September 23rd, 2015 categories: Market Outlook
Sales of previously owned homes dropped in August by 4.80 percent on an annual basis for the first time in four months; the dip was likely caused by rising home prices. August sales were reported at a rate of 5.31 million; July’s rate was 5.58 million sales of previously owned homes.
Sales of existing homes have risen 6.20 percent year-over-year; stronger labor markets and low mortgage rates were seen as contributing factors. Although economists expect the Federal Reserve to raise its target federal funds rate before year end, home sales are expected to stay strong through 2016. A Fed rate hike would mean that lending rates for consumer credit and mortgage loans would increase.
Analysts noted that July sales of pre-owned homes hit a post-recession high and characterized August’s lower reading as a “hiccup.” Month-to-month readings often reflect volatility caused by transitory influences; analysts typically rely on month-to-month rolling averages to track trends in housing markets.
Home Sales Thwarted by Slim Supply of Available Homes
Low inventories of homes for sale are likely keeping sales of previously owned homes from achieving their potential. In August, there were 2.29 million homes on the market, which represents a 5.20 month supply under current market conditions. August’s volume of available homes was 1.70 percent lower than for August 2014.
The national median sale price for a home was $228,700 in August; this represents a year-over-year increase of 4.70 percent.
First-time Buyers Getting Back in the Game
First-time home buyers accounted for 32 percent of existing home sales in August as compared to a normal reading of 40 percent of existing home sales. Investors purchased 12 percent of pre-owned homes sold in August as compared to a post-recession high of 25 percent. Less competition from investors should allow more owner-occupant buyers to purchase homes without being priced out of bidding wars.
On another positive note, distressed sales of pre-owned homes comprised only 7 percent of sales, this is a strong indication that the tide of post-recession foreclosures is ending.
FHFA House Price Index Also Shows Higher Home Prices
FHFA, the agency that oversees Fannie Mae and Freddie Mac, reported that home prices of homes associated with mortgages owned or backed by the two government-sponsored entities rose by 0.60 percent in July as compared to June’s reading of 0.20 percent. Home prices were up 5.80 percent year-over-year in July, which is 1.10 percent below the peak index reading of 2007 and was near the November 2006 index reading.
Year-over-year home price readings for the nine census divisions were all positive and ranged from + 2.20 percent in the New England division to +9.40 percent in the Mountain division. Month-to month house prices ranged from -1.20 percent in the New England division to +1.60 percent in the Mountain division.
Discussion: Comments Off on National Association of REALTORS – Sales of Pre-Owned Homes Dip|
Buying a new home here in Northern Virginia is an exciting time, but excitement can easily turn to stress if there isn’t enough money to pay the monthly mortgage bill. The added expense can take some time to get used to, but there are ways to make the payments easier, especially in those first few months when money is the tightest.
Prioritize The Mortgage Bill And Pay It Immediately
This may seem like a counterintuitive tip for anybody looking for help making mortgage payments, but it is easily the best one and the one that provides the most trouble for homeowners.
Late mortgage payments come with hefty fees that make it harder and harder to pay the next mortgage bill in full and on time. It’s a slippery slope that can end in foreclosure if the mortgage bills go unpaid for too long.
Don’t Get Carried Away With Household Spending
What’s the first thing most couples do after finally purchasing their first home? If they moved in from a smaller apartment then filling in the empty space will probably be at the top of their list.
Spending sprees are all too common after moving into a new home. There are extra rooms that need to be furnished and extra space that needs to be filled in with a larger television or another sofa.
These purchases will severely limit the mortgage budget and could lead to late payments right from the start for anybody who gets carried away. Put a budget in place for new furniture and stick to it so that there is always money for the mortgage.
Limit Spending In The First Few Months
The biggest change for anybody moving into a new home is the extra expenses they aren’t used to paying. Water, power, heat, air conditioning, internet and cable are all things that could be included when renting and once those bills start coming in it can be alarming.
It doesn’t matter how careful they are, budgeting can take a huge hit if new homeowners are expecting to pay the same as they were in their previous home. Always wait the first few months before making any purchases to get used to the new monthly bills that will be waiting.
Making mortgage payments starts with getting a mortgage you can actually afford. Make sure you consult with a professional who will be able to help you find the best deal and get a mortgage that won’t break the bank each month.
By the way, if you are considering either buying here in the Chantilly or our surrounding area, please know we how we can help. We are always here for you. Contact us.
Discussion: Comments Off on First-Time Home Buyer? 3 Budgeting Tips to Help Make Your Mortgage Payments Easier|
September 15th, 2015 categories: Home Mortgage Tips
It’s amazing that in a year with extremely low mortgage rates being reported around the country, closing costs are up by as much as 6% from the previous year. Part of the reason for this is that the stricter regulations on loans have increased the costs to banks, and they always find a way to pass on new costs to the consumer.
Understanding Third-Party Closing Costs
When closing on a mortgage the borrower will notice a long list of additional fees that they are expected to pay for. These can range from insignificant into the thousands of dollars depending on the state and the deal. When looking at these fees you will notice that some are third-party fees.
This is not out of the ordinary and you are not being taken advantage of. These costs are for services rendered by outside companies at the request of the mortgage lender to make sure everything is in order with the property.
Closing Costs You Can Expect To Pay
Anybody going through the mortgage process for the first time should expect to see several odd sounding terms on the bill. The first is ‘origination’ or ‘processing’ which is the primary fee the lender charges for creating the mortgage.
Other fees include discount points, flood certification, title insurance, credit report and appraisal. These are all necessary for buying a home and should be expected to appear when closing.
The Trick Behind Zero-Closing Cost Mortgages
With closing fees adding up it may seem like a good idea to opt for a mortgage that has absolutely no closing costs if it’s offered. While no money will be required up front, it adds up in the long run.
This is because the lender is making a deal. They agree to pay all the closing costs for the borrower in exchange for a slightly higher interest rate, which will pay out for them over the course of the mortgage.
The amount you can expect to pay really depends on the cost of living and real estate market where you’re buying. A mortgage specialist will be able to talk to you in advance of applying for your mortgage to give you a better idea of what you are looking at paying for closing costs. Contact one today for more information on why you have to pay closing fees and the amount you should be budgeting for.
By the way, if you are considering either buying or selling a home in the Chantilly or surrounding area, please know we how we can help. We are always here for you. Contact us .
Discussion: Comments Off on The Quick and Easy Guide to Understanding the Math Behind Your Mortgage Closing Costs|
September 10th, 2015 categories: Home Buyer Tips
With mortgage bubbles and real estate issues still in recent memory, one might feel that their best option is to buy their next home using cash instead of borrowing the necessary funds. In today’s article we’ll explore the pros and cons of paying cash for that next house or condo.
The Pros Include A Feeling of Complete Ownership
There’s a feeling of pride and joy that comes with owning a home outright. There are several other reasons for paying cash instead of signing on the dotted line and getting and being strapped to a 30-year mortgage. Perhaps the best reason is having 100 percent equity in the home.
The cash will be there to borrow in case of an emergency. Having cash on hand is great if a water pipe bursts or there’s a huge car repair bill. In addition, instead of paying a monthly mortgage, that money could be used to start a college fund, to grow savings or to invest.
And, credit problems wouldn’t be an issue since there wouldn’t be a need to check credit history in the first place. The homeowner may be able to negotiate a better price, which may result in a likelihood of a smoother sale, and attract more prospective buyers.
The Not So Great Reasons To Pay With Cash
Buying a home is one of the largest financial investments a person will make in his or her lifetime.
However, buying a home outright most likely means that a significant percentage of cash will be tied up in the house. Less cash will be on hand for savings, college funds, and emergencies like a plumbing malfunction or an expensive car repair.
While paying in cash may result in a mortgage life, if the property value drops for whatever reason, there’s no purchase protection. For instance, if the market value of a $100,000 home loses 10 percent that will be a loss of $10,000. Take this example and apply it to a mortgage down payment. If the market value falls, there’ll be a loss of $10,000, but the bank would take a loss for the remainder of the property value.
Also, when paying with cash, there is no third party property evaluation to ensure the buyer isn’t overpaying for the home. Banks will send a professional to provide a property evaluation check to verify the correct home value.
Buying a home is a significant personal decision. In today’s tough economy, homeowners are finding ways of cutting back on expenses. Owning a home outright, without the stress of mortgage payments can be extremely liberating. Comminting a large amount of your cash to this large of an investment needs careful planning. Sit down with your trusted mortgage professional today before making the decision to use cash to pay for a home.
By the way, if you are considering either buying or selling a home in the Chantilly or surrounding area, please know we how we can help. We are always here for you. Contact us .
Discussion: Comments Off on The Pros and Cons of Paying Cash When You Buy Your Next Home|
September 8th, 2015 categories: Market Outlook
Last week’s economic news included reports on construction spending, private and public sector employment data and a report from the Fed indicating that any move to raise interest rates may be delayed. The details:
Construction Spending Meets Expectations, Beige Book Indicates Wage Pressures
Analysts said that construction is gaining strength and could soon be the strongest sector of the economy. Construction spending for July met growth expectations of 0.70 percent as compared to June’s reading of 0.10 percent. The Commerce Department reported that this reading translated to a seasonally adjusted annual rate of $1.98 trillion, which was the highest rate of spending in the construction sector since May 2008.
Residential construction spending was up 10.80 percent year-over-year in July, with both single-family and multifamily construction posting double digit gains.
The Federal Reserve issued its Beige Book report last Wednesday, which indicated that wage pressures in many of the 13 Fed districts could cause rising inflation, which the Fed has cited as a component in any decision to raise the federal funds rate. The Fed has set a benchmark of 2.0 percent inflation as an indication for raising rates, but doesn’t expect to see this reading in the short term.
Higher wages increase consumers’ discretionary spending, which would contribute to more hiring and increasing demand for goods and services.
Mortgage Rates, Weekly Jobless Claims Higher
Freddie Mac reported that average mortgage rates rose across the board last week. The rate for a 30-year fixed rate mortgage rose by five basis points to 3.89 percent; the rate for a 15-year fixed rate mortgage wash higher by three basis points and the rate for a 5/1 adjustable rate mortgage also rose by three basis points to 2.93 percent. Average discount points were unchanged at 0.60 for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.
Weekly jobless claims rose to 282,000 new claims against last week’s reading of 270,000 new claims and expectations of 275,000 new jobless claims. While this was the highest reading for new jobless claims in since late June, the reading for new weekly jobless claims has remained below the 300,000 benchmark for the last six months.
The four-week rolling average of new jobless claims rose by 3250 new claims to an average of 275,500 new claims. Analysts said that layoffs are declining and that workers who lose their jobs are finding new employment quickly.
Continuing jobless claims fell by 9000 to a reading of 2.26 million for the week that ended August 22.
ADP Employment Rises, Non-Farm Payrolls, National Unemployment Rate Fall
Private sector payrolls increased by 190,000 jobs in August as compared to July’s reading of 170,000 jobs according to ADP. This supports the trend of stronger hiring seen by economists in recent weeks. The government reported that Non-farm payrolls, which include public and private sector jobs, fell to 173,000 jobs against July’s reading of 245,000 jobs.
The Commerce Department reported that the national unemployment rate dipped to 5.10 percent in August against expected reading of 5.20 percent and July’s reading of 5.30 percent. The declining unemployment rate further supports economic growth and stronger labor markets.
This week’s economic reports include job openings, the usual weekly reports on new jobless claims and mortgage rates and a report on consumer sentiment.
Discussion: Comments Off on What’s Ahead For Mortgage Rates This Week – September 8, 2015|
September 3rd, 2015 categories: Home Buyer Tips
For those looking for a home in the Chantilly or surrounding area. You’ve found it: A large new home for your family. It’s in the area that you love, with the perfect architectural style and lots of room for entertaining guests. It would have been perfect for you, but there’s only one problem – you’re not quite ready to pay the price the seller is asking for. You’ll have to put in an offer below the seller’s asking price – a risky move.
Although you will be rolling the dice with an offer below asking price, there are ways that you can increase the likelihood that your offer will be successful. Before you submit your offer, use these three strategies to make it more appealing.
Work Out Other Terms In The Seller’s Favor
If you’re going to ask for a lower selling price, it helps to show that you’re willing to compromise on other terms – that way, you come across as a reasonable human being and not a bargain hunter. By offering to give the seller the better deal on other terms, you’re showing that you want to close a sale – and the seller will see you making an effort to come to an agreement and respond in kind.
There are several ways to do this. When you submit your offer, see if you can negotiate an arrangement that has you paying the closing costs or a closing date that works better for the seller. Or, offer to make the down payment in cash or give the seller a larger deposit.
Arm Yourself With Facts To Make Your Case
If the home you want to buy is priced well above fair market value, you can easily use that to your advantage and turn it into a benefit for the seller. First, you’ll want to look up property values for similar homes in the area. You should also investigate how long it takes homes in that area to sell and the difference between the average asking and average selling price in the area.
If you can show the seller that their asking price is above their neighborhood’s average sale price or that their home has been on the market longer than the average home (or both), then you can make a strong case for a lower offer.
Submitting an offer below asking price can work, but it’s not something that should simply be done on a whim. It takes careful planning and a great strategy to actually win a bid if you’re coming in below asking price.
By the way, if you are considering buying (or selling) a home in the Chantilly or surrounding area, please know we how we can help. We are always here for you. Contact us .
Discussion: Comments Off on How to Submit an Offer Below the Asking Price Without Spooking the Seller|
September 2nd, 2015 categories: Home Mortgage Tips
Title insurance is one of the few types of protection policies available to homebuyers and one that is often overlooked because of its optional nature.
Because title insurance is purchased simultaneously with the home, it can be very easy to forego when looked at alongside all the additional fees that are associated with purchasing property.
This is typicaly not advisable, as title insurance is one of the smartest forms of protection a homeowner can buy. Here are just three reasons why every purchaser should get title insurance.
It’s The Best Protection Against Fraud
Title insurance protects the owner of a home from any claim made against their property, whether or not they are responsible. These include unpaid mortgage balances on the home, an improper foreclosure or any form of real estate fraud perpetrated by the seller.
Fraud is more prevalent now than ever before and has started to gain momentum in real estate as well. Forgeries are easier to create in the electronic age and criminals take advantage of today’s ‘do-it-yourself’ attitude to sell property they don’t actually own to unsuspecting victims.
The Insurer Performs An Exhaustive Title Search
Countless records are now made public online for low one-time payments to access them. But does anybody really know what they should be looking for? Title insurers are experts at finding anything suspicious with a home and researching exhaustively to make sure everything about the transaction is legitimate.
And if it’s not, the insurance still covers the buyer for any losses incurred if they are ordered out of their new home should a claim be made against it. Then they will research the claim to make sure it isn’t a fraudulent one.
Title Insurance Is A One-Time Fee
Although it is a large fee, title insurance only needs to be paid for once. Unlike other insurance policies that are either monthly or annually, title insurance is a one-time fee that is acquired at the time of closing. Most mortgage lenders require that their title insurance policy is paid for by the borrower anyway, so it’s not a giant leap to take out your own policy the same time.
Title insurance will also protect against mortgage fraud or any unpaid mortgages the home already has. Although title insurance is strongly recommended, it is a good idea to speak with a professional about it so that any questions you have may be answered.
Discussion: Comments Off on 3 Reasons Why the Cost of Title Insurance is Worth the Investment|
August 31st, 2015 categories: Market Outlook
Last week’s economic news included several reports related to housing. The Case-Shiller 20-City Home Price Index for June rose to 4.50 percent as compared to May’s reading of 4.40 percent. Denver, Colorado was the only city to post double-digit year-over-year growth. FHFA also released its House Price Index for June. Home prices for properties associated with mortgages owned or backed by Fannie Mae and Freddie Mac rose at a year-over-year rate of 5.60 percent in June as compared to May’s reading of 5.70 percent.
New Home Sales, Pending Home Sales Rise in July
Commerce Department data revealed that new home sales increased in July to a year-over-year reading of 507,000 against expectations of 510,000 new home sales and June’s revised reading of 481,000 new homes sold. The original reading for June was 482,000 new homes sold. New home sales provided a strong indicator of recovering housing markets as July’s reading was 25 percent higher than it was one year ago.
Pending home sales moved into positive territory in July after June’s reading of -1.80 percent. Pending home sales for July grew by 0.50 percent. Pending home sales are an indicator of future closings, so this is good news as the peak buying and selling season wanes.
The national median home price rose to $285,900 in July, which was two percent higher year-over-year.
Mortgage Rates, New Unemployment Claims Fall
Mortgage rates fell across the board last week. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage fell by none basis points to 3.8r percent; the rate for a 15-year fixed rate mortgage also fell by nine basis points to 3.06 percent. The average rate for a 5/1 adjustable rate mortgage was four basis points lower at 2.90 percent. Discount points for fixed rate mortgages were unchanged at an average of 0.60 percent and fell from an average of 0.50 percent to 0.40 percent for 5/1 adjustable rate mortgages.
Weekly jobless claims were also lower last week with 271,000 new claims filed as compared to expectations of 271,000 new claims filed and the previous week’s reading of 277,000 new claims filed. Last week’s reading was the 25th consecutive week of new jobless claims readings under the benchmark of 300,000 new claims filed; this is the longest stretch for new jobless claims under the 300,000 new claims benchmark in more than fifteen years.
New jobless claims rose by 1000 new claims to a seasonally adjusted average of 272,500 according to the four-week average. Analysts note that the four week average smooths out volatility that can occur with week-to-week readings.
This week’s scheduled economic reports include the Federal Reserve’s Beige Book report, ADP and the federal Non-farm Payrolls reports. The national unemployment rate will be released along with regularly scheduled reports on mortgage rates and new jobless claims.
Discussion: Comments Off on What’s Ahead For Mortgage Rates This Week – August 31, 2015|
August 28th, 2015 categories: Around The Home
Newer properties here in Chantilly may be infused with built-in designer touches that give them an instant sense of luxury, but older homes may lack many of these built-in features. Whether buying or renovating an older property, many people are interested in learning how to instill modern luxury in older property. The good news is that this is easier than it sounds, and it can be accomplished by following a few simple tips.
Make Thoughtful Upgrades
It may not be cost-effective or reasonable to upgrade the entire space with an extensive renovation, but making a few thoughtful upgrades can yield fabulous results. The light fixtures, faucets and hardware in the space should receive attention first, and homeowners should choose a modern finish that goes well with the rest of the home. If funds permit, consider upgrading the counter tops, sinks and bathtubs to further add luxury and modern style to the style.
Choose The Right Fabrics
When decorating the home, it is important to choose fabrics that speak to the luxury that is desired in the space. While some affordable materials have a luxurious look, it may be necessary to invest in premium materials like leather or upgraded upholstery in some areas to achieve the desired results. Think about the use of color, and layer fabrics for a truly upscale, finished look in the space.
Take Advantage Of Antique Charm
Most older homes have a special antique charm, and homeowners may have better results when working with this charm rather than trying to remove it from the space. Antiques can be incorporated with modern pieces to create a historic, classic or even rustic look to a home. Consider which aspects of the existing décor to highlight, such as gorgeous wood floors or an antique banister, and celebrate these areas while also including modern fabrics and other decorative touches to create the luxurious, modern look that is desired.
Decorating an older home can be challenging for many reasons, but it is possible to instill a sense of modern luxury into the space without a complete renovation. Some smaller remodeling efforts may be needed for the best results, and they can be incorporated with these tips to provide a lovely look that homeowners can truly fall in love with. Those who are thinking about fully renovating their older home may want to speak with their trusted mortgage professional for more information about refinancing their mortgage.
By the way, if you are considering either buying or selling a home in the Chantilly or surrounding area, please know we how we can help. We are always here for you. Contact us.
Discussion: Comments Off on How to Design a Modern, Luxurious Home Inside of an Older Piece of Real Estate|
August 27th, 2015 categories: Home Mortgage Tips
Buying a new home is one of the biggest steps that a person can take. Prior to taking out a home loan, you want to ensure that you get the best interest rate for your mortgage. The lower your rate is, the less you’ll pay over the long run. In today’s blog post we’ll share three key tips that will help you get the best possible mortgage rate.
Tip 1: Look For Special Programs
The Federal Housing Administration, better known as the FHA, offers a program designed for those looking at buying homes. This program lets applicants apply for loans and get access to better interest rates. The FHA guarantees that loan and agrees to pay off the funds if the borrower defaults.
The USDA can also help those interested in purchasing homes in rural areas. This can include farmland, ranches and homes located in smaller towns across the country. The USDA developed this program as a way to increase the population in certain areas.
Other programs are available through HUD, especially for those who never owned a home before. HUD is intended to help new homeowners buy homes in underdeveloped and up-and-coming areas. There are also special programs open for those who work as teachers, firefighters and in other positions that help the community at large.
Tip 2: Request Quotes
Not requesting quotes is one of the biggest mistakes that new shoppers make. Did you know that your interest rate can drop by a few percentage points or more just by comparison shopping? Lenders use different criteria when determining who can borrow money and the amount charged, and comparing those quotes can help you get the best fit for your situation.
Tip 3: Improve Your Credit Before Applying
Speaking of credit, one of the biggest factors that determines your interest rate is your credit score. A credit score of 700 or higher will get you a better interest rate than if you had a score of 650 or less. Improving your score before applying is one of the best ways to get a good rate.
Paying down your debt is an easy way to improve your score, but you can also pay your bills on time to get a better score. To learn more about new home financing, improving your credit score and interest rates available to you, be sure to contact your trusted mortgage professional.
Discussion: Comments Off on Buying a New Home? Three Tips on How to Get the Best Mortgage Rate|