Buying a home can be intimidating if you are not familiar with the terms used during the process.  To help navigate you along the home buying maze and to help you gain confidence in the process, I have compiled a list of some of the most common terms used when buying a home:

Appraisal - A professional analysis used to estimate the value of the home.  It is a necessary step in validating a home's worth to you, as the buyer, and your lender to secure financing.  An appraisal fee is usually paid to the buyers mortgage company at the time of a buyers mortgage application after the buyer has a signed contract on the home.  Your lender will order the appraisal on your behalf.

Closing Costs - The cost to complete the real estate transaction.  Outside of your inspection fees, mortgage application fees and appraisal fees, most of your closing costs are paid at the time of the closing of the home purchase and include: points, taxes, title insurance, inspection fees, financing costs, and prepaid or escrowed fees.  You can ask your real estate agent and lender for a complete list to the closing cost items.  Now, although closing costs may be high in our area, the good news is that a seller can also assist a buyer by paying a portion of their closing costs, subject to the limitations of the buyers mortgage program.  In addition, a family member may provide a financial gift to a buyer, subject to limitations of the buyers mortgage program, that can be used to help pay for the closing costs.

Credit Score - A number ranging from 300 to 850, that is based on analysis of your credit history.  Your credit score helps a lender determine the likelihood that you'll repay future debts, especially your mortgage.  The higher your credit score the easier it will be to get qualified for a mortgage.  In addition, a high credit score could help you secure a lower interest rate.  Now if your credit score is on the low side, there is no time like the present to start improving your score.  There are many options available today to help you improve your credit score so be sure to discuss these options with your real estate professional and lender. 

Down Payment - Down payments are typically 3 to 20% of the purchase price of the home.  0% down programs are available for VA eligible buyers and may be available on for other buyers on a limited or occasional basis.  

Mortgage Rate - The interest rate you pay to borrow money to buy a house.  The lower the rate, the better for you. 

Pre-Approval Letter - A letter from a lender indicating that a buyer qualifies for a mortgage of a specific amount.  I highly recommend that you work with your real estate professional to get pre-approved for a mortgage before you start looking at homes.  This way you know the price range of the homes and areas you should be looking at.

Real Estate Professional - An individual who provides services in buying and selling homes.  Real Estate professionals are there to help you through the confusing paperwork, find your dream home, negotiate any of the details that come up, and to help you know exactly what's going on in the housing market.

Now, the best way to ensure that your home buying process is a great experience is to find a real estate professional who not only puts your family's needs first, but will help navigate you through the complex maze of the home buying process.

You can’t help but see the headlines that report that buying a home today is less affordable than it was at any other time in the last ten years. Now these headlines are definitely accurate for today’s market.  But, have you ever wondered why the headlines don’t say the last 25 years, the last 20 years, or even the last 11 years?

So obviously, buying a home is more expensive now than during the ten years immediately following one of the worst housing crashes in American history.  As you know, over the past decade, the market was flooded with distressed properties (foreclosures and short sales) that were selling at 10-50% discounts.  There were so many distressed properties that the prices of non-distressed properties in the same neighborhoods were lowered and mortgage rates were kept low to help the economy.  

This is what happened in my development which saw a lot of short sales.  These short sales brought down the market value of my home and my neighbors homes in our development and impacted our ability to refinance or sell our homes for a good price.   

Now fortunately, prices have since recovered and mortgage rates have increased as the economy has gained strength.  This has and will continue to impact housing affordability moving forward.

However, let’s put today’s housing affordability into some historical context.  What was housing affordability like prior to the housing crash?  Well for that, we turn to the National Association of Realtors (NAR) which issues their Affordability Index each month.  

In July 2018, the Affordability Index stood at 138.8.  The index had been higher each of the last ten years, peaking at 197 in 2012.  (The higher the index, the more affordable houses are).

But the average Affordability Index between 1990 and 2007, prior to the housing crash, was just 123 and there were no years with an index above 133.  So, as you can see, homes are more affordable today than at any time during the eighteen years prior to the housing crash.

Now, with home prices continuing to appreciate and mortgage rates increasing, home affordability will likely continue to slide.  However, this does not mean that buying a house today in not an attainable goal in most or our local markets as it is less expensive today to buy a home than during the eighteen-year stretch immediately preceding the housing bubble and crash.

One of the questions I get the most right now is what impact will rising mortgage interest rates have on home prices.  The reason I get asked this question a lot is that mortgage rates have increased by more than a half a point since the first of the year.  Mortgage rates are also projected to increase by about an additional half of a point by the end of the year.  Now, as mortgage interest rates continue to climb, some people are starting to get a little concerned that home prices will depreciate.  

However, if you look at what the industry experts are saying, it is doubtful that home values will be negatively affected by the increase in mortgage rates. As Terry Loebs, the founder of Pulsenomics put it: "Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for US home prices.  These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers."

Now, the way I see it, as mortgage interest rates rise, the demand for homes from buyers will likely remain strong relative to the housing shortage which will continue to put pressure on home prices to increase.

June is National Homeownership Month!  Although there are financial benefits to owning your own home, there are many other benefits to homeownwerships.  Here is an infographic that lists what I feel are the top 8 reasons to own your home:

What reasons do you have to own your own home?  Please share them in the comments below.

With deep gratitude, we honor those who made the ultimate sacrifice to this great nation in the protection of our freedoms. We pray for the families you left behind.

According to the 2018 Veterans and Active Military Home Buyers Profile, differences in household composition and financing options incentivize home buying demand for veteran and active military.  The results of NAR Research report revealed quite a few contrasts between active-service military buyers and buyers who have never served.

At a median age of 34 years old, the typical active-service buyer was a lot younger than non-military buyers (42 years old) and was more likely to be married and have multiple children living in their household. Active-service members typically bought a larger home that cost more than those purchased by both non-military buyers and veterans.

When you are in the market to buy a new home, the interest rate you get will greatly impact your monthly housing costs or PITI (Principal, Interest, Taxes, and Insurance).  A higher interest rate will naturally cause the cost of the interest portion of your monthly payment to go up. 

Now in addition to having an impact on your monthly housing costs, your interest rate will also impact your purchasing power.  Your purchasing power is the amount of a home you can afford to buy for the budget you have available to spend.  As mortgage interest rates rise, the price of a house you can afford to buy will decrease if you want to stay within a certain monthly payment range for your housing.

Currently, the mortgage interest rate for a 30 year fixed rate mortgage is 4.61% according to Freddie Mac's Primary Mortgage Market Survey.  In our area, I am still seeing rates around 4.5% lately.  Now although these rates are still near record lows they have been slowly rising since the beginning of the year.  

I am currently working with several buyers who have had to reevaluate their home search criteria.  They are being hit by the double whammy of higher interest rates and higher prices since they started their home search several months ago.  They are currently looking at different areas and types of homes so they can still afford a nice home in a good area.  So they are surely making different housing decisions from when they first started looking for a home.

To show you the type of impact that rising mortgage interest rates can have on a buyers purchasing power, check out this chart: 

The chart depicts a buyers purchasing power if rates rise and a buyer wants to keep their monthly principal and interest payments between $1,850 and $1,900.  As you can see with the highlighted payment amount, at 3.75% interest rate, the buyer can have a monthly payment of $1,852 for a house priced at $400,000.  Now, if the interest rate goes to 4.75%, the same buyer can only afford a $360,000 home, with a principal and interest payment of $1,878, if they want to stay within their monthly budget between $1,850 to $1,900.

As you can see on the above chart, with each quarter of a percent increase in interest rate, the value of your purchasing power will decrease by about 2.5%.  With interest rates predicted to reach about 5% by this time next year, now may be the perfect time to buy a home and get the most house for your money.

When helping home buyers purchase a home, I strive to make the process as stress free as possible.  One of the ways I can accomplish that is to address various concerns and questions that buyers have about the home buying process.  In many cases, buyers hear or read things about the process that may not always be 100% accurate.  Today, I will address 3 common myths or misconceptions which seem to  linger about buying a home.

Myth #1: “That house has been on the market so long I bet we can work the seller down easily.”

Not necessarily. Exceptionally high days on market could mean almost anything. The seller could be bull-headed about their price. The seller may not be particularly motivated to sell for emotional or other personal reasons. Don’t forget: A sales-weary seller isn’t likely to respond to your host of rational reasons why their house should be a bargain.

Myth #2: “I want to look at foreclosed homes because they’re a real bargain and the banks need to unload them.”

Banks, like entrenched sellers, don’t always make decisions which seem rational based on obvious information. You can have a hard time divining the reason a bank chooses to reject an offer for a foreclosed or distressed property, and their decision may be based on financials which seem counterintuitive. The truth is, many distressed sales can be longer and more fraught than regular sales.

Myth #3: “I liked this house a lot, but with this market, I bet it will still be there if I decide to buy it.”

It’s very, very painful to see a client love a home but fail to make a move to purchase that home. If you fell in love with it, why wouldn’t someone else? Just because a property has been on the market a little while doesn’t mean it will stay on the market. The bonus myth in this one? Your “perfect” home is probably going to be a home with some small compromises. If you don’t make an offer on a home, you’re effectively saying, “I’m comfortable losing this home.”

My job as your agent is to represent your interests and do my best to protect you along the way. If you’re pursuing a home purchase in the near future, please get in touch. There are many other ways I can lower your stress and help you find a great home.

There are five key factors involved in determining how long it may take to sell your home.  If you understand these, you'll be more comfortable with the sales process, and better able to make the best pricing and marketing decisions for your home.

• Price: If your home is priced too high when it is first listed, it won't get the exposure it would if it were competitively priced.  A careful review of Comparable Sales in the area will help you in working with me to establish the best listing price for your home.
• Location: This is the single most important factor in determining how quickly, and for what price, your home will sell.
• Condition: The better your home shows, the easier it will be to sell.  Most home buyers do not want to purchase a home which needs repair.  If you take steps to improve your home's appearance (many of which aren't even that expensive) you will improve the chances for a prompt sale.
• Terms: If you are in a position to offer potential purchasers "terms" you expand the number of buyers who could purchase your home.  If you can afford to help the buyer with settlement costs or are flexible with your closing date, please let me know.  If you can afford to help the buyer finance the purchase of your home, be sure to let me know that too.  If you can offer terms, you might obtain a higher price that if you don't offer terms.
• Competition and Market Strength:  If there are a lot of homes similar to yours available, then you may have to lower your price to distinguish your home from other available homes.  If it is a "seller's market" with homes selling quickly, then you may obtain a higher price than if it is a "buyer" market with more homes taking longer to sell.

A seller has control over all the factors above except for location, competition and market strength.  I will work with you to influence those factors under your control to maximize your chances of selling your home for the best price, in the shortest period of time.