Borrowers with adjusted gross incomes up to $100,000 can deduct 100% of their borrower-paid MI premiums. Deductions are reduced by 10% for each additional $1,000 of adjusted gross income, phasing out after $109,000.
The threshold for married borrowers filing separately is $50,000 of adjusted gross income per person. Deductions are reduced by 5% for each additional $500 of adjusted gross income, phasing out after $54,500.

FHA to lower cost of mortgage insurance

Source: money.cnn.com By Chris Isidore

In an effort to make owning a home more affordable, the Federal Housing Administration will dramatically cut the costs associated with the mortgages it backs.

Premiums for FHA mortgage insurance, which is designed to protect the agency in case a borrower defaults on a loan, will be cut from 1.35% of a loan’s value to about 0.85%, the White House said in a statement Thursday.

As a result, a typical first-time homebuyer will save $900 a year on their mortgage payments. Existing homeowners who refinance into an FHA loan will see similar savings.

“Too many creditworthy families who can afford — and want to purchase — a home are shut out of homeownership opportunities due to today’s tight lending market,” the White House said.

The White House estimates that the lower premiums will enable up to 250,000 new buyers to purchase a home.

To continue reading click here

Retire to One of These 5 Great Small Cities

source: time.com

Love the culture and excitement of urban life, but loathe the congestion and cost? One of these “Second Cities” could be your first-choice retirement spot.

141215_BPR2013_Boise

Does the thought of retiring to a sleepy beach town or country hamlet bore you silly? Spending your post-work years in a city has plenty of perks, including easy access to the arts, cutting-edge health care, and a diverse set of neighbors. That said, the cons of urban living (like cost) can be daunting.

There is a happy medium. We set out to find places that won’t ding your nest egg with high taxes and nosebleed prices, yet still have great attractions and plenty of your peers. Read on for five affordable small cities (populations of 150,000 to 500,000) you may one day want to call home.

Click Here To See the 5 Best Cities

Residential Housing Continues Up!

image011

image012

image013

Check out the KTVB News interview with Sheila!

source: KTVB.com by Stephanie Zepelin

BOISE – Boise real estate agents are currently reporting the biggest housing boom in the nation.

RE/MAX compared data collected from the Multiple Listing Service (MLS), and it shows that Boise real estate agents saw the greatest increase in sales from January 2013 to January 2014, making it the highest sales increase in the nation.

Boise real estate agent Sheila Smith said she was not surprised by the report, because business has been very busy, and that it just accentuates what’s been going on over the last year. She also says that in January, there were more than a thousand pending home sales.

“People are starting to move, they’re starting to be able to get the value that they want in their homes, so that they don’t’ have to short sell it, they don’t have to foreclose, that sort of thing,” said Smith. “People are finally having those options to upgrade, to move.”

Smith said based on what she’s experience thus far, she thinks February 2014 may beat February of 2013.

“I listed a house this morning and I had over 20 showings and a house in that price range a couple years ago, I would have been lucky to have a showing for the whole week probably,” she said. “So it’s showing a big positive turn that we’re all pretty excited about.”

Smith believes there are many factors behind this positive sales increase including low interest rates, low inventory, still reasonable prices and the rebounding economy.

“The inventory dropped down so low during the big downturn that we just aren’t keeping up,” Smith said. “The builders are scrambling to pick up the pace and keep up with the demand but we’re just behind, so until we can get that volume up again, you’re just going to see, due to basic supply and demand, see an increase in prices in my opinion.”

Smith said this is a great time to be a seller, buyer and real estate agent in this market.

by Stephanie Zepelin

source: KTVB.com

Dodd-Frank Qualified Mortgage Rule

Here is a helpful article sent to us by our ever-helpful lender friend Terry Heffner, Branch manager at Guild Mortgage Company:

Friends:

Only one month into the year, and we are seeing the effects of the new Dodd-Frank Qualified Mortgage Rule, otherwise known as QM-3.

I believe in 2014 it will be imperative that borrowers understand the importance of getting their finances in order, WAY in advance of making decisions to sell, buy, relocate, etc…. Now more than ever, buyers need to specifically understand that the rules have changed. Whether your buyer is self-employed, a physician, or even a rocket scientist, there are real reasons to get the financing piece figured out, sooner rather than later.

This has always been the case, but with new underwriting pressures coming down from all the agencies and filtering down to mortgage lenders, nothing should be left to chance or assumed in the qualifying process. Please remember, many of your borrowers may not have been down this road since PRIOR to 2007, when everything changed. When you add in the most recent retractions and limitations put down by Dodd Frank and the CFPB, the process can be light years from what many buyers remembered it being! Preparing them for the process can make life easier on all parties and lead to smoother transactions! Making sure they are working with a reputable lender, with local processing, underwriting, and funding is a must as well!

That said, we want to offer some tools for you all to make sure you are prepared to emphasize the importance of the pre-qualifying phase, to ALL your buyers. Attached is an article originally put out by Forbes magazine, it accurately describes the detail of assembling a complete mortgage loan file. This is a great article to share with your savvy buyers, and first timers alike. After reading this article, they will understand what to fully expect when applying for a home loan. It’s so important for buyers to be accurately prepared for the process of buying a home. In fact, their satisfaction with their lender, AND Realtor depend largely on how smooth this process goes. Think for a moment of flying on an airplane. If, for instance, the pilot warns you the take-off will be bumpy, whether it is, or it is not, you are typically ok with the take-off. If he does NOT prepare you for a bumpy take off, and you hit massive turbulence on take-off, your flight is ruined and it’s hard to look back on that experience as positive, regardless of the outcome.

Make sure your next deal takes off smooth and lands smooth!