Million Dollar Homes The New Normal In Some Markets

Remember when you thought a house worth one million dollars was an exorbitant price paid out only on decadent mansions by the extremely wealthy? Well, those days of thinking are gone and the seven-figure price tag is becoming a new normal in many of our country’s largest housing markets.

According to a report released by Trulia, million-dollar home listings in the U.S. have increased from 1.6% to 3% since 2012, with many of the larger metros seeing an even higher increase.

No surprise California sits at the top of the increase with seven of its cities holding a spot on the list of top 10 housing markets with the biggest increase in million dollar homes and cities in Hawaii, New York and Washington taking the remainder 3 spots.

With over half of homes (57%) valued over a million dollars, San Francisco has the most staggering and dramatic increase considering in 2012 these homes made up less than a fifth of the market. What’s even more astounding is the knowledge that this state is experiencing a housing crisis with ongoing affordability issues. Simple supply and demand may be what’s at play here, but until the growing problem is fixed, more and more low (and even middle) income households will be pushed out of the market.

[image courtesy of Trulia.com]

What Is A Reverse Mortgage?

You’ve finally reached the golden age of 62 and now qualify for a reverse mortgage, so how does this impact you? Well, quite frankly all this means is you have more options, and who doesn’t like having options!

With a reverse mortgage, or a home equity conversion mortgage, eligible homeowners can pull equity out of their homes. Basically, you receive a loan based on your age and the amount of equity you have built up. After your existing mortgage is paid, the remainder of the loan amount is yours to spend; however, you are still responsible for tax and insurance payments.

As the borrower, you are not required to pay back the loan for as long as you live in the home and the loan is non-recourse, meaning neither you nor your heirs are required to pay back more than the sale price of the home.

For more information and details about what a reverse mortgages is, visit https://www.reversemortgage.org/About

Still wondering if a reverse mortgage is right for you? Check out this information from the CFPB to help you make your decision.

Reduce Your Debt-To-Income Ratio

In the wake of the home finance crisis that began in about 2008, obtaining a mortgage is now more difficult than it was before, but knowing the obstacles will help prepare you for buying a home.  Today’s lenders want to avoid the mistakes that bankrupted yesterday’s lenders.  Additionally, Government Sponsored Entities (GSEs) Fannie Mae and Freddie Mac have set much tighter guidelines that lenders must follow.  There are numerous factors considered when determining eligibility for a mortgage, but the three big ones are credit history, income and debt.

The debt-to-income ratio (DTI) is a valuable number that underwriters look at heavily when determining your borrowing ability.  To put it simply, DTI is the amount of debt you have compared to your overall income.  A low DTI shows lenders that you have a favorable balance between debt and income.

There are two main kinds of DTI and they’re expressed as a pair (front-end/back-end).  The front-end ratio indicates the percentage of income that goes towards housing costs (principal and interest, mortgage insurance, property taxes and homeowners’ association dues).  The back-end ratio is the percentage of income that goes towards paying recurring debts, including the housing costs covered in the front-end, plus credit card payments, car payments, student loans, child support, alimony, etc.  AmeriSave, one of the nation’s largest online lenders generally requires a DTI of 45% or lower for conventional conforming loans.

If you haven’t guessed it yet, one of the keys to unlocking the door of homeownership is reducing your debt-to-income ratio.  There are many things you can do to actively reduce your DTI so you can apply for a mortgage.

Increase your income – This might mean working some overtime, asking for a salary increase or taking on a part-time job.  Be advised though, as we mentioned earlier, income verification standards have increased greatly in the new age of lending so be mindful that cash or otherwise non-reported earnings will likely not count toward your “income”; although it could be used to reduce debt to the same effect.

Reduce spending – Review your bank and credit card statements to see where you are spending most of your money.  Cut back on unnecessary expenses and research other providers of insurance, phone, cable and other utilities to see if there are lower-cost alternatives.  Plow those savings into reducing your debt.

5 Ways to Cut Costs and Save

Reduce debt – A high DTI is not necessarily bad if you’re actively reducing debt.  For example, if your income is $2000 per month and you’re putting $1000 towards debts, your DTI is temporarily 50%, but will be reduced to 0% when you’re finished.  If you have any cash saved, you might want to consider paying off some debt.  While credit cards have high interest rates, the minimum payments are typically lower than, say an auto loan. Consider this scenario:

You have credit card debt of $5000 with a minimum payment of $120 and an auto loan with $5000 remaining and a payment of $600.  The $600 per month towards the auto loan reduces your borrowing power by $100,000, so you may want to consider using the savings to eliminate the auto loan and continue paying monthly towards the credit card.

If you plan on paying off any debts in full, ask the creditor the date they report to the credit bureaus, then apply for the mortgage after your account has been updated, revealing less debt.  You can also track changes to your credit report with free services like Credit Karma.

Check out our post on easy ways to save money!

Millennials Set To Take Up The Mantle As Largest Generation Of Buyers

Millennials have surpassed Baby Boomers as the largest living generation, but their buying priorities are vastly different than their elder counterparts were at similar ages.

Renting vs. Homeownership

Growing up when the housing bubble began to burst and seeing their parents struggle through a volatile housing market hasn’t done much to lend support to the benefits of investing in a home. That, and a seemingly crushing student loan debt crisis has made millennials wary when it comes to where they are investing their hard earned cash.

What does this mean for the economy?

Nothing and everything.

When examining buying behaviors, there are definitely trend changes, but millennials are buying at the same rate as the generation before them; however, where they’re spending their money is the main difference.

Experiences and travel trump tangible materials; i.e. luxury cars and homes.

Many millennials are choosing to either stay at their parent’s homes or continuing to rent instead of jumping into the world of homeownership.

After the Brexit vote, Baby Boomers jumped on refinancing opportunities for their current mortgages. Refinance applications are increasing and surveys are indicating that a large percentage of Americans are in agreement that thanks to record low mortgage rates, now is a great time to make a home purchase, but millennials aren’t biting.

In the midst of a seemingly stable housing market with excellent mortgage loan rates, rentals have continued to climb with 37% of households renting in 2015; the highest volume since the 1960’s.

Key factors to consider

As millennials continue to influence the economy through their spending, the mortgage industry will need to adapt.

In order to maintain a stable housing economy, lenders will need to follow and track trends in order to offer services that attract millennial homebuyers.

Technology advancements should be a key focus. With a generation that is constantly connected and looking for virtual convenience, online services will be highly sought after.

5 Reasons To Consider Using A Real Estate Agent

Acquiring a house is one of the biggest financial purchases you will make, and navigating the steps to homeownership can be confusing and a little intimidating; even more so if you are in the beginning stages of finding your first home. Would you leave such a big decision and financial burden to chance in the hopes that everything might turn out ok? I didn’t think so.

Asking for help from an expert is one of the best decisions you could make. Still not convinced? Check out our list below of the top 5 reasons why we believe you should consider using a real estate agent.

They know what they’re doing

Like any other professional, real estate agents are trained in what they do. They spend time educating themselves and staying current on market trends as well as key information that your internet search won’t teach you.

They save time

Having a real estate agent may save you a massive amount of time. For those busy managing their families and working, taking care of all the responsibilities that comes with selling, moving or both, may be a bit overwhelming. An agent can schedule open houses and find potential homes that fit your needs and budget.

They help decrease your stress

Home buying and selling is stressful, but having an agent may take off some of the pressure. They stay on top of the paperwork and incoming inquires.

They are your advocate

The home purchasing and selling process can be an emotional one, and when emotions are high buyers and sellers communication can get interesting. A professional middleman can address concerns  for all parties in a way that’s effective and protects the interest of their clients.

They work on a deadline

Sticking to a timeline is difficult with a professional, imagine going at it alone. Real estate agents are able to take your time frame into account and do their best to get the work done within those parameters.

AmeriSave Advantage

AmeriSave realizes the importance of connecting our clients with a network of professionals that can cater to their needs.

The AmeriSave Advantage program is designed to help customers in the home buying process by giving them access to a network of local real estate agents and providing them with a client coordinator who acts as a liaison between them and agents to ensure a smooth process and answer any questions.

Another added benefit of using AmeriSave Advantage is the possibility of receiving a cashback reward based on the purchase/sale price of the home. For example, a customer purchasing a home for $300,000 could receive a reward of $1,300. *

For more information on AmeriSave Advantage, click here.

*The program is not offered in all states and some states may have restrictions on the reward.

Landscaping Ideas That Can Make Your Home More Secure

As crime rates in major cities increase, finding clever ways to increase your home’s security is not only shrewd but necessary.

Using landscaping in a way that deters would-be burglars could keep you and your property safe. Simple design concepts will help give your home a polished look that doesn’t take away visibility or aesthetic appearance, but can dissuade perpetrators.

Check out these landscaping ideas below:

1. Plant thorny bushes

These pointy shrubs can give your home added security when strategically placed around windows and points of entry.

2. Prune your hedges

Don’t let unkempt vegetation give potential intruders a place to hide.

3. Trim trees near your home

Trees with low hanging branches that reach toward your upstairs windows could offer access into your home. Cut branches and leave distance between your trees and windows.

4. Light things up

Motion sensor lighting and accent lights can add to your homes décor and security.

5. Use gravel

Stealthy footsteps are all but impossible when one must walk across gravel pathways.

Historically Low Rates Continue To Increase

Mortgage rates slowly continue to creep up but that’s not discouraging borrowers from purchasing homes. In fact, due to historically low mortgage rates, home sales are increasing at a pace we haven’t seen since 2008.

According to data, the 30-year fixed- rate mortgage increased to 3.48% from last week’s 3.45%, and the 15-year fixed- rate mortgage increased to 2.78% from last week’s 2.75%. The adjustable rate mortgage remained the same at 2.78%.

Even with the slight increase, mortgage rates remain low and now is still an optimal time to purchase or refinance a home. Speak with a professional adviser and check out our page at www.amerisave.com to view today’s rates and get your mortgage quote in minutes.

Check out our post: Refinance applications drop as purchase applications rise 

Is It Time For Back To School Shopping Already? Let’s Hear It For Tax Free Weekends

Summer break is quickly coming to an end and kids are begrudgingly preparing to head back to school, which only means one thing; its back to school shopping season!

Fortunately for some, many states offer tax free weekends on school supplies, clothing, shoes and more. We’ve got the list below!

Chart courtesy of https://dealnews.com/features/when-are-state-tax-free-weekends/

State Dates Eligible Items / Max Cost
Alabama August 5 – 7 Clothing: $100 Computers: $750 School supplies: $50 Books: $30
Arkansas August 6 – 7 School supplies: No limit Clothing: $100 Clothing accessories and equipment: $50
Connecticut August 21 – 27 Clothing and footwear: $100
*Florida August 5 – 7 School supplies: $15 Clothing: $60
Georgia July 30 – 31 Clothing: $100 School supplies: $20 Computers: $1,000
Iowa August 5 – 6 Clothing and footwear: $100
Maryland August 14 – 20 Clothing and footwear: $100
*Massachusetts August 5 – 6 Clothing and footwear: $100
Mississippi July 29 – 30 Clothing and footwear: $100
Missouri August 5 – 7 Clothing: $100 School supplies: $50 Computer software: $350 Computers: $1,500 Computer peripherals: $1,500 Graphing calculators: $150
New Mexico August 5 – 7 School supplies: $30 Clothing: $100 Computers: $1,000 Computer equipment: $500
Ohio August 5 – 7 Clothing: $75 School supplies: $20 School instructional material: $20
*Oklahoma August 5 – 7 Clothing: $100
**South Carolina August 5 – 7 Clothing and accessories: No limit School supplies: No limit Computers and accessories: No limit Bed and bath items: No limit
Tennessee July 29 – 31 Clothing: $100 School supplies: $100 Computers: $1,500
Texas August 5 – 7 Clothing and footwear: $100 Backpacks: $100 School supplies: $100
Virginia August 5 – 7 Clothing and footwear: $100 School supplies: $20
*Indicates states containing links to legal documents with details on Sales Tax holidays

**Indicates states that still have to confirm tax holidays for this year

***States not participating in Sales Tax Holidays are Arizona, California, Colorado, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts. Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York. North Carolina, North Dakota, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

Refinance Applications Drop As Purchase Applications Rise

The post-Brexit refinance frenzy seems to have leveled off, but that doesn’t mean borrowers aren’t taking advantage of current low rates; purchase applications have started to see an increase.

According to data, refinance applications fell by 1% this week after seeing an increase of 24% over the past 4 weeks, while purchase applications saw a 23% rise compared to last week.

Overall, mortgage borrowing has increased to the highest we’ve seen in the past three years, with many experts predicting a new wave of refinancing and believing that rates will hold steady in coming weeks.

Nothing’s a sure thing in the world of mortgage rates, but the current numbers are some of the best we’ve seen. Head over towww.amerisave.com to view today’s rates and get a quote in minutes.

Things To Do Before Heading Out On Vacation

Vacation season is finally here and families are making travel plans to pack up and get away for quality time with the family. Getting away for a few weeks during the summer is an excellent way to relax and recharge, but don’t forget to take these steps before leaving your home.

Have peace of mind and enjoy your time away knowing that your home will be in great condition when you get back.

1. Get unplugged

Unplug all of your counter appliances and electronics (i.e. televisions, computers, toaster, coffeemaker). This will not only help save energy and reduce your electricity bill, but it’s also a preventative measure for electrical fires.

2. Turn off the water

Returning home to a flooded house is a fast way to undue all of the good vibes and relaxation you experienced during your vacation. Simply turning off your main water supply will eliminate chances of a water catastrophe.  While you’re at it, most water heaters have a “vacation” setting to lower the temperature while it’s not being used.

3. Hire a house sitter

If you can afford it, a house sitter is well worth the expense. This individual will either stay at your home while you’re away or check in at different intervals to pick up mail, water plants and generally just make the house look lived in.

4. Stop your mail

Before you head out for vacation, call your local mail service and put a hold on your mail and newspaper delivery before you leave. An overstuffed mailbox or stacks of newspapers on your curb is a tell-tale sign to home invaders that your house is unoccupied.

5. Use or get rid of perishable foods

Depending on how long your trip is, your food may spoil and go bad before you return, and coming home to smelly rotten food is never pleasant. Plan on not going to the grocery store the week before your trip and just eat what you already have.

6. Park your car in your garage – ask neighbor to park in your driveway

Leaving your car unattended for a period of time, even parked in front of your home, is just asking for shattered windows. Having a neighbor park in your driveway gives the illusion that someone is coming and going and therefore the house is occupied.

7. Don’t leave your spare key

Leaving a spare key under your front door planter or mat is not a wise decision when you are planning on leaving your home unattended. Instead, give your spare to a trusted neighbor or family member.

8. Purchase automatic light timers

Another inexpensive way to keep your home looking lived in is to purchase light timers. Schedule them to come on and off at periodic times throughout the day.

9. Be careful what you post on social media

We all love to post pictures and updates of the exciting things going on in our lives, and what’s more exciting than getting away for a relaxing vacation. Just be careful with the information you are putting out there, most times, that information is accessible to any and every one. Instead of posting your vacay itinerary, share pictures with your friends and family after the fact.

10. Clean the house

After a fun time relaxing on a beach enjoying your summer getaway, the drive or flight back home can be brutal. The only thing that could make the experience worse is coming home and having to clean. Plan ahead and clean your home before you leave, that way you can come home to a clean home and all you have to do is jump into the bed and continue your relaxation!