Thinking of Buying a Home? This Should Be Your First Step…

…getting a loan pre-approval so you know what you can truly afford (what you should know about the mortgage process.)

(or getting the proof of funds letter from your bank if you are not taking out a loan – cash buyer).

 In many markets across the country, the amount of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach. Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

What you should do (and not do) when applying for a loan.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

Four Reasons to Buy Real Estate This Fall

4 Reasons to Buy This Fall | Keeping Current Matters

It’s that time of year; the seasons are changing and with them come thoughts of the upcoming holidays, family get-togethers, and planning for a new year. Those who are on the fence about whether or not now is the right time to buy don’t have to look much further to find four great reasons to consider buying a home now, instead of waiting.

1. Prices Will Continue to Rise

CoreLogic‘s latest Home Price Index reports that home prices have appreciated by 6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.5% a year for the next 5 years. The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Remain at Historic Lows

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained at or below 3.5% for 13 consecutive weeks. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by this time next year. Any increase in rates will impact YOUR monthly mortgage payment. A year from now, the percentage of your income that you spend on housing will increase substantially if you choose to wait.

3. Either Way You Are Paying a Mortgage

Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage – either your mortgage or your landlord’s. As a paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does–as Americans intuit–end up making more financial sense than renting.”

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.

 

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Coldwell Banker History

As the first national company to launch a website, the first to have streaming video and the first national company to offer buyer and seller guarantees…Coldwell Banker continues to lead the way.

Click play on the video below to learn more.

Gorgeous Palos Heights Home For Sale

464 Shadow Creek Drive, Palos Heights, Illinois. Listed at $599,000.

Click play to view this home:

 

Five bedrooms total – two in finished basement! Absolutely beautiful home with a picturesque setting overlooking pond. This great property boasts a very open floor plan with a gourmet kitchen with granite, stainless steels appliances, hardwood floors, five bedrooms, five baths, including a master suite with Whirlpool and separate shower, dual furnace and air, wonderful finished basement with theatre, two bedrooms and bath. Stunning backyard with waterfall, paver patio and an in-ground pool to enjoy!

shadow-creek-pond-20160816_145928  shadow-creek-pool-20160816_150413 shadow-creek-pool-2-20160816_150319  shadow-creek-20160816_151017

For more information, click here.

 


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Ready to Make an Offer? 4 Tips for Success

Ready to Make an Offer? 4 Tips for Success | Keeping Current Matters

So you’ve been searching for that perfect house to call a ‘home’ and you finally found one! The price is right, and in such a competitive market you want to make sure you make a good offer so that you can guarantee your dream of making this house yours comes true! Freddie Mac covered 4 Tips for Making an Offer” in their latest Executive Perspective. Here are the 4 Tips they covered along with some additional information for your consideration:

1. Understand How Much You Can Afford

“While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”

This ‘tip’ or ‘step’ really should take place before you start your home search process. As we’ve mentioned before, getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and will allow you to make your offer with the confidence of knowing that you have already been approved for a mortgage for that amount. You will also need to know if you are prepared to make any repairs that may need to be made to the house (ex: new roof, new furnace).

2. Act Fast

“Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.”

According to the latest Existing Home Sales Report, the inventory of homes for sale is currently at a 4.7-month supply. This is well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream home. Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as soon as possible.

3. Make a Solid Offer

Freddie Mac offers this advice to help make your offer the strongest it can be:

“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”

Consider ways of making your offer stand out! Many buyers write a personal letter to the seller letting them know how much they would love to be the new homeowners. Your agent will be able to help you figure out if there are any other ways your offer could stand above the rest.

4. Be Prepared to Negotiate

“It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford. Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”

If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home. If the inspection uncovers undisclosed problems or issues, you can typically re-negotiate the terms or cancel the contract.”

Bottom Line

Whether buying your first home or your fifth, having a local real estate professional who is an expert in their market on your side is your best bet to make sure the process goes smoothly. Happy House Hunting!

 

New Construction Numbers: Now Versus 2005

 There is some thinking that the pace of the housing recovery is unsustainable and that we may be heading for another housing bubble. However, Jonathan Smoke, the Chief Economist of realtor.com explains the basic difference between 2005 and today:

“The havoc during the last cycle was the result of building too many homes and of speculation fueled by loose credit. That’s the exact opposite of what we have today.”

If we look at the number of new single family housing starts over the last 30 years, we can see that the numbers of housing starts during the current recovery (2012-Today) are still way below historic averages, and are far less than the numbers built during the run-up to the housing bubble (2002-2006). New Construction Numbers: Now Versus 2005 | Keeping Current Matters

 

A single family housing start is defined as “the number of permits issued for construction of new single family housing units. Housing starts are an important economic indicator due to its extensive spill over benefits for the other sectors of the economy (retail, manufacturing, utilities).”

Bottom Line

Current demand for housing actually calls for more new construction to be built – not less. We should at least return to historically normal levels.

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