Buying Remains Cheaper Than Renting in 39 States!

Buying Remains Cheaper Than Renting in 39 States! | MyKCM

In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!

A study by GoBankingRates looked at the cost of renting vs. owning a home at the state level and concluded that in 39 states, it is actually ‘a little’ or ‘a lot’ cheaper to own (represented by the two shades of blue in the map below).

Buying Remains Cheaper Than Renting in 39 States! | MyKCM

One of the main reasons owning a home has remained significantly cheaper than renting is the fact that interest rates have remained at or near historic lows. Freddie Mac reports that the current interest rate on a 30-year fixed rate mortgage is 3.91%.

Nationally, rates would have to reach 9.1%, a 128% increase over today’s average of 4.0%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters who would like to evaluate your ability to buy this year, let’s get together and find you your dream home. Let’s talk facts and put you in a house of your own – 413.301.4614 ToriDentonRealtor.com –Turning HOPES & DREAMS into HOMES!

Helping you make the right MOVE – One HOME at a time!

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Shining the Light on Solar

Before you get involved in Solar energy – please do your homework. Whether you are the buyer or seller in this transaction, there are important things to consider when it comes to the transfer of ownership of your home.

 

Do you Lease or Own the panels?

OWNED PANELS: If the panels are owned by the seller, then they should be factored into the price of your home just as any other asset would be. This can usually be accomplished by searching comparable homes with owned solar panels.

A Solar Renewable Energy Credit (SREC): An SREC is created for every megawatt hour (MWh) of electricity produced by a solar generator. SRECs allow a seller with a solar array to use electricity that is produced by the panels and then separately sell the SREC to a utility company. You should factor in an SREC when valuing the asset.

Some solar owners use SREC brokers to handle the sale, so if you are a seller who is part of a ten-year SREC program you may want to consider selling your future credits through such a broker. If a seller does this, they would then value their solar panels based on the energy savings that they provide.

Buyers need to ask sellers if they are part of an SREC program and whether the SRECs will be transferred with the panels. If they are, a buyer would also want to know what the average annual output of the panels has been so that they can properly value them.

Leased Panels: If the panels are leased, it can be a bit more complicated. When a seller has leased solar panels, it is recommend that the seller contact the leasing company right away to let them know that they are planning to sell the home. In fact, some solar companies have set up departments specifically to work on lease transfers.

What’s a UCC-1: The solar company may reference a UCC-1 (Uniform Commercial Code – 1) that has been recorded with the property. A UCC-1 is a legal form that acts as a lien against the solar equipment on the property and is used by the solar companies to protect their interest in the leased panels. These finds should be recorded at your local registry of deeds. It is important to know whether or not a UCC-1 has been recorded with the property, because some lenders may have concerns that the UCC-1 will take priority over the mortgage in the event of a bankruptcy. Some companies will remove the UCC-1 filing and then replace it when the new mortgage is recorded.

Home Buyers: Buyers who are interested in a home with leased solar panels may want to remember to factor the monthly lease cost when determining whether or not you can afford the home. Your lender will most likely consider this when making a determination on your loan. Also, buyers should review your credit scores because the solar leasing companies are going to ensure that the buyer can assume the costs of the lease before they approve a transfer.

LEASED PANELS:  A seller client has three options when dealing with leased solar panels:

1. They can buy out the lease;

2. Transfer the lease to the new buyer; or

3. Attempt to transfer the panels to their new home, although this option may only be available in rare occasions.

As you can see Solar panels can at the very least complicate the purchase and sale of a house, and at the most stop the transfer all together if the item is not handled properly from the get-go! Please use caution when buying or selling a house with solar panels.

Got questions? I’ve got answers – please feel free to contact with your house Purchase and Sale concerns!

Tori Denton, PSA, Realtor®

413.301.4614

tedenton109@gmail.com

Need more information?

The Attorney General published the following helpful informational sheet on solar panels:

http://www.mass.gov/ago/news-and-updates/press-releases/2016/advice-to-homeowners-considering-solar-panels.html

Source: Shining the Light on Solar BY MAR LEGAL STAFF July/August 2016

The Big Down Payment Myth

different-types-of-home-loansHaving the spare capital to put 20 percent down on a home purchase is great, but it’s certainly not the norm. Still, many people think it is and that belief may be holding some would-be home buyers back, particularly young adults.

Indeed, 39 percent of non-owners say they believe they need more than 20 percent for a down payment on a home purchase. Twenty-six percent believe they need to put down 15 to 20 percent, and 22 percent say they need a down payment of 10 percent to 14 percent to buy, according to the National Association of REALTORS®’ 2017 Aspiring Home Buyers Profile report.

But now for the reality: The average down payment on a purchase mortgage was just 11 percent in 2016. And that’s just the average; often times down ppuzzleayments are much lower. For borrowers under the age of 35, the average down payment was just under 8 percent, according to NAR’s survey.

As such, “aspiring first-time buyers think it takes twice as much to buy a home than it really does,” writes Jonathan Smoke, realtor.com®’s chief economist, in his latest column.

How much a person truly needs for a down payment depends on their situation. Their financial circumstances, home location, and the price of the home are important factors.

But there are many mortgage options that offer the opportunity to make low or even no down payments. For example, the Department of Veterans Affairs and the U.S. Department of Agriculture offer no-money down loans to those who are eligible. In 2016, 16 percent of buyers under the age of 35 put no money down on their home purchase.

Further, the largest share of loans for buyers under age 35 last year were for people putting down less than 5 percent on a home purchase (or about $3,500). The 3 percent down payment programs backed by Fannie Mae and Freddie Mac, and the 3.5 percent FHA mortgage that primarily targets first-time buyers, are both helpful programs to consider. These loan programs don’t require unblemished credit either. The average FICO score was 713, but realtor.com® notes borrowers with a 639 were still getting approved.fico by loan

As such, Smoke says the millennial dreaming about homeownership needs to get this message: They need a FICO score of at least 639 and enough for a 5 percent down payment (that is, if they don’t qualify for the other programs with lower payment options). In that case, they’ll need to save about $3,500 to buy in the typical American town.

Source: “Attention First-Time Buyers: Here’s the Key Stuff You Don’t Know About Mortgages,” realtor.com® (Feb. 9, 2017)

Home Prices: Where Will They Be in 5 Years?

My clients make good decisions because they are well-educated… the transaction is well-executed, and the CLOSING is well-delivered! Here’s a sample of the information I provide to my clients (short & sweet, just the meat – no fillers):
Home Prices: Where Will They Be in 5 Years? | MyKCM

Today, many real estate conversations center on housing prices and where they may be headed. That is why I like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 4.0% over the course of 2017, 3.2% in 2018 and 3.0% the next three years (as shown below). That means the average annual appreciation will be 3.24% over the next 5 years.

Home Prices: Where Will They Be in 5 Years? | MyKCM

The prediction for cumulative appreciation ticked up from 18.7% to 21.4% by 2021. The experts making up the most bearish quartile of the survey are projecting a cumulative appreciation of 10.2%.

Home Prices: Where Will They Be in 5 Years? | MyKCM

In A Nutshell

Individual opinions make headlines but I believe this survey is a fairer depiction of future values. Who wouldn’t want to make an average of 21% on a 5 year investment?

The market is still appreciating. That means it’s good to be a buyer OR a seller at this time… If you are a seller your house has appreciated and you have significant equity in your house allowing you to MOVE UP to your dream home. If you are a buyer, you still have plenty of appreciation left in a new home and if purchasing your first home (at historically LOW interest rates) you are STILL making a great INVESTMENT!

Got questions?? I’ve got answers – let me add some value to your financial knowledge database! My clients make good decisions because they are well-educated, the transaction is well-executed, and the CLOSING is well-delivered!

Contact me today to learn more! 413.301.4614 OR tedenton109@gmail.com

3 Simple Steps to 3%

3 steps to 3percent

Start today.. contact me or your lender and discuss what your first step needs to be. You may be more ready than you think!

If you can gather first, last, and security deposit to rent … why not put that same cash to work as a down payment on your OWN home! Rents can be substantially higher than a mortgage… after all you are always paying a mortgage – why pay your landlord’s when you could be building equity for yourself!

 

Got questions?? I’ve got answers – contact me to day!

No Housing Bubble? Then What is IT??

With home prices expected to appreciate by over 5% this year, some are beginning to worry about a new housing bubble forming. Warren Buffet addressed this issue last week in an article by Fortune Magazine. He simply explained:

“I don’t see a nationwide bubble in real estate right now at all.”

Later, when questioned whether real estate and/or mortgaging could present the same challenges for the economy as they did in 2008, Buffet said:

“I don’t think we will have a repeat of that.”

What factors are driving home prices up?

It is easily explained by the theory of supply and demand. There is a lack of housing inventory for sale while demand for that inventory is very strong. According to a recent survey of agents by the National Association of Realtors(NAR), buyer traffic was seen as either “strong” or “very strong” in 44 of the 50 states (the exceptions being: Alaska, Wyoming, North Dakota, West Virginia, Connecticut and Delaware).

Also, in NAR’s latest Pending Home Sales Report, it was revealed that the index was the highest it has been in a year.

What does the future bring?

As prices rise, more families will have increased equity in their homes which will enable them to put their home on the market. As more listings come to market, price increases should slow to more normal levels.

Anand Nallathambi, President & CEO of CoreLogic, recently addressed the issue:

“Home price gains have clearly been a driving force in building positive equity for homeowners. Longer term, we anticipate a better balance of supply and demand in many markets which will help sustain healthy & affordable home values into the future.”

Check out these interesting articles…

Visit houselogic.com for more articles like this.

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3 Home Energy-saving Myths Revisited

https://i1.wp.com/thumbs.dreamstime.com/x/money-out-window-8474110.jpg

Myth 1: Replacing single-pane windows is a good investment.
According to the Energy Star program, replacing old single-pane windows with double-pane, low-E windows will save you money every month. While that’s true, it’s not the entire story. In an average house with 20 or more windows, it could take up to 30 years to recoup the cost. Most people don’t stay in their home that long. 

Money-saving alternative: Storm windows are less expensive, customized to fit over existing single-pane windows and installed by homeowners. Storm windows save energy by creating a second layer of air that reduces drafts and escaping heat. Newer models can be left on year round, as they open and close. 

Myth 2: Exterior caulking is the best way to seal leaks. 
The purpose of exterior caulking is to keep water out, not prevent heat from escaping. Making your house more energy efficient usually requires improvements on the inside. 

Money-saving tip: Underneath the house, the floor joists and sill plates around the foundation are usually poorly insulated. A simple bead of caulk where wood meets foundation can help reap rewards. Elsewhere, however, more is needed. In the attic, blown-in insulation will make a dramatic difference in energy savings (especially in older homes) helping keep hot air inside in winter and outside during summer. 

Myth 3: Closing registers saves energy.
Forced-air heating systems are more efficient with the registers open. And over time, ducting can develop leaks, so closing registers only forces more air out of the leaks. 

Money-saving tip: If you have easy access, patch or replace old ducting with obvious air leaks. Reduce the need for forced-air heat by placing more efficient space heaters in rooms you spend the most time in. 

Small losses of energy can add up, but locating them often takes specialized equipment. That’s why one of the best home improvement investments you can make, both to identify energy loss and get inexpensive and simple solutions to close those gaps, is arranging an energy audit through your utility company. Don’t forget to ask about rebates or incentives when you schedule the appointment! 

Source: The Family Handyman

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