How To Retain Your Sanity While Working From Home

How To Retain Your Sanity While Working From HomeThere are a lot of people who enjoy working from home; however, with the COVID-19 pandemic, many people who are not used to working from home are forced into this new arrangement. It can be hard for individuals o stay focused when they are stuck in the environment at home. Particularly if the kids are home from school, it is easy to get distracted. Fortunately, there are a few ways people can retain their sanity as they work from home.

Get Into A Routine

One of the first steps people need to follow is to find a routine. It can be tempting to sleep in every day, procrastinate while watching TV, and take long breaks for meals; however, it is critical to remember that there is still a job to do. Try to wake up at the same time every day. Start work at a consistent hour. Take a consistent break for lunch. Finding a routine will make working from home feel more like a job than a vacation.

Take Advantage Of Technology

Even though working from home can feel lonely, it doesn’t have to be this way. With technology, it is easy for people to stay in touch with their partners from work. Use technology to talk to people. Check up on others and see how they are doing. Ask for help when it is needed. Communicate with multiple people at a time. This is incredibly important for those who work in a team. At the same time, those who typically work alone should make sure this doesn’t become a distraction. Talking to others can be a great way to break up the monotony of the day.

Learn Something New Every Day

Finally, take the time to learn something new! Those who no longer have a morning or evening commute are going to wind up with some extra free time on their hands. Take this opportunity to learn something new. Even though some people might feel like they are being forced to work from home, turn this situation into a positive one. use the extra time wisely and find a way to expand those horizons ever so slightly. Learning new skills can pay big dividends down the road.

Home Sales Are Spiking, Driven By Low Mortgage Rates

Home Sales Are Spiking, Driven By Low Mortgage RatesAccording to data from the National Association of Realtors, existing-home sales increased by 3.6% in December 2019. That pace is the strongest month-over-month in almost two years, since February 2018. The sales figures were also up 10.8% from what they were in December 2018.

What’s behind this uptick? The biggest factor driving the surge in home sales is historically low mortgage interest rates. 

Plummeting Rates

During the last week of February 2020, mortgage rates fell to their lowest in three years and were hovering – just barely – above all-time lows. The 30-year fixed-rate mortgage was sitting at 3.45%, almost exactly one percentage point below the same week in 2019. Its lowest rate ever, 3.31%, was reached in November 2012 immediately following the recession.

Despite widespread uneasiness about the falling rates, this should come as no surprise. Mortgage rates typically follow the 10-year Treasury yield, and it’s been extremely volatile recently due to investor concerns over the coronavirus outbreak.

Consumers are clamoring to take advantage of these low rates, particularly first-time homebuyers. New mortgage loan applications increased over 30% in December 2019 as compared to December 2018, while applications for refinancing rose a stunning 109%. 

Demand Is Outpacing Supply

Interestingly, this considerable spike in home sales comes at the same time as a national jump in median sales prices. January 2020’s median listing price was $299,995, a 3.4% year-over-year increase, and many large metropolitan markets saw increases of more than 10%.

With eager consumers applying for new mortgage loans at a dizzying pace, the supply of available homes simply can’t keep up. The number of previously-owned homes on the market decreased by 13.6% in January 2020 as compared to the year before, with some large cities experiencing decreases of over 14%. This is a classic case of supply and demand, and the current market is strongly favoring sellers.  

Looking Ahead

These upward home sales trends are predicted to continue throughout much of 2020, thanks to the “perfect storm” of incredibly low mortgage loan rates, a decreased supply of available homes, and an unemployment rate that’s settled into a 50-year low. 

If you’re in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional.

More Than 25% Of Millennial Homebuyers May Be Financially Unprepared

More Than 25% Of Millennial Homebuyers May Be Financially UnpreparedMillennials are the first generation in America that will probably not be able to do as well as their parents. In the United States, there is not as much upward mobility as there was in the past. What is the cause of this?

CNN reports that Millennials have more college degrees than their parents. They also have an enormous amount of student loan debt. Many millennials have lower-paying jobs than their parents had at the same age when adjusted for inflation. Spending patterns changed as well, due to the high cost of living.

Finding The Money

Saving is not easy. The net worth of Americans, who are from 18 to 35 years old, decreased by 34% since 1996. Even though millennials are financially savvy, the 2008 global financial crisis made it difficult to find jobs and made saving for many nearly impossible. Those who have been able to put aside some money in the last ten years are lucky if they have $8,000 in savings, which is the average for those millennials trying to save for a home purchase.

Soaring Home Prices

By 2018, the real estate market recovered from the 2008 collapse. In most American cities, housing prices are going up significantly. The home prices surpassed pre-crash levels and now continue to rise. Soaring home prices make buying a home very challenging.

What To Do?

For most millennials, the best choice is to continue to live with their parents and use the lower cost of living as an opportunity to put away enough money for the required down payment to buy a house. Many plan to live very frugally and to save for up to five years if they want to buy a home of their own.

For others, they are developing co-ownership plans, where millennials plan to share home buying with more than one person. In these deals, they become the landlord and the tenants of a multifamily property that they buy together.

The Math

The median home price in America is $226,800. First-time buyers, who qualify, can get FHA-backed mortgage financing with as little as 3.5% down. Still, that is $7,938 just for the down payment. There is also the need to have 2% to 5% of the loan amount for closing costs, which can add up to $10,943.

Financial prudence recommends having at least three months of living expenses in savings to cover any unexpected temporary emergencies, like losing a job. Add another $12,000 for this contingency. This means to safely buy a home at the median price, with a low-down-payment loan, a millennial may need to have as much as $30,881.

For conventional financing, with 20% down, the numbers are much higher. For that type of financing, a millennial needs about $66,432!

Summary

Millennials face significant challenges in homeownership that are unique to their generation. For these reasons, many are delaying homeownership for at least five years and living with their parents longer, to save more money, to make their dream of homeownership come true in the more distant future.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional.

How to Buy An Investment Property

How to Buy An Investment PropertyIt is important for everyone to take steps to diversify their assets. While many people take this to mean holding multiple stocks, bonds, and mutual funds in the market, this also includes branching out into the real estate industry. The real estate industry is far more stable than the stock market and provides a fantastic opportunity to generate reliable returns. At the same time, there are lots of options to choose from when it comes to investment properties.

Here are a few tips everyone should keep in mind.

Buying And Renting

One option is to purchase a single-family home as a second building and then rent it out. On the other hand, it is also possible to purchase a multi-unit property and rent out each individual unit. One of the biggest factors to keep in mind is that the owner is going to be responsible for collecting deposits, checking the backgrounds of potential tenants, conducting repairs, and completing maintenance tasks. 

If the property is located in a desirable area, it is possible for someone to collect enough rent to cover the cost of the mortgage and more. At the same time, it is also possible that someone might end up spending a considerable amount of time managing the property. It might be a solid idea to hire a property management company; however, this will eat away at the revenue. These are a few of the key factors to think about.

Flipping Houses

Another option real estate investors can consider is flipping houses. In this process, someone buys a home (which is often in a state of disrepair and inexpensive), repairs it, and then sells the home for a profit. It is also possible that someone might end up spending a significant amount of time and money renovating the home, which might eat away at any financial gains. Be sure to know exactly what repairs and renovations the home is going to need before buying.

A Real Estate Investment Trust

Sometimes, it might be too much for someone to buy individual properties. One possible option is called a real estate investment trust (REIT). This is a company that owns numerous big properties that generate incomes. Therefore, these trusts are often compared to mutual funds in the stock market but for real estate. Different REITs specialize in different areas, so there are lots to choose from.

If you are interested in buying a new home or refinancing your current property, be sure to consult with your trusted home mortgage professional.

How To Finally Become A Real Estate Investor This Year

How To Finally Become A Real Estate Investor This YearInvesting in real estate remains one of the best ways to accumulate wealth in America. There are six ways to get started in real estate investing. One way does not require any investment capital, just an investment of your time. Ways to get started include investing in a REIT, buying an incoming-producing property, using a buy-and-hold strategy, flipping houses, crowdfunding, and wholesale deals.

Investing In A REIT

A real estate investment trust (REIT) is an investment instrument that offers a proportional ownership interest in a real estate portfolio that follows a particular investment strategy. A private REIT has a minimum investment that could be $1,000 to $25,000. A publicly-traded REIT sells in shares, just like stocks on the stock exchange. The investment minimum is just one share and some REITs have share prices under $100.

Income-Producing Property

Buy a home and rent it out. For this strategy to work, you do have to deal with the tenant headaches, unless you can afford to outsource the landlord’s work to a property management company.

Buy-And-Hold Strategy

Buy raw land for cheap on the outskirts of a growing town and wait the time necessary for the town to overtake your land for the opportunity to subdivide and develop it for a high price.

Flipping Houses

For those who like doing contracting work, or who partner up with a contractor, there may be profit in buying some fixer-upper homes to renovate and sell for more than the acquisition price plus the renovation costs.

Crowdfunding

Crowdfunding is a way to participate as a small investor in real estate deals and also to fund your own deals.

Wholesale Deals

Wholesale deals can be accomplished with no money down. You work for other investors and secure properties at lower than market prices by controlling them with an offer that is accepted and then assigning the deal to the investors for a fee.

Summary

If you have been thinking about becoming a real estate investor, now is the time to do something about it. Even if you start with only $100 by buying shares in a REIT, at least you got started. Once you get your real estate investment strategy going, you will find it to be a very rewarding experience, if you are careful and make wise decisions.

Be sure to associate with an expert REALTOR® in your marketplace area to get sound advice and information.

If you are in the market for an investment property or interested in refinancing your current home, be sure to consult with your trusted home mortgage professional to discuss financing options.

Wealthy Seniors Can Benefit From Jumbo Products

Wealthy Seniors Can Benefit From Jumbo ProductsIndividuals who own their homes with a considerable amount of equity should consider looking into proprietary jumbo reverse mortgages. These can be helpful tools that may allow seniors to either pay down an existing mortgage or fund their retirement. 

These tools are particularly helpful in areas of the country that have high property values, such as California and New York. In these states, jumbo reverse mortgages may provide seniors with up to $4 million in potential loan proceeds. These funds can be applied to a variety of possible purposes.

A Changing Thought Process Surrounding Reverse Mortgages

In the past, mentioning reverse mortgages was seen by many as an option of last resort; however, it seems like this reputation was largely gained because they were new and unfamiliar to most people. Over the past few years, financial experts have done a tremendous amount of research into reverse mortgages and have uncovered their potential to help someone’s financial portfolio.

There are numerous ways that reverse mortgages can help someone’s retirement portfolio ride the ups and downs of the market. Reverse mortgages can even be used to help someone postpone the claiming of Social Security benefits. 

A Potential Use Of Reverse Mortgages

One potential use of reverse mortgages follows a simple formula. The goal of this formula is to buy low and sell high. When the market goes up, draw on the retirement account for income. After all, the market is high, so shares of stocks, bonds, and mutual funds are going to be at their greatest value.

When the market starts to drop, avoid using the assets in the retirement account. Wait for those assets to come back up before using them. During this time, it is better to use a reverse mortgage and draw on the equity in the home instead.

A Mountain Of Untapped Equity

Proprietary reverse mortgages are becoming more popular in locations that have high housing values. In these locations, retirees might be sitting on a large amount of equity and might not even know it. In these locations, jumbo reverse mortgages can help individuals and families who might be short in their incomes. For this reason, retirees should consider using a jumbo reverse mortgage to help cover their living expenses and long-term care needs.

If you are interested in refinancing your property, be sure to contact your trusted home mortgage professional to discuss current financing options.

5 Essential Questions Real Estate Investors Should Ask Before Making An Offer

5 Essential Questions Real Estate Investors Should Ask Before Making An OfferReal estate investing is not only a great way to diversify assets but can also be used to generate both income and capital appreciation. While this is a fantastic opportunity, it is also important to choose investment projects carefully. It is critical to ask the right questions before making an offer on an investment property.

Why Is The Building On The Market?

There is a reason why the property is on the market. It is important to know the answer to this question. Sometimes, the house is on the market purely because the owner is moving for job or family purposes.

On the other hand, there might be an issue with the integrity of the structure. Be sure to figure out the true nature of the building before making an offer.

What Are The Other Offers?

It is important to know the competition when purchasing an investment property. Those who are trying to get the best deal possible need to know what they are up against. Asking about whether a cash offer will sweeten the deal is a great way to garner some additional insights.

What Is The Recent Maintenance?

One of the most common hidden costs in the world of real estate comes in the form of deferred maintenance. If nothing has been done on the property recently, these maintenance costs are going to be passed on to the buyer, hurting any potential ROI. Be sure to ask about any recent repairs or replacements. It’s not unusual for someone to spend a third of the building’s value on repairs.

What Is The Seller Interested In?

Be straightforward and ask what is important to the seller. Some sellers want a quick close. Other sellers want to rent the property back. There are even some sellers who want to leave the furniture behind as well. Ask what the seller needs to offload the investment property.

How Long Has It Been On The Market?

Always check and see how long the building as been on the market. If the building has been on the market for a while, figure out why it hasn’t sold. On the other hand, if the building just landed on the market, there might be more room to negotiate.

If you are in the market for a real estate investment property, a trusted home mortgage professional can be one of your best assets. Be sure to make contact as soon as you are ready to start looking!

NAHB: Home Builder Confidence Near 1999 High

NAHB Home Builder Confidence Near 1999 HighThe National Association of Home Builders reported a housing market index reading of 74 in February; the index reading was one point lower than for January and was only two points below the highest reading of 76 reported in December. Readings over 50 indicate that most builders consider housing market conditions to be positive.

Factors contributing to builder confidence included strong housing markets and low mortgage rates; job growth and higher wages also boosted builder confidence.

Low Inventory Influences Home Prices

Low inventories of available homes continued to drive demand and rising home prices. Homebuyers faced with low supplies of existing homes turned to new home developments for additional options. First-time homebuyers faced obstacles including affordability and student loan debt that negatively impacted the ability to save for a down payment and qualify for home loans.

High costs of building materials and lots contributed to homebuilder expenses and higher home prices. Analysts noted that environmental and zoning issues also presented challenges for builders and limited their ability to meet the rising demand for affordable single-family homes.

Composite indices used to calculate the Homebuilders Housing Market Index slipped one point in each category. Builder confidence in current market conditions for newly-built single-family homes fell to an index reading of 80 and builder confidence in market conditions over the next six months dipped to 79. Buyer traffic volume in new housing developments dropped to 57, but buyer traffic readings of 50 or more were historically rare until recently.

Analysts identified correlations between the Housing Market Index and readings on consumer sentiment. The University of Michigan’s Consumer Sentiment Index and the Conference Board’s Consumer Confidence Index readings trend close to the NAHB Housing Market Index but are reported one month behind the Housing Market Index.

Regional Builder Confidence Mixed

Homebuilders reported mixed confidence in housing market conditions throughout the U.S. Market Conditions improved in the Northeast where homebuilder confidence was five points higher at 67. The Midwestern region reported a builder confidence reading of 62, which was five points lower than January’s reading. Homebuilder confidence in the South rose two points to an index reading of 79; homebuilder confidence fell four points in the West to 82.

Regional builder confidence levels reflect local economic conditions and events impacting housing markets.

 

The Impact Of The New Housing Construction Boom

The Impact Of The New Housing Construction BoomNew housing construction starts reached a record high in December 2019 going up 16.9%. This represents a seasonally-adjusted annual rate of 1.608 million homes last December, which beat the record set in December 2006, 13 years ago, according to CNBC.

This was surprising news, as predictions made before the end of the year were that housing starts in December would reach only 1.375 million homes.

Experts say the current housing construction boom in the United States gets its support from the easy mortgage financing available and positive consumer expectations about the economy.

What Does The New Housing Boom Mean To Buyers And Sellers?

It is a wonderful time to be a home builder, except that builders are experiencing a shortage of construction labor and less availability of low-priced building lots. Nevertheless, there are plenty of interested buyers, especially for modestly-priced starter homes that very desirable for first-time homebuyers.

If you are one of these interested buyers, then, make sure you stand out from the crowd. Be sure to get your credit history in order so that any mistakes are corrected. Get pre-approved for a loan commitment in writing to be the most attractive buyer to a home builder. You may also have to be patient while waiting for your new home to be built. Put your deposit down and then allow extra time for the process to complete. Builders are extremely busy right now.

Consider Renovating For Resale Value

If you are thinking of selling your home, consider making renovations to bring it up to high-quality standards in a “like new” condition. Many buyers who are paying a premium for a newly constructed home will also consider a newly renovated one. Work closely with your REALTOR® to make sure your renovations have the best chance to add value and increase the resale price.

The Boom Areas

Housing starts were up about 40.8% in December when considered on a year-on-year basis. Single-family homes are the largest portion of the housing market. Those new housing starts increased in the Midwest and the South while decreasing in the Northeast and the West. The Midwest and South are seeing revitalized interest in residential home investments after being stagnant for the previous six quarters.

Summary

As we go forward in 2020, homebuilders’ confidence is slowing slightly but still remains close to levels last experienced in the middle of 1999. The housing market, which represents about 3.1% of the total U.S. economy, is doing its part to support the longest economic expansion on record.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

How To Find Places To Buy Rental Investment Properties

How To Find Places To Buy Rental Investment PropertiesReal estate, which is a rental property, has the unique characteristic under the tax code of being able to depreciate it and pretend the asset is going down in value, while, if you are a clever investor, you will acquire property that actually increases in value. Additionally, there are other tax advantages for owning a rental property that can help shelter income.

Positive Cash Flow

The key to success with a real estate investment portfolio of rental properties is to build value while it is self-sustainable. Have the goal of creating positive cash flow from every owned property. Making $100 per month positive cash flow from a single property may not sound like much until you multiply that by 25 properties. A portfolio with those characteristics makes a nice passive income of $2,500 per month or $30,000 per year.

Leverage

Using leverage increases the return on investment (ROI) as long as you choose properties that are cash-positive enough to cover their carrying costs and do not lose value over time. The lower the amount of your money that you invest, the greater the leverage you have and the higher your ROI will be.

Finding Rental Income Property

Commercial rental income property is more challenging so it is best to focus on residential rental properties, especially when starting to build up a real estate portfolio. The things you want to look for when hunting for residential rental properties are a manageable median price for the area, an area that is showing steady annual appreciation in home values, and an area that is stable with no severe negative challenges now or in the foreseeable future.

City Opportunities

It is possible to find properties that are excellent investments in many parts of the United States. Here are some examples of cities that currently have investment opportunities so you can consider them and compare them to your location.

Here are the top ten residential rental markets as ranked by TurboTenant for 2020:

1. Reading, PA

Median Sales Price $140,000 — Annual Increase 11.1% — Average Rent $957

2. District Heights, MD

Median Sales Price $252,000 — Annual Increase 0.4% — Average Rent $1,408

3. Allentown, PA

Median Sales Price $145,000 — Annual Increase 19.0% — Average Rent $1,063

4. East Orange, NJ

Median Sales Price $273,000 — Annual Increase 10.0% — Average Rent $1,534

5. Nashua, NH

Median Sales Price $283,000 — Annual Increase 4.5% — Average Rent $1,524

6. Cincinnati, OH

Median Sales Price $163,000 — Annual Increase 3.1% — Average Rent $1,048

7. Paterson, N.J

Median Sales Price $268,000 — Annual Increase 11.9% — Average Rent $1,614

8. New Castle, DE

Median Sales Price $188,000 — Annual Increase 8% — Average Rent $1,884

9. Rochester, NY

Median Sales Price $136,000 — Annual Increase 5.6% — Average Rent $1,126

10. Hyattsville, MD

Median Sales Price $279,000 — Annual Increase 0.4% — Average Rent $1,982

Summary

It is possible to find cash-flow positive properties in all of these markets, so they are all excellent examples of what to look for when you are hunting for a residential rental property to acquire. Be sure to work with a qualified local REALTOR® who knows the market well that you are considering as well as your trusted home mortgage professional.