Roxy's Real Estate News Blog

First Steps to Buying a Home: A Comprehensive Guide for 2025

noreply@blogger.com (Roxy's Real Estate News ) — Wed, 13 Aug 2025 15:59:00 -0700

Embarking on the journey of homeownership is a significant milestone.

The process can seem daunting, especially with the ever-evolving real estate market. As we move into 2025, understanding the first steps and preparing diligently is more crucial than ever. This guide provides a comprehensive overview of what you need to know to confidently navigate the home buying process 2025 and secure your future residence. A couple standing in front of their new home with a 'Sold' sign, looking happy and smiling.

Introduction to Home Buying in 2025 Purchasing a home represents a substantial financial undertaking, and doing so successfully requires careful planning and preparation. Before diving into listings and open houses, it's essential to understand the current state of the real estate market and how it might affect your buying power. Current Trends in the Real Estate Market The real estate market in 2025 is shaped by various factors, including economic conditions, interest rates, and demographic shifts. Recent data suggests a continued demand for housing, particularly in suburban and emerging urban areas.

While some markets are experiencing price stabilization after periods of rapid growth, others remain highly competitive. Industry analysts predict a moderate increase in housing prices nationally, influenced by ongoing supply chain challenges affecting new construction and renovation projects. Interest rates, while subject to change, are projected to remain relatively stable compared to previous peaks, providing a degree of predictability for potential buyers. Staying informed about these real estate market trends 2025 will empower you to make informed decisions.

Why Now Might Be a Good Time to Buy Despite market fluctuations, 2025 presents potential opportunities for homebuyers. While interest rates play a vital role, various housing programs and incentives may be available to first-time homebuyers and other eligible individuals. These programs can provide down payment assistance, tax credits, or lower interest rates, making homeownership more accessible. Furthermore, the anticipated stabilization of housing prices in some regions offers a window of opportunity to negotiate favorable terms.

Waiting for prices to drop significantly might not be the best strategy, as increased demand could eventually drive prices back up. By carefully evaluating your financial situation and taking advantage of available resources, buying a home in 2025 could be a sound investment. Assessing Your Readiness to Buy a Home Before you start browsing listings, it's critical to honestly evaluate your readiness to take on the responsibilities of homeownership.

This involves assessing your financial stability, understanding credit requirements, and creating a realistic budget. Financial Stability and Budgeting A thorough assessment of your finances is paramount. Begin by examining your income, savings, and debts. Lenders typically look for a stable income history and a reasonable debt-to-income (DTI) ratio, which is the percentage of your gross monthly income that goes toward paying debts. A DTI of 43% or lower is generally considered favorable. Building a budget is also essential. Consider all the costs associated with homeownership, including mortgage payments (principal, interest, taxes, and insurance), property taxes, homeowners insurance, potential homeowner association (HOA) fees, and maintenance expenses. Aim to save enough for a down payment of at least 5-20% of the home's purchase price, depending on the type of loan you're seeking.

Financial planning for home buying is a crucial step often overlooked. Understanding Credit Requirements Your credit score plays a significant role in determining your eligibility for a mortgage and the interest rate you'll receive. Lenders use your credit history to assess your creditworthiness and the risk of lending you money. A higher credit score generally translates to lower interest rates and more favorable loan terms. Before applying for a mortgage, check your credit report for any errors or inaccuracies and take steps to improve your score if necessary. Paying bills on time, reducing your credit card balances, and avoiding new debt can all positively impact your credit score. Aim for a credit score of 740 or higher to qualify for the best interest rates.

The Home Buying Process Once you've assessed your readiness, you can begin the home buying process. This involves obtaining mortgage preapproval, choosing a real estate agent, and searching for the right home. Getting Preapproved for a Mortgage Mortgage preapproval is a crucial step that demonstrates to sellers that you're a serious buyer and have the financial means to purchase their home. It involves submitting your financial information to a lender, who will then evaluate your creditworthiness and determine the maximum loan amount you qualify for.

To get preapproved, you'll typically need to provide documentation such as your income statements (W-2s, pay stubs), bank statements, tax returns, and credit history. The lender will then issue a preapproval letter, which is valid for a specific period, usually 60-90 days. Getting preapproved for a mortgage early in the process allows you to shop for homes with confidence and negotiate effectively. Choosing the Right Real Estate Agent A skilled real estate agent can be an invaluable asset throughout the home buying process. They can provide expert guidance, negotiate on your behalf, and help you navigate the complexities of the real estate market. When choosing an agent, look for someone who is experienced, knowledgeable about the local market, and responsive to your needs. Ask for referrals from friends, family, or colleagues, and interview several agents before making a decision. A good agent will listen to your priorities, understand your budget, and work tirelessly to find the right home for you.

House Hunting Tips Finding the right home requires a combination of research, patience, and a clear understanding of your needs and wants. Start by defining your priorities, such as location, size, features, and budget. Consider factors like proximity to work, schools, amenities, and transportation. Utilize online resources to search for homes in your desired areas. Attend open houses and schedule private showings to get a feel for different properties. Be prepared to compromise on some of your wants, as it's rare to find a home that perfectly meets all your criteria. Focus on the essential features and potential for future improvements.

Closing the Deal Once you've found the perfect home, it's time to make an offer and negotiate with the seller. This process involves several steps, including the home inspection, appraisal, and finalizing the mortgage. Making an Offer and Negotiating When making an offer, consider the current market conditions, the condition of the property, and your budget. Your real estate agent can help you determine a fair offer price and advise you on the terms of the contract. Be prepared to negotiate with the seller, as they may counter your offer. Common negotiation points include the purchase price, closing date, contingencies, and repairs. Remain flexible and willing to compromise to reach an agreement that works for both parties.

Home Inspection and Appraisal After your offer is accepted, it's essential to conduct a home inspection and appraisal. A home inspection is a thorough examination of the property's structure, systems, and components, performed by a qualified inspector. The inspection will identify any potential problems or defects that may need to be addressed. An appraisal is an assessment of the property's value, performed by a licensed appraiser. The lender requires an appraisal to ensure that the property is worth the loan amount. If the appraisal comes in lower than the purchase price, you may need to renegotiate with the seller or come up with additional funds. The importance of home inspections should not be underestimated.

Finalizing the Mortgage and Closing Once the home inspection and appraisal are complete, you can finalize your mortgage and prepare for closing. This involves working with your lender to gather all the necessary documentation and ensure that the loan is approved. Before closing, conduct a final walkthrough of the property to ensure that it's in the agreed-upon condition.

At the closing, you'll sign all the legal documents, pay the closing costs, and receive the keys to your new home. It's a good idea to have a checklist for the final walkthrough to ensure nothing is missed. Conclusion Buying a home is a complex but rewarding experience. By understanding the current real estate market, assessing your financial readiness, and following the steps outlined in this guide, you can navigate the home buying process with confidence. Remember to work with qualified professionals, such as a real estate agent and a mortgage lender, to ensure a smooth and successful transaction. First-time homebuyers guide details often require consultation with an expert.

Preparing for Homeownership Transitioning into homeownership involves more than just moving in. Take time to familiarize yourself with your new home and its systems. Create a maintenance schedule to address routine tasks, such as cleaning gutters, changing air filters, and inspecting the roof. Establish a budget for ongoing maintenance and repairs to avoid unexpected expenses. Building a strong relationship with your neighbors can also enhance your homeownership experience. Participate in community events, introduce yourself to your neighbors, and be a responsible and considerate homeowner.

These actions contribute to a positive and welcoming neighborhood environment. Buying a home is a monumental decision that requires careful planning and expertise. At Cascade Lending LLC, we understand the complexities of the mortgage process and are dedicated to providing personalized support and tailored solutions. If you're feeling overwhelmed or unsure where to start, I encourage you to contact us for a consultation. Our team of experienced Loan Officers and Commercial Consultants can guide you through every step, from mortgage preapproval to closing, ensuring you secure the ideal loan for your unique circumstances. We're committed to building long-term relationships and delivering exceptional service, helping you achieve your homeownership goals with confidence.

Roxy Redenbaugh, Broker/Owner

Cascade Lending, LLC

Residential and Commercial

Cell: 503-800-1655

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Investing in Short-Term Rental Properties: A Lucrative Opportunity

noreply@blogger.com (Roxy's Real Estate News ) — Thu, 20 Jun 2024 08:00:00 -0700

Are you looking to enter the investment market with minimal down payment? Investing in short-term rental properties like Airbnb or Vrbo could be your ticket to profitable returns. Here’s how you can get started with as little as a 15% down payment and ensure your investment is financially sound with the Debt Service Coverage Ratio (DSCR).

Benefits of Short-Term Rental Investments:

Higher Income Potential: Earn more compared to traditional long-term rentals.
Flexibility: Use the property for personal use when not rented out.
Diversification: Spread your investment across different locations for reduced risk.

Understanding DSCR:

The Debt Service Coverage Ratio (DSCR) is a critical metric used by lenders to assess your ability to cover loan payments. It’s calculated by dividing your property’s net operating income (NOI) by its annual debt obligations (principal and interest). Lenders typically look for a DSCR of 1.0% or higher, ensuring you have sufficient income to cover your mortgage payments comfortably.

How DSCR Helps You Qualify:

Financial Stability: Demonstrates your ability to generate enough income from the property.
Lower Risk: Reduces the likelihood of default, making lenders more inclined to approve your loan.
Investment Confidence: Provides reassurance that your investment is financially viable.

Partner with Cascade Lending, LLC:

Cascade Lending, LLC specializes in financing investment properties for short-term rentals. We offer competitive rates and flexible terms to help you acquire that vacation home or investment property you’ve always wanted. Our expert team is dedicated to guiding you through the financing process, ensuring a smooth and efficient transaction.

Start Your Investment Journey Today:

With as little as a 15% down payment and a solid understanding of DSCR, you can enter the lucrative market of short-term rentals with confidence. Whether you’re looking to generate passive income or expand your investment portfolio, now is the time to take advantage of this opportunity.

Contact Cascade Lending, LLC today to explore your financing options and turn your investment dreams into reality. Let’s work together to make your short-term rental investment a success!

I enjoy the process and working with new or seasoned investors, Thank you for visiting my blog, I hope you found this information helpful. If you have questions please call me or leave me a question in the comments.

Thanks again for stopping by.

Roxy Redenbaugh, Broker/Owner

Cascade Lending, LLC

Residential and Commercial

Cell: 503-800-1655

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Investing in Real Estate with FHA Financing: A Path to Your First Investment Property

noreply@blogger.com (Roxy's Real Estate News ) — Tue, 18 Jun 2024 09:00:00 -0700

Are you considering stepping into the world of real estate investment but unsure where to start? FHA financing with a 3.5% down payment might be your ideal entry point. This method allows you to purchase a 2-4 unit multifamily home, live in one unit, and rent out the others, leveraging rental income to help you qualify for the loan. Let’s explore why this strategy could be the perfect way to kickstart your investment journey.

Pros of Buying Real Estate Investment Property with FHA Financing:

Low Down Payment: The ability to buy with just 3.5% down payment makes real estate investment accessible, especially for first-time buyers. This reduces the upfront capital required, freeing up funds for other investments or renovations.
Multifamily Property Benefits: Investing in a 2-4 unit property allows you to diversify your income streams by renting out the additional units. This not only offsets your mortgage but can potentially generate positive cash flow.
Owner-Occupancy Requirement: FHA loans require you to live in one of the units, which can be advantageous. It allows you to qualify for more favorable financing terms typically reserved for owner-occupants, such as lower interest rates and longer repayment periods.
Rental Income Consideration: Unlike traditional mortgages, FHA loans allow you to include rental income from the other units when calculating your ability to repay the loan. This makes it easier to qualify as the rental income can supplement your own earnings.
Easier Qualification Criteria: FHA loans have more flexible credit score requirements and debt-to-income ratios compared to conventional loans, making them accessible to a broader range of borrowers. This is particularly beneficial for those who might not qualify for conventional financing.
Down Payment Assistance Programs: For those who may struggle with the 3.5% down payment, there are down payment assistance programs available. These programs can help cover the initial investment, further lowering the barrier to entry into real estate investing.
Potential for Appreciation: Real estate historically appreciates over time, offering the potential for wealth accumulation through property value appreciation. Multifamily properties, in particular, can benefit from both rental income and property appreciation.
Tax Advantages: Real estate investments come with various tax benefits, including deductions for mortgage interest, property taxes, and depreciation. These deductions can help reduce your overall tax liability, increasing your net income from the property.
Build Equity: With each mortgage payment, you build equity in the property. This equity can be leveraged for future investments or used to upgrade existing properties, further enhancing their value.

Cascade Lending, LLC: Your Partner in Real Estate Investment

At Cascade Lending, LLC, we specialize in facilitating FHA financing for real estate investments. Our expertise in navigating FHA guidelines and securing down payment assistance ensures a smooth and straightforward process for first-time investors. Whether you're looking to buy your first multifamily property or expand your investment portfolio, we are committed to providing personalized service and financial solutions tailored to your needs.

In conclusion, investing in real estate through FHA financing with a 3.5% down payment offers a strategic approach for first-time investors. The combination of low initial investment, rental income potential, and favorable financing terms makes it an attractive option to build wealth and financial stability. If you're ready to take the next step towards owning your first investment property, contact Cascade Lending, LLC today to explore your options and start your real estate investment journey with confidence.

Thank you for visiting by blog, I hope you will leave a comment and let me know if this information was helpful. I am available if you have any further questions or would like to learn more.

Roxy Redenbaugh, Broker/Owner

Cascade Lending, LLC

Residential and Commercial

Cell: 503-800-1655

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

FHA Financing: The Backbone of Home Loans

noreply@blogger.com (Roxy's Real Estate News ) — Mon, 17 Jun 2024 07:00:00 -0700

FHA Financing: The Backbone of Home Loans

In the realm of home financing, FHA (Federal Housing Administration) loans have long served as a cornerstone, providing accessible paths to homeownership for a diverse range of borrowers. This blog post explores the significance of FHA financing, its benefits, recent statistics from 2023, and the role it plays in helping first-time buyers and others achieve their homeownership dreams.

Importance of FHA Financing

1. Accessibility:

Wide Eligibility: FHA loans are accessible to borrowers with lower credit scores and higher debt-to-income ratios compared to conventional loans.
Lower Down Payment: Requires as little as 3.5% down payment, making homeownership more feasible for those with limited savings.

2. Stability:

Government Backing: FHA loans are insured by the federal government, providing stability and confidence to lenders, which often translates to more favorable terms for borrowers.
Fixed-Rate Options: Offers both fixed-rate and adjustable-rate mortgage (ARM) options, providing flexibility based on borrower preferences and market conditions.

2023 Statistics

In 2023, FHA loans continued to play a significant role in the mortgage market:

According to industry reports, FHA loans constituted approximately 16% of all new mortgages funded in the United States.
This underscores their substantial impact in facilitating homeownership for a diverse demographic, including first-time buyers and individuals with moderate incomes.

Benefits of FHA Financing

1. Lower Credit Requirements:

Allows borrowers with credit scores as low as 580 to qualify, with a down payment of 3.5%. For those with scores between 500-579, a 10% down payment may be required.

2. Down Payment Assistance:

Grants and Programs: FHA loans can be paired with various down payment assistance programs, helping borrowers cover upfront costs and reduce financial strain.
Gift Funds: Allows for down payment assistance from family members or other eligible sources, facilitating easier access to homeownership.

3. Flexibility in Qualifying Criteria:

Considers factors beyond credit scores, such as employment history and income stability, providing more comprehensive assessments of borrower eligibility.

Cascade Lending, LLC and FHA Loans

Cascade Lending, LLC understands the importance of FHA financing in making homeownership achievable for many. As a reputable lender specializing in FHA loans, Cascade Lending, LLC offers:

Expert guidance on navigating FHA loan requirements and processes.
Competitive rates and terms tailored to individual financial situations.
Commitment to supporting borrowers throughout their homeownership journey, from application to closing.

In conclusion, FHA financing remains a crucial avenue for prospective homeowners, particularly first-time buyers and those with limited financial resources. Its accessibility, government backing, and flexible terms make it a preferred choice for many seeking to achieve the milestone of owning a home. With options for down payment assistance and a range of eligibility criteria, FHA loans continue to pave the way towards sustainable and inclusive homeownership opportunities in the United States.

Thank you for visiting my blog, please leave a comment so I know you were here!

Roxy Redenbaugh, Broker/Owner

Cascade Lending, LLC

Residential and Commercial

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Investing in Property: Pros and Cons, Landlordship vs. Fix and Flip

noreply@blogger.com (Roxy's Real Estate News ) — Sat, 15 Jun 2024 15:30:00 -0700

Investing in Property: Pros and Cons, Landlordship vs. Fix and Flip

Investing in real estate offers various avenues, each with distinct advantages and challenges. Two primary strategies stand out: becoming a landlord or engaging in fix-and-flip projects. Here, we'll explore these options, discuss the types of real estate that yield the best returns, delve into Return on Investment (ROI) calculations, and touch upon different loan types, including DSCR, Hard Money short-term loans, and full-doc long-term loans.

Landlordship vs. Fix and Flip

1. Landlordship: Becoming a landlord involves purchasing property to lease to tenants. Pros include:

Steady Income: Rental payments can provide a regular cash flow.
Property Appreciation: Real estate often appreciates over time, potentially increasing your investment's value.
Tax Advantages: Deductions for mortgage interest, property taxes, and depreciation can reduce taxable income.

However, cons include:

Tenant Management: Dealing with tenants, repairs, and vacancies can be time-consuming.
Market Risks: Economic downturns or local market fluctuations can impact rental income and property values.

2. Fix and Flip: Fix-and-flip involves purchasing distressed properties, renovating them, and selling at a profit. Pros include:

Quick Returns: Profits can be realized within a shorter timeframe compared to rental income.
Control Over Project: You can directly influence renovation decisions to maximize profit potential.

Cons may include:

Market Timing: Fluctuations in the real estate market can affect selling prices.
Capital Intensive: Requires upfront capital for purchasing and renovating properties.

Types of Real Estate for Investment

Investors often find success in:

Residential Properties: Single-family homes or multi-unit buildings.
Commercial Properties: Office buildings, retail spaces, or warehouses.
Mixed-Use Properties: Combining residential and commercial spaces.

The best type depends on factors like location, market trends, and investor goals.

Return on Investment (ROI)

ROI calculation involves: $\text{ROI} = \left( \frac{\text{Net Profit}}{\text{Total Investment}} \right) \times 100\%$

Include costs such as purchase price, renovation expenses, and holding costs to accurately assess profitability.

Loan Types

1. Debt-Service Coverage Ratio (DSCR) Loans:

Evaluates a property's ability to cover its debt payments with rental income.
Typically used for rental properties.

2. Hard Money (Short-Term) vs. Full-Doc (Long-Term) Loans:

Hard Money Loans: Short-term, high-interest loans secured by the property's value rather than the borrower's creditworthiness. Ideal for fix-and-flip projects due to quick approval and funding.
Full-Doc Loans: Long-term loans requiring extensive documentation of income, assets, and credit history. Lower interest rates and longer terms make them suitable for long-term investments like landlordship.

Cascade Lending, LLC

Cascade Lending, LLC offers specialized lending services tailored to real estate investors, including:

Flexible loan terms.
Competitive rates.
Expertise in DSCR and hard money loans, supporting diverse investment strategies.

In conclusion, whether you choose to be a landlord or engage in fix-and-flip projects depends on your financial goals, risk tolerance, and time commitment. Understanding ROI calculations and selecting the right loan type are crucial for maximizing profitability in real estate investments.

Thank you for visiting my blog, be sure to leave a comment, so I know you were here! I've love to hear from you.

Roxy Redenbaugh, Broker/Owner

Cascade Lending, LLC

Residential and Commercial

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Understanding the VA Home Loan: A Path to Building a Home

noreply@blogger.com (Roxy's Real Estate News ) — Fri, 14 Jun 2024 14:42:00 -0700

Understanding the VA Home Loan: A Path to Building a Home

For many veterans and active-duty service members, the VA (Veterans Affairs) home loan program offers a unique opportunity to achieve homeownership. Established to support veterans in securing housing, this program not only facilitates the purchase of existing homes but also extends to constructing a new home on eligible properties.

How Does a VA Home Loan Work?

The VA home loan program is backed by the U.S. Department of Veterans Affairs, providing lenders with a guarantee that encourages them to offer favorable terms to eligible veterans and service members. Key features include:

No Down Payment Requirement: One of the most significant advantages of a VA loan is the ability to purchase a home without a down payment, provided the purchase price does not exceed the property's appraised value.
Competitive Interest Rates: VA loans typically offer competitive interest rates compared to conventional loans, which can result in lower monthly payments and overall savings.
No Private Mortgage Insurance (PMI): Unlike many conventional loans, VA loans do not require private mortgage insurance, which can substantially reduce monthly payments.
Flexible Eligibility Criteria: Eligibility is primarily determined by military service history, including length of service and discharge status. Spouses of service members who died in the line of duty or as a result of a service-related disability may also qualify.

Using a VA Loan to Build a Home

While VA loans are commonly associated with purchasing existing homes, they can also be used to finance new construction under certain conditions:

Qualified Builders: VA loans for new construction require a licensed builder with a proven track record of constructing homes.
VA Appraisal and Inspections: The VA imposes strict guidelines and inspections during the construction process to ensure compliance with both VA and local building codes.
Construction Loan Phase: When using a VA loan for new construction, the process typically involves an initial construction loan phase, where funds are disbursed to the builder as construction progresses. Once the home is complete, the loan is converted into a permanent mortgage.

Steps to Utilize a VA Loan for Building a Home

Eligibility Verification: Confirm your eligibility for a VA loan by obtaining a Certificate of Eligibility (COE) from the VA.
Choose a Qualified Builder: Select a builder approved by the VA and finalize construction plans.
Loan Application: Apply for a VA construction loan through a VA-approved lender, providing detailed construction plans, cost estimates, and other required documentation.
Construction Phase: During construction, the VA will conduct inspections to ensure compliance with building codes and quality standards.
Conversion to Permanent Mortgage: Once construction is complete, the loan transitions into a traditional VA mortgage, providing long-term financing for your new home.

Benefits of Building with a VA Loan

Customization: Building a home allows for customization to suit your needs and preferences, ensuring the home meets your lifestyle requirements.
Lower Upfront Costs: With no down payment requirement and no need for private mortgage insurance, a VA loan can significantly reduce upfront costs compared to other financing options.
Long-Term Savings: Competitive interest rates and the absence of PMI can result in long-term financial savings over the life of the loan.

Conclusion

The VA home loan program stands as a testament to the nation's commitment to supporting veterans and service members in achieving homeownership. By understanding how VA loans work and the opportunity they provide for building a home, veterans can navigate the path to constructing their dream home with confidence and financial security.

For those eligible for a VA loan who wish to build rather than buy, exploring the nuances of VA construction loans can open doors to a tailored living space that meets both personal and practical needs.

Thank you for visiting my blog, I hope you will leave a comment and let me know if this information was helpful.

Roxy Redenbaugh, Broker/Owner

Cascade Lending, LLC

Residential and Commercial

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

What is mandatory to fix after a home inspection? It depends on three factors

noreply@blogger.com (Roxy's Real Estate News ) — Tue, 7 Mar 2023 09:53:00 -0800

Inspect what you expect, or so the saying goes. More than ever, even in these days of multiple
offers and rising home prices, a home inspection should not be optional no matter what the terms of the sale. Jumping into a purchase this large should scream disclosure so that you can sign on the final dotted line with both eyes open, whether selling or buying a home.

After all, who wants to find out after moving into their dream home that the furnace is on the fritz or that termites have taken up residence in the attic? In case you're thinking of waiving the home inspection contingency, you should also be aware that some lenders require a home inspection as a necessary step before they finalize your home loan.

First, a home inspection checklist is made up, outlining how the inspector might have found damage or other causes of concern. He or she will be quite thorough, offering a snapshot of the home's condition at the time of inspection, pointing out everything from major fixes to minor cosmetic issues. Some of these may be representative of the home's, age, location, and how well the previous owners maintained the home.

But what are considered mandatory fixes? Here are the major areas that spell this out for you — (1) the terms of your purchase agreement (2) what the lender requires, and (3) local laws, codes, or regulations.

Most purchase agreements contain a home inspection contingency that allows the homebuyer to back out of the deal should the inspection turn up major issues. For example, if the inspection shows significant damage to the home's roof, the homebuyer could request the seller to replace the roof, or use the expense to ask for a lower sale price. The home seller can decide to appease the homebuyer by lowering their price or fixing the roof and proceed with the sale of the home, or choose to sell the home 'as is' and reject any improvements. It all becomes a point of negotiation after the original offer and can change the terms of the agreement.

As for the lender (particularly those that offer government loans), mortgages are only approved for homes that meet their standards for safety, livability, and mandate that certain issues be addressed before closing. The appraiser will inspect the property and assess the home's value before a deal can be made. If comparable homes in the neighborhood do not support the home's selling price, it could be problematic. But for inspection purposes, they will look for things such as ungrounded electrical outlets, the presence of lead-based paint, mold, a leaking roof, contaminated water, a non-working or inefficient septic system, or the lack of sources for heat. If any of these problems present themselves, the homebuyer and seller can negotiate who will pay for which repairs and the deal can either continue or go dead.

Some states require the sellers to provide a report from a licensed pest control company showing that the home is free of termites. In others, if a home inspector finds home improvements, the seller made not to code, or without securing a permit, the local building official will hold the seller liable, requiring them to bring the improvements up to code and pay increased permitting fees.

Because of all this, it has become increasingly popular for sellers, in preparing their homes for sale, to consider having a home inspection done before listing it. Getting caught off-guard can be very disconcerting, so getting ahead of it permits the possibility of a smoother closing process.

Thank you for visiting my blog, please leave a question or comment and come back again soon.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

The new build purchase, part 3: the new home orientation

noreply@blogger.com (Roxy's Real Estate News ) — Sat, 4 Feb 2023 11:45:00 -0800

There are few things more exciting than standing at the front door of the shiny new home that is about to be yours, ready to experience what is called the “new home orientation” — the homebuilder version of the “walk-through.” Unlike the tour of a “used” home, the builder’s job here is to familiarize you with how to keep your house in tip-top shape, how to use all its systems, and what to expect if something needs attention during the builder’s new home warranty period.

Dena Kouremetis, a former CA-based new home sales manager and subsequent trainer in the new homes industry, talks about the importance of this watershed event. “This interaction with the building superintendent is a chance to not only explain the features of your new home; he or she is usually also pretty proud of their work, having orchestrated the building of this structure from the dirt to sticks to drywall to the final touch of paint,” she says. “Hundreds of hands, nails and pieces of wood have taken part in building this home that will soon become yours. This is the time to grab your smart phone and ask questions as well as record all of the advice you are given to keep it pristine, as well as what to do if you encounter any issues.”

Kouremetis explains that the purpose of this meeting is not to find unfinished or sloppy work (it’s a production home, so it’s not an exact science), which can be documented and fixed over the next few months, although this is a good time to bring it up. The point is to instruct you all you need to know, what can happen if you do things that void the new home warranty, and what the builder is responsible for if you do. That’s why they prefer to conduct this tour only to the owners. If you do insist on having your Realtor or other family members along, be mindful of how it can hold up the process and request that they hold their own questions or observations until the end of the tour.

With electrical, plumbing, and HVAC systems becoming more sophisticated than ever, it’s vital that you hang on to every shred of paper the superintendent gives you, placing it somewhere accessible once you move in. These may also be available online, so make a note of their URLs as well. Pamphlets on each appliance, each system, all the warranty cards you should fill out ASAP once you take ownership— they should all be there for you to quickly refer to. In addition, read your new home warranty carefully to see what voids its terms. Should you rip out the flooring the builder originally installed and an issue develops under the foundation of the structure, the builder will not be liable to replace your flooring after the issue is repaired, even though they may offer you an allowance that equals the cost of the flooring they originally installed.

“And it’s up to the homeowners to instruct their family members of what can and can’t be flushed down a toilet,” says Kouremetis, who suggests they sit down and explain to everyone who lives there the importance of being careful with the new home’s systems and surfaces. “Each appliance and each installation carries a certain drop-dead date for being covered,” she says, and advises that you mark on your calendar when each of these are, since reporting problems with any of them after those dates will find you paying for any repairs yourself. “Don’t bother to make up some story about how something broke. Abuse of any of these systems is readily noticed by the builder’s warranty personnel,” she adds.

All builders offer a “punch list” period. That means that a badly cut piece of baseboard, cabinets installed crookedly, doors that don’t close properly and slopped over or missing paint are place on a schedule for repair over the subsequent months after you move in. The builder has an entire department dedicated to after-the-sale issues, so ask the person in charge of this department how you go about contacting them once these things are discovered. And remember — you attract more bees with honey than with vinegar. If you’re gracious to building personnel, they just may move you up on their list of things to do.

Thank you for visiting my blog, please leave a question or comment and come back again soon.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Navigating the upgrade game when buying a newly-built home: a series for the new home buyer (part 2)

noreply@blogger.com (Roxy's Real Estate News ) — Tue, 24 Jan 2023 09:12:00 -0800

Now that we’ve looked at how the design center options/upgrades process works when buying anewly constructed home, it’s time to study which of the builder’s offerings are prudent to pay extra for, which ones can sit on the shelf for a while, as well as offer some food for thought as this “production line” home is being built.

Your home’s exterior

Former new home sales manager/sales manager Dena Kouremetis offers her expertise from the other side of the fence, saying, “If the builder offers you a choice of exterior elevations, such as siding, stucco, brick accents, river rock, etc., and up-charges for them, you may want to consider them seriously.” She goes on to say the maintenance of some surfaces mean regular investments (such as painting siding), whereas easy-care surfaces (such as stucco or brick) stay fairly timeless. Paying an extra $20k for an upgraded exterior, however, might find you in a quandary as to its value in the big scheme of things if this home is NOT your “forever” home. If you do plan to be there for a number of decades, however, she says passing up the upgraded elevation might find you having regrets. And if you have ideas to alter them yourself? “Whatever exterior options are offered, however, have been pre-approved by the city. Changing the exterior elevation of your home on your own after the fact may find you facing fines.”

“As for the remainder of the outside of your house, most builders include a minimum of landscaping to the front yard, but always hope you will improve upon it, depending on the neighborhood rules governing the look of your home,” says Kouremetis. “If the builder has an option to sod and add a larger or covered patio to your backyard space, however, compare the costs with outside contractors. There is certainly a beauty to your backyard being just as move-in-ready as the interior of your home. Living with dirt in the backyard for an extended period of time is simply a pain.”

Electrical and plumbing options

Homebuilders in some states are required to install energy-saving features in their new builds — amenities such as hot water on demand (to save water) but most of these also save you money on your monthly water bills. Solar as well. ENERGY STAR appliances are now the norm and not the exception to it, and may be required in most states. If the builder offers other electrical or plumbing options, however, this is the time to think long and hard about it. Kouremetis asks, “How handy would it be to have extra exterior weatherproof outlets for holiday lights and outdoor appliances/future kitchen? This is the time to do it, and chances are good that whatever they charge for things like surround-sound wiring in the ceiling, plumbing for a laundry sink, or recessed or canned lights in some areas will not be much different from having a contractor come in, charging time, materials and labor.” She warns against making quick decisions to have the builder install things like entire sound systems through the builder. “It can be a real crap shoot. Whenever a builder deals with an outside company it contracts with to offer a product in your home, they usually charge a hefty premium. This is the time to do your online homework.”

Flooring

There are a number of ways to look at this important element for your home. The amount of time you plan to live there, whether you have dogs and kids (promising lots of wear and tear), and your own sense of aesthetics all come into play. Many families with young children decide not to invest in an upgraded flooring, opting instead to change it out to a better grade of carpeting or to hardwood or tile later on, when the kids are older. Others decide they want bullet-proof flooring from the get-go. The builder will finish your house with the flooring you choose (in most states, lenders require flooring to be in place before COE), but before you make that selection, get a bid from a flooring company and compare. Should you decide to go outside, the best time to have the flooring installed by the builder replaced is immediately after close of escrow. As for the brand new carpeting or vinyl being torn out at that point, get a handle on either selling it to a private party (perhaps an apartment landlord/owner) or donating it to Habitat for Humanity or another charitable cause.

Window coverings

A builder’s design center usually offers a window covering package — at the minimum some blinds to cover windows throughout the house. The neighborhood rules (Covenants, Conditions, and Restrictions) may forbid sheets up on windows immediately upon move in. So compare the price the builder offers for this. If going fancier, such as with cellular shades, drapery, or plantation shutters, again — look around. For both flooring and window coverings, permitting the builder to install these items also means they may be covered by the new home warranty for a period of time. That might mean peace of mind as well.

Lighting fixtures

Chances are good that there will be some “standard” fixtures included in the sales price, such as an entry and dining room chandelier, recessed lights in hallways, bathroom fixtures, and lighting/ceiling fans in some rooms. But you will be asked if you wish to upgrade these items as well. “Light fixtures are a highly personal choice, but don’t pass up the opportunity to add recessed lights to rooms where they are lacking, such as bedrooms,” says Kouremetis. “Either add your own dimmers or look into how much extra dimmers cost through the builder. You’ll thank yourself later. The design center consultant should be able to show you a blueprint of the lighting locations in the house, and it’s before sheetrock goes up that your decisions should be made. Don’t snooze on this one.”

Paint

You may not have much (or any) choice in interior or exterior paint colors. If the builder offers choices, however, take it as a bonus. They may even offer accent wall colors. Just know that whatever kind of paint job is done by the builder, it becomes part of your new home warranty — a “punch list” item the builder will return to repair/redo if not done perfectly.

A buyer’s obligations/rights to the home during construction

If you are ordering up a home starting with dirt/sticks in the ground, there will be cut-off times for many of the decisions you’ll have to make. A production home is like a car on an assembly line. Once certain parts have been put into place, it costs a lot of time and money to backtrack and add things to the product. Same with construction. A building superintendent has a schedule to follow, with homes required to be move-in ready by a certain date. After that date, the finished-but-unoccupied home becomes the builder’s liability (a regular mortgage payment). So PAY ATTENTION to cut-off times for your electrical, architectural, flooring, and plumbing options. Some must happen before the foundation/slab is poured, others before drywall is installed, and others before cabinets and trim are started.

As a word to the wise, Kouremetis adds, “Just because you have placed numerous deposits on this home-to-be does not mean you have a right to be in or on the property before you own it, and it definitely means you can’t do any of your own installations (paint, flooring, appliances or even grandma’s antique crystal chandelier) before you hear the words ‘You’re on record,’ and someone hands you the keys. “The builder is liable for anything that happens on their property before move-in, so even if your building superintendent says it’s okay to walk around your home being built, wear the hard hats he offers you happily and don’t sneak around after hours. He does not have to permit you to be there at all.”

Afterthoughts

Your smartphone camera will become your best friend. Whether you are mulling over your choices at the design center, watching the walls go up or even catching some sloppy work before you have your new home orientation (the equivalent of a resale “walk-through”), let your phone document whatever prompts questions on your part. “No question is too silly or dumb,” says Kouremetis. “Don’t think just because you don’t know what you don’t know, the builder would not be both eager and happy to explain every step of the process. While it’s their job, it will become your home.”

I hope this was useful.

Thank you for visiting my blog, please leave a question or comment and come back again soon.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

TBWS

Navigating the upgrade game when buying a newly-built home: a series for the new home buyer

noreply@blogger.com (Roxy's Real Estate News ) — Fri, 20 Jan 2023 11:26:00 -0800

You’ve been looking in earnest at resale homes, but on a tour of the outskirts of town, you see something off in the distance. A series of signs and banners are everywhere, leading Hansel-and-Gretel style to a brand spanking new set of stunning, lit-up model homes. The curiosity is killing you, so you take all the requisite turns to reach the model home sales office. There, you are greeted by a friendly salesperson (usually a licensed real estate agent) who works exclusively on behalf of the builder.

You are handed a brochure and a price sheet, but pay little attention to it at first. Instead, you stare down at a structure in the middle of the sales office that appears to be a miniature layout of the neighborhood. Called the builder’s “top” (topographical) board, it contains pre-planned cul-de-sacs, a space for a neighborhood park, a future school — it’s all there. Now it’s time to walk through the model homes. There is that new home aroma of new furniture, paint and flooring, uncovered windows letting every bit of light in, and accessories and artwork you know you can’t buy during a quick trip to HomeGoods.

You are unwittingly being romanced at every turn, making you feel like a kid in a candy store. Former CA-based new home sales trainer Dena Kouremetis offers her advice to buyers in this series on the ins and outs of the upgrade options offered to new home buyers. Questions include (1) Should you settle for only the amenities the builder offers in the base sales price and then add your own upgrades later on? (2) Why/when might it be prudent to use the upgrades offered by the builder’s design center? (3) Should you compare the costs of everything you can get at Home Depot or Lowe’s for similar items before signing on the dotted line? (4) What amenities are ALWAYS best to get on your own, after close of escrow?

But first, let’s cover the topic of how this upgrade/design center thing works. The homebuilder offers its 2415 square foot single-level, 3 bedroom + office/den, 3 bath home for $530,000. Included in that price is either a carpeting option throughout most of the home (except for the entry, laundry, bathrooms and kitchen) or LVF (luxury plank vinyl flooring) throughout. The included appliances, windows, interior paint, lighting fixtures and standard electrical and plumbing features are all listed on the builder’s slick brochure in your hand. In order to physically find any of the standard items within the model home, it may take several more visits, but they are usually somewhere in one or more of the models.

As you walk through the prototype of the home that interests you, there are disclaimer tags on walls and items saying things like “I’m included!” But most of them read, “Available feature!” or even one that explains that the case goods and furniture throughout the place is not available at all, since it was a staging company that placed it all there. You’re attracted to the 8-burner Wolf range, would die for the built-in SubZero refrigerator, salivate over the wine fridge, love the idea of a whole house speaker system, and have only dreamed of the telescoping folding glass doors that open up the entire family room to the backyard covered patio (which in the model includes an outdoor fireplace). They’ve got you baited for sure. As you can imagine, the builder’s design center is no doubt a gleaming theme park of upgrade possibilities. The stage is set, however, and now you’ve got a visual handle on what it might be like to live in a home like this.

Once you commit to the house itself (you’ve studied the area, the commute, the schools, the builder’s reputation, etc), the salesperson’s next duty (if you’re not paying cash) is to make sure you are fully pre-approved for the mortgage. Knowing you may add some upgrades here and there, they try to qualify you for the max amount — certainly one over and above the sales price. They explain that for each $1,000 increment you add to the price of the house for upgrades, it adds X amount of estimated dollars to the monthly payment you’ll make. That extra $100 per month to your payment (depending on the interest rates at the time) may only amount to a month’s worth of Starbucks runs in the big scheme of things. But for your future home it means hardwood floors as well as upgraded appliances -- that is, <i> after</i> the builder credits you for the amount their (included) flooring allowance would have covered —at their cost, not at retail. After all, although they buy in bulk, they do intend to sell it to you for a profit.

So now your mind is at work. If amortizing the amount of your upgrades over the life of the loan, how much might that cost you by the time you either sell your house or pay it off? Might it have been more prudent to just live with vinyl on the floor, cook on the standard 6-burner stove for a while and look into fancier versions later? At that point, would you pay cash for it, would you be financing it all through a credit card, or refinancing when it became cost-effective to do so?

Your new home salesperson may not cover all these ‘what ifs' with you,” says Kouremetis. “They don’t want to pry too much into your financial situation when you begin making decisions regarding upgrades. But they may have some suggestions for how to proceed if you prefer NOT to add upgrades through the builder, such as paying for the house to be PREPARED to receive extra electrical and plumbing options later on. They may also offer some food for thought on how it may be wiser to go through their design center for some of the options.”

You’ve been looking in earnest at resale homes, but on a tour of the outskirts of town, you see something off in the distance. A series of signs and banners are everywhere, leading Hansel-and-Gretel style to a brand spanking new set of stunning, lit-up model homes. The curiosity is killing you, so you take all the requisite turns to reach the model home sales office. There, you are greeted by a friendly salesperson (usually a licensed real estate agent) who works exclusively on behalf of the builder.

I hope this was useful.

Thank you for visiting my blog, please leave a question or comment and come back again soon.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Can I Get A Commercial Loan With 20% or Less Down

noreply@blogger.com (Roxy's Real Estate News ) — Mon, 29 Aug 2022 14:02:00 -0700

Question: "I have about 10–15% to put down, but I’m afraid they won’t qualify me because I don’t have the 30%. I also want to use the properties leases as additional income to help swing my DTI in my favor. Is there a way to accomplish this? Or should I just focus on getting a cheaper property with cash?"

In the commercial world, it’s tough to buy with less than 20% down. BUT not impossible.

Commercial loans are appraised and underwritten differently from smaller residential income properties (1–4 units). Lenders do not use debt-to-income ratios (DTI).

Both the appraisal and the underwriting will be done largely on capitalization of income. First, let’s define a capitalization ("cap") rate for those readers who may not be aware of the term.

When we evaluate income property, we first reconstruct the income and expenses. We’ll look at scheduled market rental income and subtract a reasonable market vacancy factor. The resulting number is called Effective Gross Income. Next, we’ll reconstruct operating income for the property. We will include a management fee, even if one is not currently being charged, and standardized factors for repairs and replacements. We’ll subtract those expenses from the Effective Gross Income to get Net Operating Income (NOI). The NOI does not include depreciation or debt service.

We calculate the cap rate by dividing the NOI by the property’s value and expressing the quotient as a percentage. Thus, a $1 million property with $80,000 NOI would have a cap rate of 8.0% (80,000 / 1,000,000 = .08 = 8.0%).

An appraiser will use a market cap rate for the type of building he is appraising and work backward, dividing the NOI by the cap rate. A building with NOI of $100,000 in an area where the typical cap rate is 7.5% would have a derived value of $1,333,333 (100,000 / .075 = 1,333,333).

The lender will base their loan partly on "debt service coverage." This means that they’ll expect a certain amount of cash flow left over after the debt service. They will use the calculated NOI to arrive at that number. If their guidelines specify debt service coverage of 1.2, that means that our building with NOI of $100,000 would support annual debt service of $83,333 (100,000 / 1.2 = 83,333). Working backward from the annual debt service and using the loan terms available, we’ll get the size of the loan (with some possible limitations).

Annual debt service of $83,333 represents a monthly payment of $6,944. If the lender is willing to make a loan with a 5% interest rate amortized over 25 years, you’d have a loan of $1,188,000 (trust me on this. I know things). So working backward to check our work, we divide the $83,333 annual debt service into our NOI of $100,000, and we get 1.2.

These kinds of loans are almost always "portfolio" loans. This means that the lender will not sell them on the secondary market (Fannie Mae and Freddie Mac are among the largest buyers of residential mortgages), but will hang onto them. Because of this, they have the flexibility to set their guidelines. They will typically do two additional things with their loans: they will extract a personal guarantee, and they will have a maximum loan-to-value ratio (LTV) for their loans. If their maximum LTV is 80% (which is typical), the loan we’ve just calculated would be good for a property valued at $1,485,000 (1,188,000 / .80 = 1,485.000). If the property you are considering has a price lower than that, let’s say $1,300,000, the lender is likely to approve you for $1,040,000–80% of the purchase price. If your personal financials look good, some lenders may be willing to extend more credit. They might look at "cross-collateralization," for example. This means that they would encumber other properties you own to secure the excess. They may also make the loan "recourse." This means that in the event of foreclosure, they would have the right to come after you personally for any shortfall if the property should not bring in enough cash at sale to clear the mortgage and costs of foreclosure. This personal guarantee can make refinancing or selling those other properties difficult.

The primary things to keep in mind with commercial financing is that the lender is looking very hard at the economic viability of the property when approving a loan.

I hope this was useful.

Thank you for visiting my blog, please leave a question or comment and come back again soon.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

MAKING A DEAL ON REPAIRS AFTER THE HOME INSPECTION

noreply@blogger.com (Roxy's Real Estate News ) — Fri, 8 Jul 2022 09:16:00 -0700

For everything we hear about outdoor air quality, few homebuyers seem to be overly concerned about the air they may breathe inside the home they’ve just submitted a purchase offer. Most Americans will spend at least one-third of their time every day inside their house. So if the air they breathe during that huge chunk of their lives is unhealthy, it has the potential to be a really big deal.

According to a Redfin article by Dylan Clark, many indoor air quality problems are difficult to inspect for or gauge accurately because they lack easily definable metrics. “This leaves uncertainty regarding things like mold, formaldehyde, pets, rodents and other peculiar odors, he says. “One indoor air quality question that comes up a lot on older homes, which is a bit more precise to measure, is asbestos.” That means if you're a homebuyer, homeowner or remodeler, it’s wise to learn all there is to know about asbestos.

Asbestos is a mineral that naturally occurs in the earth. Because it contains properties that make it an excellent and inexpensive fire retardant, it was added to a number of building products back in the 1940s all the way through the 1970s, including insulation, floor tiles, ceiling tiles, heating duct tape, boiler pipes, cement siding, textured ceilings, and even the glue used under flooring.

The reason you hear remodelers on HGTV shows shriek with horror when they find asbestos materials during a house renovation, however, is because it can not only be toxic when the abrasive fibers get inhaled into the lungs causing damage to lung tissue, but remediation can also be a big hit to their renovation budgets.

So how do you determine if asbestos is present in your house? For one, you can hire an industrial hygienist or an environmental lab to perform an evaluation of the house, according to Clark. “These contractors should follow a thorough testing protocol and will often take more than a dozen samples from the building. Once you have the results, you should know what materials contain asbestos, and most labs will also provide a protocol for remediating (safely removing) these materials. You now have data.”

Then there question of what to do. In older homes many of the materials that contain asbestos are already encapsulated and can’t become airborne, so you can rest easy — nothing needs to be done. “The biggest risk posed by asbestos in buildings is during a remodel or renovation to an old house,” says Clark. “This is when the asbestos-containing materials get damaged and aerosolized and people working or living in the house are at risk of exposure.”

State laws often mandate that homeowners and their contractors test for asbestos before any construction or renovation project if a house was built prior to 1977, when the substance became banned for public health reasons. Remediation must be done by licensed abatement contractors before starting demolition work.

Homebuyers tend not to test for asbestos as part of their due diligence when buying a house for a number of reasons, including no immediate plans for renovations. If there are no real plans to potentially disturb the asbestos products a house may contain, you may to test the house later when you have work done. But if you are the new owner of an older home who instantly plans to take down interior walls, rip out old drywall, lath, and plaster, you need to plan a budget for lead and asbestos identification and remediation. “If you have time to do this evaluation before buying the house, that is great,” says Clark. “The more data up front, the better.” Often, however, home buyers have short timeframes to complete their inspections.

It should be noted that home inspectors generally are not certified for asbestos inspections. While many home inspectors report on the presence of building materials that are likely to contain asbestos, their findings should not be confused with a comprehensive asbestos identification inspection.

Thank you for visiting my blog, please leave a comment or question.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Source: Redfin, TBWS

FHA Loans And First-time Homebuyers

noreply@blogger.com (Roxy's Real Estate News ) — Thu, 7 Jul 2022 12:45:00 -0700

Question: Are FHA loans only for first-time home buyers?

Not at all. The Federal Housing Administration was formed in 1934 to provide financing for low- and moderate-income buyers, but there is no maximum income for buyers or requirement that they are first-time buyers.

FHA has become a useful choice for many buyers whose credit situation might make conventional financing more difficult and more expensive.

FHA loans today require a minimum down payment and mortgage insurance for the life of the loan. Although it is not a first-time buyer program, it is very popular with these buyers, partly because many communities offer down payment and closing cost assistance for qualified first-timers, whose income falls beneath certain limits.

FHA is also an excellent choice for those buyers whose credit scores are at the lower end of the scale. Whereas conventional loans require a minimum FICO score of 620, FHA accepts scores much lower. Contact your lender for specific terms or to apply for an FHA loan.

FHA does have a potential disadvantage, and that is the way mortgage insurance (MI) is handled. Lenders require mortgage insurance to limit their risk any time the loan is for more than 80% of the property’s value. With a conventional loan, a borrower can ask the lender to remove the MI once they can demonstrate that the loan is less than 80% of the property’s value. With FHA, the mortgage insurance will be in place for the life of the loan. Borrowers pay MI in two ways: there is an up-front premium that’s added to the loan and a monthly premium that is also added to the payment.

FHA loan calculations can be a little tricky to explain in this medium so you should absolutely reach out to a trusted, licensed lender like ME, to better understand or apply for an FHA loan.

Good Luck and thank you for visiting my blog! Please reach out or leave a comment or question.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Hedging Your Bets On Your Very First Flip

noreply@blogger.com (Roxy's Real Estate News ) — Thu, 21 Oct 2021 11:16:00 -0700

So you think you’ve read enough books, gone to enough seminars, watched enough HGTV, finally
got an offer accepted on an investment property and are now waiting for it to close. What should you expect? Smooth sailing or a nightmare? Is there an in-between?

So let's goes over the possible outcomes, it’s good to talk to others who have been there/done that. And even though none of it will insulate you from reality, here are a few ways things can go.

Best case scenario is, of course, that it goes swimmingly, making you think you’ve got a handle on this investor/flipper thing. Here's an example of a couple who had great success with their first purchase. No major issues, making them confident that investing in real estate is much less complicated than they originally thought. But the couple had also done their homework. They took the time to speak to other flippers, studied how to evaluate the value of a property, took notes of what damages or potential expense to look for, and learned how to evaluate the housing market. They also got wisdom from others on the importance of how to communicate with their clients. If you do all these things, “Then you stand a much better chance of having a really smooth, profitable first purchase. Of course, a lot needs to be learned on the job, and you’re bound to make mistakes here and there, but this ‘pre-deal education’ will go a long way.”

The key in the beginning, anyway, is to be involved in EVERY aspect of the investment — from knowing the numbers to knowing the area to analyzing the repair costs. Don’t leave any of this in the hands of others. “Successful closes depend, in large part, on your commitment to, become the expert in your market,

Many investors buy too high; get their rehab estimates wrong; miss something in the walk-through that’s going to cost them later. “Profit on your first deal is by no means a guarantee. However, your first close can make you money. So let’s say you’ve done your homework and educated yourself on the process, how to price and value things, and you’re ready to go. Crunch time. Your accepted offer is accompanied in your mind by a certain profit figure when all is said and done. First home buying experience was exciting, fun and stressful all at the same time. What was supposed to be an 8 month flip with a six-figure return turned out to be a 1.5-year flip and with a mediocre return. “We learned very quickly that it’s good to trust people, but you must VERIFY that their information is true. We are talking permit and contractor delays, hiring the wrong people and finding more repairs than originally anticipated. Hopefully there is enough equity in the deal to cover any such short comings.

Takeaways are the following:

Learn by doing, not just reading about it. Know that ANYTHING can happen.
Profit is never guaranteed (at least not what you may have originally had in mind).
Gather a solid, trustworthy team around you.
Make sure the information the homeowner is giving you is true. Don’t take their word for it, even if they had good intentions.

Have a heart. You are buying what was once someone’s home. Treat them and the deal with care and compassion. Closing a profitable deal was only half the excitement. The other half is coming through for your seller. To them, it may be much more than a transaction.

Thank you for visiting my blog, I hope you enjoy it and learned a thing or two.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Using Real Estate As A Vehicle For Wealth

noreply@blogger.com (Roxy's Real Estate News ) — Fri, 1 Oct 2021 15:39:00 -0700

For many of , our most significant investment and largest profits in life are due to having bought a house — something that acts as a de facto bank account, grows in equity and provides shelter all at once. But what if we want to use real estate as a money-making opportunity instead?

Real estate has, of course, made many millionaires. The Wall Street Journal recently reported how more than 80% of borrowers who refinanced in the third quarter chose the “cash out” option, withdrawing $14.6B in equity out of their homes, according to government-sponsored mortgage corporation Freddie Mac. Now, many are finding their homes to be a tappable source of wealth. “Home equity is the big pot of gold,” said Sam Khater, the chief economist at Freddie Mac.

It’s not hard to see why many have successfully made money buying and selling real estate because of the diverse ways to grow wealth with real estate investments. Creating wealth through real estate is common among the most successful investors, whether they’re house flippers, residential home landlords, or large apartment complex owners.

Knowledge is, of course, key. Real estate investors always seem to know more than those around them — what drives markets, how to time market cycles, and which things to watch out for. “They are much more likely to recognize shifting markets before others do and are prepared to take advantage of these opportunities when they present themselves. The very best never stop learning, and real estate is no exception. Apart from websites where investors can learn, network, and find solutions to their problems, some also collect books written on how to invest in real estate, reading them over and over again. Developing the ability to analyze a property for cash flow as well as recognizing an under-valued property when you see one. Then develop a basic understanding for estimating rehab costs along with the various pieces at play when it comes to owning rental property.

“The more you know about real estate investing, the less fear you’ll have. Overcoming fear is one of the best things you can learn to do if you want to carve out a successful career for yourself in real estate.

Patience is also a virtue. That it may sound simple, but that’s not always the case. “When it comes to real estate investing, there is a lot of pressure on you to move and move fast. The best deals go quick, and allowing projects to run past the agreed upon timeline can be expensive. Investors are constantly facing pressures to do more, do it faster, and do it cheaper.”

The best investors know when they need to run fast and when they need to stop and wait to see how things develop. Patience can take several forms when it comes to real estate investing. Learning to recognize areas where you’ll need to practice it can save you from a lot of expensive mistakes.

Understanding market cycles are also of vital importance. Top investors zig when everyone else zags. They are fearful when others are greedy and greedy when others are fearful. Waiting for the market to slow down, or crash even, can require more intestinal fortitude but it is also a much better time to be picking up assets.”

Learning how to transform a property, how to be efficient, and how to be keenly focused and how to develop important relationships, go to BiggerPockets.com, where you can get tips like this for free. Top notch investors see ways to add value to properties without spending more money than they have to. For those with the vision to bring it about, there can be big rewards for those who buy the ugly duckling and turn it into the beautiful swan.

Thank you for visiting my blog, please leave a comment or question and come back again!

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Source: Wall Street Journal

Can You Get A Commercial Loan with just 10-15% Percent Down?

noreply@blogger.com (Roxy's Real Estate News ) — Sun, 19 Sep 2021 15:14:00 -0700

In the commercial world, it’s tough to buy with less than 20% down.

Commercial loans are appraised and underwritten differently from smaller residential income properties (1–4 units). Lenders do not use debt-to-income ratios (DTI).

Both the appraisal and the underwriting will be done largely on capitalization of income. First, let’s define a capitalization ("cap") rate for those readers who may not be aware of the term.

When we evaluate income property, we first reconstruct the income and expenses. We’ll look at scheduled market rental income and subtract a reasonable market vacancy factor. The resulting number is called Effective Gross Income. Next, we’ll reconstruct operating income for the property. We will include a management fee, even if one is not currently being charged, and standardized factors for repairs and replacements. We’ll subtract those expenses from the Effective Gross Income to get Net Operating Income (NOI). The NOI does not include depreciation or debt service.

We calculate the cap rate by dividing the NOI by the property’s value and expressing the quotient as a percentage. Thus, a $1 million property with $80,000 NOI would have a cap rate of 8.0% (80,000 / 1,000,000 = .08 = 8.0%).

An appraiser will use a market cap rate for the type of building he is appraising and work backward, dividing the NOI by the cap rate. A building with NOI of $100,000 in an area where the typical cap rate is 7.5% would have a derived value of $1,333,333 (100,000 / .075 = 1,333,333).

The lender will base their loan partly on "debt service coverage." This means that they’ll expect a certain amount of cash flow left over after the debt service. They will use the calculated NOI to arrive at that number. If their guidelines specify debt service coverage of 1.2, that means that our building with NOI of $100,000 would support annual debt service of $83,333 (100,000 / 1.2 = 83,333). Working backward from the annual debt service and using the loan terms available, we’ll get the size of the loan (with some possible limitations).

Annual debt service of $83,333 represents a monthly payment of $6,944. If the lender is willing to make a loan with a 5% interest rate amortized over 25 years, you’d have a loan of $1,188,000 (trust me on this. I know things). So working backward to check our work, we divide the $83,333 annual debt service into our NOI of $100,000, and we get 1.2.

These kinds of loans are almost always "portfolio" loans. This means that the lender will not sell them on the secondary market (Fannie Mae and Freddie Mac are among the largest buyers of residential mortgages), but will hang onto them. Because of this, they have the flexibility to set their guidelines. They will typically do two additional things with their loans: they will extract a personal guarantee, and they will have a maximum loan-to-value ratio (LTV) for their loans. If their maximum LTV is 80% (which is typical), the loan we’ve just calculated would be good for a property valued at $1,485,000 (1,188,000 / .80 = 1,485.000). If the property you are considering has a price lower than that, let’s say $1,300,000, the lender is likely to approve you for $1,040,000–80% of the purchase price. If your personal financials look good, some lenders may be willing to extend more credit. They might look at "cross-collateralization," for example. This means that they would encumber other properties you own to secure the excess. They may also make the loan "recourse." This means that in the event of foreclosure, they would have the right to come after you personally for any shortfall if the property should not bring in enough cash at sale to clear the mortgage and costs of foreclosure. This personal guarantee can make refinancing or selling those other properties difficult.

The primary things to keep in mind with commercial financing is that the lender is looking very hard at the economic viability of the property when approving a loan.

Thank you for visiting my blog, let me know if you have a question, or I'd love to hear your comments. Come back again soon.

Roxy Redenbaugh, Broker/Owner

Cascade Lending LLC

Residential and Commercial

www.cascadelendingllc.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Vacation Homes Increasingly In Demand Because Of Remote Work Trends

noreply@blogger.com (Roxy's Real Estate News ) — Tue, 31 Aug 2021 16:38:00 -0700

It's not something you'd expect during a pandemic and recession, but numbers don't lie. According to a PRNewswire report, sales of vacation homes are soaring. According to Redfin's report, demand for second homes skyrocket 100% from a year earlier—the fourth triple-digit increase in the last five months. That outpaces the demand for primary homes.

Home sales are on the rise across the board due to record-low mortgage rates but also because of a wave of relocations during the pandemic. Demand for second homes rises to the top among more affluent Americans who work remotely, no longer need to send their kids to school in person, and are limited by travel restrictions, according to Redfin's lead economist Taylor Marr.

"With mortgage rates at all-time lows and offices shut down across the country, the dream of having a second home outside of the city is becoming a reality for many wealthy Americans," Marr said. "Unfortunately, at the same time, millions of less-fortunate families are behind on their mortgage or rent payments due to financial hardship brought on by the coronavirus pandemic."

Some of these second homes may eventually turn into primary homes, as it's not uncommon for a buyer to close a deal on a second home before putting their current house on the market. It seems resort towns across the U.S. have attracted more homebuyers. Hotspots include Lake Tahoe, Cape Cod, Palm Springs, the Jersey Shore, and Bend, OR.

Even when offices reopen, folks will be able to spend more time than ever before in their second homes because many employers will continue to offer flexible remote-work policies. With workers still commuting in one or two days a week, resort towns that are near major cities will likely continue to heat up."

Thank you for visiting my blog, please leave a comment or question and come back again!

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Source:PRNewswire, Redfin, TBWS

'Aging in Place' Helps To Fuel Housing Shortage

noreply@blogger.com (Roxy's Real Estate News ) — Sat, 22 May 2021 11:35:00 -0700

As the baby boomer generation has aged, it has also stayed put. And for all the innovations
builders and product manufacturers have come up with to help seniors “age in place.” they may have also made it difficult for would-be homebuyers, causing a lack of housing inventory.

According to a new report from Freddie Mac, 2019 will see a significant shortage of available homes here in the U.S., failing to meet needs by 2.5 million units. It doesn’t help that at the same time millennials are buying fewer homes at this point in their lives compared with previous generations at similar periods.

As seniors continue to prefer to stay where they are as the optimal way to live out their remaining years, housing inventory has tightened nationally. According to the report, for people between the ages of 67 and 87, homeownership rates dropped by 11.6 percent for previous generations but only 3.6 percent for the current (leading edge) generation of seniors, identified as having been born between 1931 and 1941.

New advances in information technology may be the culprit, as well as accessibility to better healthcare and education, with the report crediting those advancements as “boosting and extending” housing demand among seniors. The result? The current senior generation has become much slower in transitioning out of homeownership than prior generations. Reverse Mortgage is another retirement tool being used to keep seniors in their home.

The U.S. Census Bureau says lost units will need to be replenished at a rate of 350,000 homes per year in order to bring the market to a “well-functioning” status. “Vacant homes increase liquidity in the market, enable prospective buyers to find a match, and give prospective sellers confidence to list their home for sale,” the Freddie Mac report states. “Vacancy rates are an important indicator of housing market vitality. Too high a vacancy rate reflects a moribund market, while too low of a rate reduces the efficiency of the marketplace.”

While this does not bode well for home shoppers, it will boost spending on renovations, according to Chief Economist Sam Kater. “We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting, making renting more attractive to younger generations.” If that is true, however, those in a position to purchase the limited number of homes available may well see their property values increase more quickly than anticipated.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Source: Realtor, Reversemortgagedaily, FreddieMacTBWS

Staying Sane As Work-From-Home Realities Continue

noreply@blogger.com (Roxy's Real Estate News ) — Fri, 14 May 2021 10:35:00 -0700

Today, millions are working productively from home, and even when it felt feasible for employers
to ask them to start their commute once again, many have extended the work-from-home option into 2021. But how has this played out with remote workers? Did their giddiness to set up a laptop and work in their sweats last?

In the best of times, working from home is associated with all sorts of positive emotions for remote workers — freedom, autonomy, trust and happiness, to name just a few. Indeed, remote work is often considered the ‘holy grail’ of flexible work options, with benefits galore that far outweigh any potential downsides. Working from home during the pandemic, however, is not welcomed by all. Juggling personal and professional priorities without access to many of our normal outlets can weigh down on many of us.

It may well be that the key to handling working remotely is accepting (instead of resisting) some of the negative emotions that comes along with it. Trying to develop an “attitude of gratitude’ may well be one of the quickest paths to a positive, happy outlook. While it may feel cathartic to complain, in one study, participants who wrote a few sentences a week for 10 weeks about things they were grateful for were more optimistic and felt better about their lives than those who wrote about what irritated them.

So what can you be grateful for? A supportive boss? Being able to watch your kids grow up and have more time with them? Having more time for self-care? “How you frame something in your mind determines how you experience it. ...So, if you approach things with a ‘glass half-empty’ attitude, you’ll tend to experience them as lacking. Fortunately, you are in complete control of your mindset.”

Other ways to happily accept your remote fate include setting up an efficient, comfortable
home office instead of taking up space on the sofa with your laptop. Even if your dining room table is all that is available, consider surrounding yourself with things that make you happy — plants, photos of the family, and artwork. Design a backdrop that makes your Zoom meetings look professional once that laptop camera turns on.

Remember the routines you once had when getting ready for work? Develop new ones and stick to them. Perhaps that means getting out of bed and stretching, doing a few minutes of meditation, and then heading to the Nespresso machine. Set up designated break times all day long and tell your boss, co-workers, and family members when you will be available to them.

Bonding with others and feeling like you’re part of a community is key for staying upbeat, so work on developing your work relationships remotely....“Virtual meet-ups, instant messages, group chats and other forms of remote communication can all help.” Productive hours (when you’re “in the zone”) should be focused on getting your best work completed.

Instead of scrolling through your phone while you eat lunch, take the time to “play” at something you really love. “Spending 30 minutes between meetings doing something you enjoy can temper any stress or negative feelings you’ve been having.” If you take care of you, you show up for others when they truly need you. Don’t let self-care slip by the wayside.

Adequate sleep, good lighting, healthy eating, limiting sugar and alcohol, and exercising are all ways to use self-care to combat stress. Taking the time to be outdoors helps tremendously as well. Courtney cites studies that showed that those who spent more time outdoors (even just walking around the block or visiting a local park) reported better sleep and felt significantly less anxiety, stress, and depression than those who spent less than 30 minutes outdoors each day.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1

Source: MoneyTalkNews | TBWS

Getting Prepared To Buy Your First Home

noreply@blogger.com (Roxy's Real Estate News ) — Tue, 27 Apr 2021 11:15:00 -0700

For some it seems like a no-brainer. Renting a home feels like throwing money away, offering no sense of ownership whatsoever. Buying a home is investing in the future. Even if it takes up to 30 years to pay off the loan, you have been LIVING in your investment.

According to a new study by Framework, however, there is more than meets the eye with first time home buyers, who see it as laced with blind spots and pre-loaded with anxiety — mostly because they went into it fairly blind, without enough education and information. The surveys were completed by two groups: recent first-time homebuyers and prospective first-time homebuyers.

The report says only 41% feel very well prepared for the home buying process, 57% worry they can't afford homeownership, 47% think the home buying process is "rigged" against the buyer, 44% fear making costly mistakes, and 55% said they could use an independent advocate to coach them through the process of home buying and homeownership. On top of that, more than half of first time home buyers in both groups said buying a home was more difficult than it should be.

So what does this tell the average real estate professional or mortgage loan officer? That they may have fallen short of making their buyers literate enough to have confidence in the process? While, once they had been through the process of buying a home, 64% of responders said they emerged from it knowing a lot more about the financial aspects of it, most wished they had taken some kind of class to prepare them for it.

When you think about it, those in the industry often don't do a great job in explaining aspects of homeownership not in their purview — things like paying taxes, how and when a payment can adjust, or promoting the idea of having a home ownership "slush fund" in the case of an emergency, such as flooding, a failing roof, or plumbing leaking underground. Of course, these aren't included in the warm, fuzzy feelings industry professionals care to project as they lead buyers through the process, but that doesn't mean first-time homebuyers shouldn't be encouraged to find classes or sources that address their concerns.

CurrentMortgageRatesToday.org says that while the largest cost of owning a home will be
your monthly mortgage payment, there are several other costs that you should be aware of when trying to find out how much homeownership will cost you — things like an HOA fee (and what it covers), property taxes, homeowner's insurance, and utilities. And then there is maintenance and repairs.

There are always risks inherent in any large purchase. But it's up to the potential homeowner to decide if it's the best financial step for them. Lenders and Realtors often offer courses for first-time homebuyers, but they can also be found online as well.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1

Source: PRNewswire, currentmortgageratestoday.org, TBWS

Obstacles That Can Hold Up Closing For Both Buyers and Sellers

noreply@blogger.com (Roxy's Real Estate News ) — Sun, 25 Apr 2021 12:24:00 -0700

Whoever said it’s the little things that count wasn’t kidding when it comes to closing escrow
on a house you just bought or sold. If your escrow agent or real estate consultant were able to articulate all the hoops that must be jumped through from the day an offer is accepted to the day you hand over the house keys, they will have earned hero status.

The BIG things for the seller include signing off on the buyers’ inspections or fixing anything that comes out of them as a negotiation point of the sale, making sure the buyer gets a final loan approval and seeing their funds being deposited in escrow. But what about some of a sellers’ most overlooked things — those that have the capacity to wreak havoc at the least minute, keeping escrow from closing just when you thought the money would be in the bank?

Little things can be mini-bombs that go off at the last minute. You may not give utility bills a second thought. But utility companies, as well as closing personnel, will certainly notice that you forgot to pay your water bill. Any bills that stacked up against your property are your responsibility until you hand over the house keys. Failure to pay a $55 water bill can see everything come to a screeching halt.

A detailed walkthrough of your property is not only expected by the buyers, but encouraged
by their agent, their banker — anyone who has an interest in seeing the transaction close. If they saw your home furnished and appearing in pristine condition when they made their offer, but now see gouged floors and banged up walls that weren’t there until after you moved out, it’s your responsibility to fix it, even if it’s due to natural causes, like flooding from a bad storm. Damage that occurred after a home inspection is always the responsibility of the seller, so fess up and make good on any damage that was your fault or even may have been your fault.

An issue that crops up more frequently than anyone would want to admit is property line and survey issues. If your neighbor was such a bud that his play set’s piers were cemented into the ground within your property line, it can hold everything up until the structure is moved if the buyer requests it. If you built a storage shed over a utility easement without knowing it, you’re still at fault and must remedy the situation. Fences don’t always follow property lines, either. Make sure you study the survey performed on your property and get these things addressed before the buyer heads over the sign papers.

So now we’ve warned sellers. What if you are the buyer? Something Realtors or Loan Officer's might not warn you about (but should) is committing the error of making major purchases AFTER your loan approval — one that has the capacity to lower your cash reserves and/or affect your credit score, making your loan approval become a fleeting moment instead of a reality. While it’s a royal pain for YOU, since you thought you had chosen the house of your dreams, think as well about the seller of the home you offered on in good faith. They may have already purchased another home and physically moved out. Your faux pax may have just caused a domino effect to take place, with escrows fallouts happening in rapid succession. Any other changes in your income, credit or access can change your approval, be careful during escrow to make sure you have no changes until AFTER you close escrow.

The key here is to stay vigilant as to any potential hiccups that can occur by staying in close touch with your agent, your escrow officer, and any loan personnel that may be involved during closing week. They may have multiple transactions to deal with, while you have one — your own. And what can appear to be a small hiccup on the surface can bring things to a screeching halt if not dealt with promptly. While everyone tries to keep things together on your behalf, being proactive is never a bad idea.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Fun Real Estate Facts That Will Make You Smile

noreply@blogger.com (Roxy's Real Estate News ) — Mon, 25 Jan 2021 14:50:00 -0800

Sometimes it’s not the big real estate news about trends and statistics that send us falling
onto our backsides — it’s the lesser-known facts that make us smile, make us think and realize the world is a crazy-messy place.

Inman News featured some amazingly entertaining real estate facts we’d like to share, and there is no time like the present — when we are reeling over stock market volatility and wondering what comes next — to get a bit of comic, head-scratching relief.

You want fries with that? Did you know that the McDonald corporation possesses one of the world’s most comprehensive (international) real estate portfolios? Franchisees do all the burger-flipping work while the Big D enjoys the land-holding and franchise fee revenues without worrying about the calories.

Some people are billionaires, but you wouldn’t know it by the way they live. Mogul Warren Buffet lives in the same house he bought in 1958 for a cool $31,500. Think his mortgage is paid off by now? A number of high profile celebrities have some frugal leftover tendencies as well, including Jay Leno, who made the choice to never spend his $15 million a year TV show salary, Leonardo DiCaprio, who drives a Toyota Prius, and Paul McCartney, who had his daughter pay her own way through college and asks party guests to pay for their own drinks.

You don’t have to sound brassy if you have a brass doorknob. You just don’t tend to pass on the flu as easily. According to a number of sources, brass doorknobs disinfect themselves, being the most antimicrobial metal of all. So next time you turn the knob or push down on a brass lever, you’ll have fewer worries that you may start sneezing because of it.

It’s a red letter day when you pay off your mortgage. The Scots not only think so — and they make sure you know about it. In Scotland when someone writes that last monthly mortgage check they run out and buy a bucket of and paint their front doors red. This mortgage-free announcement is thrilling to homeowners who definitely think it’s worth proclaiming.

Think a tiny paperclip is no big deal? Think again. Beginning in 2005, Canadian Kyle McDonald traded a paperclip for a pen, then for a doorknob, then a camp stove, a generator and on and on. He traded rent, favors, and even a movie role until he ultimately got a 2-story farmhouse for all his swapping efforts. Don’t let anyone tell you it’s not the little things that count.

Sometimes Public Enemy #1 is a nice guy. Some say this may be an urban myth, but the story continues to be told. Charles (Pretty Boy) Floyd, a Depression-era gangster not only robbed banks. He also served as a kind of modern-day Robin Hood, destroying mortgage documents in the process and freeing a number of citizens of their financial obligations. Sometimes the little guy comes out on top.

Capitalism produces winners and losers, but who’d a thunk the game Monopoly was designed by a woman to teach us a lesson? Still a bestselling board game, the concept taught us to buy up property, stack it with hotels, and charge fellow players sky-high rents for the privilege of accidentally landing there. But the little-known inventor, Elizabeth Magie had no idea that it would encourage its players to celebrate values opposed to those she intended to champion. A devout and vocal socialist, Magie proclaimed ‘the equal right of all men to use the land is as clear as their equal right to breathe the air – it is a right proclaimed by the fact of their existence.’ Seems Americans never grasped that idea.

Although India is a land of haves-and-have nots, one of the haves built a billion-dollar home. It boasts 27 floors (six of them for parking), 3 helipads, is staffed with 600 people, offers a 4-story hanging garden and is complete with a movie theater. We’re not sure how many bathrooms one needs for a life well-lived, however.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

PANDEMIC SPURS RISE IN MULTI-GENERATIONAL HOUSEHOLDS

noreply@blogger.com (Roxy's Real Estate News ) — Mon, 28 Dec 2020 13:52:00 -0800

Life circumstances can sometimes change on a dime. Such is the case of household living situations since the pandemic began, causing social and economic upheavals for many families.

After the stay-at-home orders went into effect in many parts of the country in March, the National Association of Realtors noted a 15% increase in buyers who purchased a multigenerational home compared with before the pandemic hit, compared with 11% in the previous year. NAR's vice president of demographics and behavioral insights, Jessica Lautz, says, "One in six home buyers who purchased during the pandemic purchased a multigenerational home. That's an increase from 1 in 10."

Intergenerational homes can be anything from two (or more) attached, fully functional units in a duplex model or one home that offers private kitchens and separate entrances, like a rental unit in a single-family house. Or they might also be a detached accessory dwelling unit, typically a smaller home, in the backyard of a larger house. Adult children concerned about placing their parents in nursing homes during the pandemic have simply decided to keep things in their own backyards, just to be safe. Parents whose older kids lack employment or can't attend college are included in this "pod" living situation as well.

The ideal is, of course, to offer the other generation a degree of independence, with separate entrances and separate kitchen facilities. And homebuilders have been and continue to step up to the plate to provide this arrangement. "As you might expect, homes intended for more than one family tend to be a little larger, by nearly 22%, according to NAR data. "The typical existing home is 1,880 square feet and costs about $270,000. Yet a multigenerational abode is roughly 2,290 square feet and costs about 10.7% more, with a $299,000 price tag." These larger, higher-priced alternatives also take into account the pooling of several incomes, according to NAR's research.

The figures released by NAR account only for recent purchases. "The actual number of intergenerational households that have formed since the start of the pandemic has actually increased by a staggering 61%."

U.S. Census data found that a record 64 million people—20% of the U.S. population—lived with multiple generations of adults in a single-family home.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

How Does Refinancing Save Homeowners Money

noreply@blogger.com (Roxy's Real Estate News ) — Wed, 23 Dec 2020 11:42:00 -0800

Question: How does refinancing save homeowners money?

There are two categories of refinancing, "rate-and-term" and "cash-out." Both can save you money.

The first type, rate-and-term, replaces your existing loan with one that has a better rate and/or terms. You might replace an ARM or balloon loan with a fixed-rate loan, for example. Or you may decide to lower your rate AND shorten your term. Some borrowers have been able to refinance from a 30-year loan into a 15 or 20-year loan, reducing the term, without appreciably raising their payments.

A borrower does not receive any significant amount of cash in a rate-and-term refinance; lenders generally consider that any cash proceeds above $2,000 pushes the loan into a cash-out category.

There are always certain costs involved in any mortgage transaction; there will always be fees for title, escrow, underwriting and document preparation, for example. Borrowers can add these fees to their new loan so as to avoid having to pay them in cash. Financing these items is not considered cash-out.

When you are deciding whether to do a rate-and-term refinance, you should evaluate it in two primary ways: first, how long will it take to recover the cost of doing the loan? For example, if the closing costs amount to $3,000 and the reduction in rate gives a saving of $1,500 per year in the first year, it will take approximately two years to "break even." For most people, this time frame is more than satisfactory, but you should make your own decision. The second criterion is net savings over some time period, say five years, ten years or more.

Homeowners with adjustable rate mortgages (ARMs) may decide to refinance into a fixed rate loan, even though their rate may initially be higher, they might feel more secure knowing that their rate will never change. This is more of a defensive strategy to guard against the possibility of a higher rate in the future, but it may not "save money."

The other type of refinance, a "cash-out," is one where the borrower receives cash of more than $2,000 at closing. This is accomplished by getting a new loan that is larger than the balance of the old one plus closing costs. Borrowers can use that money for anything. Some homeowners have used cash-out refinances to pay off consumer debt, like car loans, student loans, and credit cards. Using home equity to pay off credit cards can drop the payment dramatically! But paying down installment loans can create a false economy. A $30,000 car loan with an interest rate of 6% will have a payment of $500, but paying off that loan with the proceeds of a home refinance will effectively drop the payment to $150—but does it really make sense to finance a car for 30 years?

Hope this is useful.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Don't be a 'Lone Ranger' when house hunting

noreply@blogger.com (Roxy's Real Estate News ) — Fri, 18 Dec 2020 11:34:00 -0800

If your idea of a fun weekend is making a list of open houses to visit and then running all over town to see if you can find that diamond of a home, then have at it. The only problem with it is that you're doing it without the knowledge and protection of a professional real estate consultant. Can you buy a home without one? Absolutely. Is it wise? Not really, especially when, in most cases, you pay nothing for the services of a buyer's agent.

Real estate is complex, filled with nuances and pitfalls better navigated by seasoned professionals who can usually spot something amiss a mile away. Here are a few of the risks you expose yourself to going it alone.

Negotiation is something kids learn to do at an early age. "I'll trade you my PBJ for your salami sandwich." When they get older, they may strike a compromise with the teacher for turning in an important project a day late. Older yet and they are negotiating a salary for a new job. But real estate negotiation is a different animal. It's not a place to "practice" the art of negotiation if you weren't good at it as a kid or even a grown adult. Real estate agents not only understand how to best use leverage to earn you the best deal possible. They also know when to advise you to walk away because they know how sellers operate. Despite their home being desirable, a seller whose sales price is unreasonably high (not in line with other homes for sale in the area that are of similar size, age, and condition) is not realistic. It means they are not that truly dedicated to selling their home any time soon. A house priced unusually low and being sold in "as is" condition may be a recipe for remodeling disaster. By not working with an agent, you can't tap into their insights and acumen for how to drive the best bargain possible – a loss that can cost you.

Market knowledge is not something you can glean by spending a few evenings online looking at houses and neighborhoods. The prices listed on real estate apps can't always be trusted. A Realtor knows this and will call each listing agent or owner to confirm what they see is true. Sure, you can make those calls on your own, but you just may shoot yourself in the foot by revealing your motivation to buy, leaving you a limited opportunity to negotiate. A agent offers insights into trends in the market over time, will have researched the area for development, commercial and school construction and will give you an estimate for how much you should be budgeting for your target property -- all of which can change constantly. It's what agents do in their sleep.

How do you know you've got the real skinny on a property? The vetting process is an important one, with real estate professionals being held to legal standards that require them to thoroughly vet a property for potential pitfalls – water damage, toxic materials, health and flooding hazards, the list goes on and on. They are not keen on being the ones being held responsible for encouraging you to buy a property that has serious issues without all those issues being disclosed in the light of day and in writing. They always, always recommend professional inspections be performed as well as obtaining hazard and environmental reports for the area. You could be buying a home on ground where there was once an airfield, with toxic substances still remaining in the soil where your children play. Or the house may be located in an area where some serious mining took place, leaving it vulnerable to sinkholes or foundation sagging.

Don't kid yourself. The paperwork involved in a real estate transaction is nothing to scoff at. Contracts, disclosures, addendums, transfers, inspections, and reports can bury you. And what about those loopholes you may have overlooked? You assumed the seller would leave all the pool equipment, the chandelier in the dining room, and the entertainment cabinets that perfectly fit the walls in the family room. But when you get the keys to move in, you discover they are gone. Why? You forgot to intentionally specify they remain when signing the purchase agreement. Realtors don't forget these things. In fact, they may go overboard in enumerating all the items that stay with the house just to play if safe.

While you should make sure you personally review any binding document before signing it, a real estate professional can greatly reduce how much time you spend on legal matters so you can get back to how you really want to spend your time – activities like choosing that new king-sized bed for the master bedroom. Or buying patio furniture for around the pool you always wanted and finally got.

And then there is FOMO — the fear of missing out. Going it alone means you are limited to word of mouth recommendations and only what you can find on your computer. You may not realize that a new home community is being built nearby that might knock the socks off the neighborhood you are considering. The right Realtor will bring detailed knowledge of the market in your area or neighborhood – as well as other potential markets nearby that you might not have considered but could be just what you are looking for. They cast a wide net when looking for your home, so why not leverage their knowledge? They'll have information on property taxes, closing costs, HOA fees (as well as the health of the HOA itself), and even supplemental taxes you might not find out about until after you moved in. Why? It's their job. So why not let a Realtor be the detective instead of being a weekend house-hunting warrior? You've got nothing to lose and a lot to gain.

The first step to buying your home is getting pre-approved for a home loan. Call me and lets get started. I can also introduce you to a Realtor that will look out for your best interests and help you find the perfect home.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post.

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

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Source: Lendersnetwork, TBWS