The RE/MAX Associates Louisville Real Estate Blog

Flipping Homes Like It's 2006

Once again, the practice that led to the mass buying of homes before the great collapse is happening like before.
People who buy homes to renovate them and sell them quickly are known as home flippers. A flip is most widely known as a home that is sold twice within a calendar year. They accounted for nearly 6% of the US home sales in 2016; but before the crash in 2006 they made up 7.3% of us homes sold.
The practice of flipping homes has been making a comeback in the cities that were hit hardest by the foreclosures.
Flipping homes has become popular again since the prices of homes have risen. On the other hand we don't exactly know if it is a good thing considering what happened before.
 In the past some local housing market investors were able to bid up the price in almost a frenzy. When this happened flippers overran the market competing with buyers who also needed a home to live in, limiting the availability of homes.
Flippers also provide a positive service to the industry by investing in homes that desperately need improvement. They are turning homes quickly and making the necessary repairs without riding the price appreciation.

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Needing A Buyer's Agent When Buying New Construction Homes

Buying a construction home seems easy enough right? One would think it only consists of picking out the floor plan, the lot to build on, and watching it erect. No sellers, repairs, and no drawn-out negotiations right?

It’s not quite that easy, it’s imperative to have a professional when dealing with any real estate transaction no matter how simple the process seems.

A professional agent gives us a sense of security and peace of mind when they are watching over your transaction. There are plenty of reasons to have an agent when buying a new construction home.

Helps you find a reputable builder

An experienced agent is well versed in the market and knows which builders are the good ones. If you are clueless about the market this is where your agent is a huge help. They will know who provides a good product, excellent warranties, and a quick repair time when something goes wrong, and an overall quality house. Knowing you will have a quality house is one less stress in your life.

Go to bat for you

Buying a construction home typically takes a bit longer than buying an existing home. It takes time to pick a lot, choose your floor plan, have inspections, and finally close. There are a few mishaps that can and do arise. Common issues can be construction delays, permit issues, and perhaps financing concerns. A quality agent will make these headaches disappear.

Help review your contract

Buying existing homes is not the same process as buying a construction home. Your agent will guide you through the process while helping you understand what is going on. With everything like money requirements, floor plans, requesting changes, and timelines to keep in mind, it can be overwhelming. Your agent is the party who represents your best interest and makes...

How to Grow Herbs Indoors

How cool would it be to grow your own plants and herbs inside? It would be super convenient to just reach to your window sill and grab a few pieces of parsley or mint to throw in the meal you’re cooking. This simple kind of task doesn’t require a botanist to make happen; growing plants indoors can be quite simple if you know what you’re doing. Here’s everything you need to know to begin.

The best inside herbs

Which herbs do you use most often when cooking? Thyme can be used in soups, mint in salads, cilantro in salsa, etc. What you don’t want to do is limit yourself to herbs that can only be used for cooking. Herbs like chamomile can be used in teas, and lavender perhaps in a bubble bath.

One component to think about is how much of each herb you will need. Mint wouldn’t be used as much as oregano or parsley, so perhaps just one plant will do.

The most recommended herbs to grow indoors are:

  • Oregano
  • Cilantro
  • Mint
  • Lemon balm
  • Sage
  • Thyme
  • Rosemary
  • Chives
  • Parsley

Probably thinking what about basil? Well basil is actually a bit difficult to grow indoors for many reasons, like requires more sunlight than most, and needs a steady warm temperature. Basil is just a pain to grow indoors, but it can be done.

How to pot the herbs inside

Few plastic cups plants come in are meant to be their permanent pot, herbs like these need new cups and pretty soon after you buy them. Get yourself a few pots that allow for six inches in diameter.  Drill a hole in the bottom of the new pot, and put a water dish underneath. The potting soil you use should be made for indoor growing and not the dirt from your yard.

The most basic beginner fail is to put several different kinds of herbs in a long pot. Growers...

How To Appeal To Baby Boomers When Renovating

As a big chunk of the American population grows older, the baby boomers are becoming the eldest. They make up roughly 76 million people in the country, and they are at least 50 years-old, or older. Yep, that means they are either about to retire, or are already retired, which also means they are empty nesters (hopefully).

As people grow older they typically tend to downsize because the large house they once raised their kids in, becomes too big and too much work to maintain. One story homes become ideal, as well as less square footage.

Flipping a house that appeals to a baby boomer takes an understanding of what they want. It begins with understanding they want smaller homes with special features like an easy-access shower, or higher seating toilets, etc. When flipping a home to appeal to baby boomers, keep these ideas in mind.

Luxury features

Baby boomers often trade their square footage in for luxury living. Because they have probably found their forever home, they’ll want to make it nice. They don’t mind spending the money on the best of things now.

To appeal to this generation begin with installing real wood or tile floors. Granite or marble countertops will be a huge eye-catch, and you can never go wrong with stainless steel appliances.

More convenience

Baby boomers have paid their dues regarding their home repairs. They’ve put in the hours on fixing plumbing, electrical, etc. issues. They are in search of new; new that doesn’t need a ton of maintenance and isn’t a ball of stress.  

Everyone, not just baby boomers loves a low-maintenance yard, appliances that don’t break, energy efficient windows and doors to keep the electric bills down, and open spaces for the flow of traffic and more natural light. The biggest thing for baby boomers is the single story home. This...

How To Handle Long Distance Moves

Searching for a home locally is difficult enough, but searching for one in another city, state, across the country presents a whole new challenge. As difficult as it is, it’s not impossible. Having the right agent working with the right technology, it can be done with ease. Here are a couple ideas to keep in mind when looking for a home afar.

Do your homework

Using technology to search for a home in another part of the state or country is the best thing you can do for yourself. You know the areas around your current home, but you know almost nothing about the place you plan to move. The internet can tell you what schools, hospitals, restaurants, businesses are all around you, and even how far.

What you want to also look up is the crime rate in your area, the rankings of the schools, and how long a commute to work will be. If you do not have children, this is still something to consider because homes near excellent schools have a great resell value.

While doing your homework, you absolutely need to make sure you search for the area’s best real estate agents. It’s vital to hire an agent who is professional, trustworthy, and experienced with the area you want to buy.

They are your feet on the ground while you cannot be there. This agent is the person responsible for suggesting which neighborhoods you want to live in, what homes are selling for in the area, and basically being your lifeline while you are busy packing your belongings.

Have a budget

It’s often necessary for people to travel to their new location several times before they officially move. There are times where you have to look at neighborhoods and you may find nothing you like, forcing you to come back another time. You could also be forced to come back to pick out appliances, flooring, etc. Unexpected appointments may also arise in which...

Tips For Buying Furniture On A Budget

It takes a special type of person to absolutely love furniture shopping, but for the rest of us, we hate to love it. Through all the prep work like looking through magazines, browsing online, and measuring them to see where pieces fit in your home, there’s still the part of actually going to the store. This is the part that can be a hassle.

First you deal with pushy salespeople, and then you get to try out the pieces you like, and eliminate the ones you don’t. After what seems to be forever just browsing for furniture, the time to actually pay hundreds, if not thousands of dollars is fast approaching.

It’s no secret furniture is expensive, but what is a secret is you don’t have to spend a fortune on all new pieces. Furniture stores have secrets of their own they don’t want you to know about. These secrets once known can end up saving you big bucks.

Call the stores before you go

Furniture stores always have bargains going on. They want to get rid of their inventory as quickly as possible, so they incentivize buyers through constant bargains. Comparing prices in different stores and calling ahead you will surely find a bargain.

Some stores price the exact same piece of furniture significantly higher because they think someone will pay that much, and most of the time they will.

Knowing what you want and calling ahead to several stores will end up saving you time and energy in the long run.

Walk a little farther

Walk the entire perimeter of the store. Hiding in the open, back corners of stores are where the real discounts are. These items have minor imperfections like scratches, rips, etc. Others can be floor models they just want rid of, and are willing to sell it at a huge discount. This is where mega-savings will happen.  

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How to Measure Square Footage

When buying or selling a home one of the biggest factors to look at is metrics, the amount of square footage. As simple as it sounds, measuring square footage can be cumbersome. Few measures are the same, as a lot of home owner’s measure differently. Making a mistake in measuring can severely affect the value of a home.

Worrying whether you are calculating the square footage correctly is nothing to get worked up about, but let’s look at a proper way to measure a home.

Gross living area

The gross living area is what most people think when they hear the term square footage. Here is one way to calculate your GLA.

  1. Loosely sketch a blueprint of the home, and label each room.
  2. Break each room into rectangles, or if it is already square that is ideal.
  3. Do not account for patios, porches, or staircases. These are considered “unfinished areas”
  4. Multiple the lengths by the widths of each rectangle of each room.
  5. Add all the sums together to get the total square footage of the home.

What to include and what to skip

Who said measuring was simple?

It’s common for even finished basements to be left out of these measurements. It wouldn’t hurt to measure it for your records, but an agent will most likely leave that number out.

On the other hand, a finished attic that could house a living body, and with at least seven feet of space between the floor and ceiling can be counted in the GLA. Any other stories in the house that meet that requirement can be added as well.

As an example, let’s say there is a two story home with 1,500 square feet on the main floor, 1,000 square feet on the second floor, and 500 square feet in an unfinished basement, and an additional 500 in a detached garage. If the seller claimed they had 3,500 square feet, they would...

3 Interest Rate Hikes for 2017?

The Federal Reserve made the last interest rate hike for 2016 in December. At the end of the year they hinted that there would be more to come in the coming year, but experts disagree with their hint.

The executive vice president of capital markets of New American Funding, Jason Obradovich, says they won’t be raising rates like they are hoping to.

He says they have tried raising rates for the past few years and only did it successfully once per year, not to mention in the 11th hour (December) of the year. That is the definition of waiting until the very last second to pull the trigger.

One thing is for sure, the interest rate rose for nine consecutive weeks once Donald Trump was elected President. This was some of the most active movement the market has seen in a substantial while considering they hit two-year highs.

However, on the other side the past two weeks have seen rates drop. The hype of the election is what made the rates rise. Every economist knows constant rate hikes would be too much for the economy to withstand over time. The Fed tried hinting this would be the new trend, but the market wasn’t fooled.

Obradovich also thinks the American people could see a tax cut, which has the potential to raise rates and inflation. He doesn’t think there’s any room vertical room left for the rates to go, as the market simply cannot support high rates.

There’s always somebody to argue for the opposite side, and that would be CEO of OwnAmerican Greg Rand. Rand believes the economy is as strong as ever and we have nothing to fear. His argument is that Janet Yellen, the Federal Reserve Chair, is responsible for seeing the dollar reach a 14-year high, saying there is plenty to be confident about in the US economy.

Now is a time to play it conservatively and assume the economy isn’t quite ready to withstand numerous rate hikes this year. It’s better to be absolutely, 100% sure, than risk it on...

Promissory Note vs. Mortgage

Buying a home often times requires a mortgage (unless the buyer pays with cash), and when the buyer gets a mortgage, they sign a promissory note. A promissory note is a legal document state the buyer “promises” to pay back the lender.

Promissory notes are a usual part of a real estate transaction. The information they include includes:

  • The amount owed
  •  The terms of repayment (i.e. Principle, interest, etc.)
  •  The terms of the interest rate, fixed or adjustable
  • Possible penalty for failing to repay
  • The maturity date of loan
  • The names of parties involved

These notes are some of the most important parts of buying a home, but are often made light of and misunderstood. It would truly be a mistake for buyers to not read and fully comprehend what the document they signed details.

What’s the difference between promissory note and a mortgage?

 A good number of American’s think the mortgage is the promise to pay back the loan. They are sadly wrong. The promissory note is exactly that, while the mortgage is the contract that takes effect when payments are long overdue.

Another name for the mortgage is a deed of trust. It basically makes you put your property on the table as collateral in case the borrower defaults on the loan.

When people default on the loan, the lender is legally able to seize the property and sell it as a “foreclosure” in attempt to regain money they lost from lending to the original borrower.

Another difference between the two is the lender physically holds the promissory note until the loan amount is paid off. A mortgage is part of the county land records and remains at the local clerk’s office.

What are the similarities between the two?

Sometimes the terms in the promissory note are also...

Restrictive Covenants for HOA's

When buying a home, homebuyers are faced with the decision if they want to live in a community run by a HOA, aka a homeowners association. These types of homes require participation by its residents. Members must follow the CC&R’s, the covenants, conditions, and restrictions.

All this is is just rules set by the community. This isn’t quite like zoning laws, which are set by the government; these are laws set by the HOA to keep the attractiveness and property value of the homes. Typically, they aren’t anything too restrictive that won’t change your lifestyle, but some can be annoying if they are too picky. Other times it can be beneficial if your neighbors are a bit “rough around the edges” and prefer tacky yard ornaments.

Some of the more common rules HOA’s set in place are:

  • Specific vehicle parking places, and recreational vehicle storage.
  • Limiting colors for exterior paint on houses.
  • Types of fencing allowed.
  • Limiting the yard decorations, sporting equipment (basketball goals, soccer nets, etc.) and recreational appliances (hot tubs).
  • Limiting types of window treatments allowed.
  • Limiting the type of security lights attached to your house.
  • Pet restrictions (breed, weight, leash, etc.)
  • Rules on commercial or business uses of property for residents.

Many people see these lists as a giant sign if things you cannot do, but if they turn it upside down and look at it differently, they may be surprised at what they see.

HOA’s can be a great thing. They can maintain living standards among its residents that keep the community looking sharp and like new. They stop the unruly residents from taking over and making the neighborhood what they want it to be. Maybe a neighbor wants to park his Winnebago on the street for a few months. Well the HOA won’t let that eyesore sit there months on end because it’s simply ugly and gets in the...

Home Prices Grow Over 7% in November

Corelogic shows home prices aren’t slowing down based on November’s market growth by 7.1% in 2016 against November of 2015. This is a continuation from the prior month which showed a 6.7% growth, which even factored distressed homes.

 This kind of growth hasn’t been seen since May of 2014. Corelogic believes home prices are rising because of the low inventory, and mostly because Donald Trump winning the election.

Per month, home prices have risen over 1.1% since October 2015 to October 2016. The historically low mortgage rates triggered demand, and the for-sale homes inventory being low led to the rise in home prices.

Prices in 27 states have seen their average home price above the peak pre-crisis levels, and don’t show any sign of slowing down.

The peak of index home prices was in 2006, and right now we are just 4% below that magic number. It’s expected to far surpass that number by the end of 2017.

This New Year we are expecting prices to rise by 5%. This is on the assumption that inventory levels rise as needed, which will put the pressure on the market to raise prices.

Corelogic has come up with these numbers based on their market analysis.

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10 Tips to Winterize Your Home This January

Winter hasn’t really hit yet in Louisville, so our homes haven’t been affected by the weather much. Winterizing your home is important to keep all your appliances working smoothly and save some major bucks. One of the most important areas to maintain is your furnace. This area may scare some people because they know nothing about it, in which case they can hire a professional to take care of it; or it can be done by the home owner.

Clean and repair air ducts

Having the right tools is over half the battle, and when you’re that far, the rest is not difficult. Get yourself a high powered vacuum and suck out all the dust inside. If you happen to see any breaks in the ducts, seal it with the appropriate material and wrap the area with foil tape.

Clean the furnace

If you can still find your furnace owner’s manual, look how to clean it. The object here is to clean out any dirt and dust in specific parts, and lubricate the parts that move. It’s as simple as that.

Replace the air filter

This one is as easy as it gets. Take out the old air filter every couple months and replace it with a new one (arrow side up) and that’s all you have to do.

There are other areas of your house to take care of during winter besides your furnace. These helpful tips will save you some money on your energy bill.

Add insulation

Most homes lose their heat through the roof. Handy homeowners can easily put a few rolls of insulation up in their attic roof to keep some heat in. Otherwise, a professional can give provide a quote and perhaps even do the work.

Inspect exterior doors and windows

Look at all the caulking on the doors and windows outside...

Bad Habits Homeowners Need to Break For 2017

Well it’s the end of the year again, and you know what that means; time for New Year’s Resolutions! Instead of doing what everyone says they’ll do like lose twenty pounds, or travel more, etc. we are taking a real estate approach.

Throughout the course of a year a home can endure a lot of abuse. The cracked tile, a leaky pipe falling to the ceiling, etc. can eat a chunk out of your finances when it’s time to sell. In order to not lose that money, homeowners need to be responsible and be good to their property by taking on regular maintenance and routine projects to upkeep with the house.

But with time, and breaking a few bad habits, you can save a decent amount of time and money.

“If it’s not broke don’t fix it” – mentality

Completely wrong; all appliances, furnaces, hardwood floors, and paint, need regular maintenance. The exterior of homes need a new paint job every five years even if it doesn’t look like it needs it system filters need to be replaced or cleaned monthly.

What you can do instead is read maintenance instructions whenever you buy or install something new. Household items tend to work best when they are taken care of as instructed by the manufacturer.

 Don’t hang dry cleaning on door knobs

Everyone is guilty of hanging clothes on door handles. Sometimes people go beyond clothes and hang purses, gym bags, and things of the sort. This can actually put a lot of pressure on the door knob and knock it out of alignment. It’s pretty lazy really, and is quite the eyesore. Instead go to your local hardware store and grab a two headed hook to mount on your wall or door for $2.

Wearing shoes inside

Shoes are dirty and they track in all kinds of dust, germs, and dander into a home. They also leave...

Secrets to Sell Quickly in 2017

The hardest part of selling your home is deciding you are ready to sell it. Timing is also a big part of it too; but 2017 is going to be a good year for sellers. If this isn’t your first rodeo in selling your house you know the process. Find a real estate agent, tidy the house up, take photos, and get the paperwork ready.

With technology today accompanied by today’s uncertainty in the market, it’s important for greenies and veteran sellers to take advantage of the best tips to sell your home quickly in 2017.

Have the right agent

Professional agents should know the market like 2nd grade math. They should know every neighborhood, and if they’re really good, every block. They’ll know which neighborhoods are selling hot, who is moving where, and how to stage a home properly.

Emphasize listing photos

Homes should be represented well in their listing photos. The photos are what draw potential buyers in; so home’s needs excellent photos that catch all the buying eyes. These photos make your home standout.

Consider the latest technology

Professional photographers may not be enough for some edgy sellers. They may use all the bells and whistles, like getting a drone to take a video of the property, or using a 3-D tour throughout the house.

 Going social

Good agents know how to market, and in today’s market the best bet is online. Good agents will not only use the MLS or their website, but all the social media sites like Facebook, Instagram, Twitter, etc.

Freshen the home

The most basic way to freshen up a home is a quick coat of paint. It makes the walls look crisp while giving it a fresh smell. Be sure to...

Pitsfalls to Buying Homes In Winter

Winter isn’t exactly known as the best time to buy a home, but it can be a great time to steal a deal on a home. Be careful though, there are several mistakes that can happen during your winter purchase, so watch out for these.

Too much Holiday debt

Holidays are meant for buying, but be careful not to accumulate too much debt. During your process of buying a home, do your best not to add to the debt you’re already about to undertake. Even if you have good credit, adding to debt through holiday shopping will change your debt-to-income ratio, which could change your monthly payment, or even disqualify you from your preapproval.

Forgetting to see the big picture

Homes aren’t always the most appealing during the winter with their leafless trees and dead lawns. It’s important to visualize what a home would look like during their better months when they have leaves, and the yard is in shape.

Oblivious to closing date delays

Winter home closings are important because there are usually always dates to be paid attention to. There are a lot of concessions buyers ask for that cannot be completed due to too much snow, or too low of temperature. This can pose quite the problem when the closing date is fast approaching. Pay attention to dates, and keep a realistic idea of when repairs can be completed against when the closing date is.  

Making lowball offers

Don’t think you can get whatever house you put an offer on just because the season is winter. Yes, real estate is slow in winter and buyers aren’t offering like they are in summer, but this often means inventory is lower too. So because inventory is lower, so are buyers, and the competition out there isn’t much different.

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Why Are Moving Costs so High

Nobody likes moving, and it can be even more of a hassle when you end up paying more than you originally thought. It’s important to know what you’re getting into when you move. You will need to set yourself a budget, and find an estimate that works best with your price range.

Moving companies give estimates based on the distance traveled and the weight of your possessions. There are also several other factors that can change the price, so it’s wise to know what you’re up against.

Mandatory moving services

What affects your final moving cost the most is the amount of helping hands needed.

Some moving companies offer the entire moving package: packing your belongings, putting them on the truck, transporting everything to your new home, and unloading/unpacking everything. These usually can be quite expensive.

You can save some money by packing your own stuff and getting everything ready to load on the truck.

It will also cost you if you have specific moving requirements like double trips, or crating, etc.

Sometimes there are several ways in which companies may charge extra, and there’s nothing you can do about it. Some of the most common ways companies charge extra are:

  • If the home is difficult for the trucks to reach. There may be a narrow road, or an old bridge that doesn’t allow for moving trucks to drive right up to the door. In this case they would use smaller vehicles bring your belongings to the house from the difficult entrance.
  • If the movers cannot drive right to the front door and have to carry everything a decent distance. If it’s longer than 75 feet, they will most likely add a carry-fee.
  • There’s a charge for going up and down stairs, or waiting at an elevator. These typically show up on the bill as a flight charge, or elevator fee.
  •  If some appliances cannot fit through the doors and must be hoisted through...

5 Ways to Make 2017 Better Than 2016

2017 is fast approaching, and the right way to bring in the New Year is with a plan to make it better than the previous year. Here are five steps you can do to get yourself moving towards a better year.

Donate

As the holidays are getting near and the amount of stuff you seem to accumulate each year piles up, it begins to shrink your living space. It’s time to get rid of the old stuff you don’t use anymore. The best thing you can do is donate it. For the nicer items, you may try putting them on EBay or Craigslist.

Once they’re gone, you will be glad you now have room for all the new stuff you’ve accumulated throughout the holidays.

Set a date and crew to take down decorations

It took hours to put all the decorations up, and it will take hours to take them down. To make this task go smoothly, pick a date and time to get started, and make sure you have a capable crew (family) to help you.

Make sure the crew knows this will likely be an all-day event, and to set a time for everyone to get started. Designate what each member should do; one could take down the ornaments and Christmas tree, one can take down the outside lights, someone could get all the space ready, etc.

When a daunting task becomes a team effort, it doesn’t become such a hassle, and can be completed in a timely manner.

Set gift budgets

One area we don’t pay much attention to throughout the year is how much we spend on gifts for others. Take a look at what you spent on others this year, and set a budget for yourself for next year. Be sure to consider birthdays, Hallmark Holidays, and the seasonal holidays.

Having this budget will allow you to be a better manager of your money, freeing up cash where it’s better served.

 Live...

How to Feel at Home Wherever You Are

You can be at home anywhere you are. If you are renting, couch surfing, vacationing, there’s a way to make wherever you are staying, home.

Home is more than having a place to live, it’s a place where you feel safe and comfortable; and surprisingly; a large number of people don’t have that.   Some people rent, some are always on the road traveling, some move around from base to base in the military, some of us hit hard times and have to crash at a relatives or friends for a while, and some even have to move back in with our parents until we can get back up on our feet again.

Until you find enough cash to buy your own home, there is a way to feel at home. We just need to find our creative side and build our home within ourselves.

Downsize

Many people think their stuff defines who they are. The photos they’ve taken throughout their lives, the 20-year old art piece, and the football trophy from high school, etc. The motto I have found to be quite useful is “less is more” and it has never done me wrong.

It all comes down to what makes you happy. Keeping the things you care about close, and getting rid of the stuff you don’t need. You will find once you de-clutter your life, how much simpler it becomes.

Keep actual pictures

This is an underutilized way of keeping the sense of “you” no matter where you are. Keeping photos of those you love and care about near will always give you that sense of home.

Most of us have our Facebook’s and Instagrams (online versions) of all our photos, but having physical copies of these makes it feel like home. Sure, everything is easier online, but nothing compares to tangible photos.

Enjoy the smell

The smell of home is one-of-a-kind. You recognize it the moment you enter a room, and it creates...

Gov't Cracks Down On Deceptive Lending

When a few California reverse mortgage firms told their customers they could not lose their homes, they made a huge mistake. For beginners, they are dead wrong, and they knew it. They were acting as predators. The federal Consumer Financial Protection Bureau got wind of it and fined several of these California based companies.

One company American Advisors Ground in Orange had to pay around $400,000, while the others paid only $65,000. After they paid their fines they changed their loan disclosures, they still wouldn’t admit to any wrong doing.

The game of reverse mortgages is designed for people who are retired, or getting close to retirement. It gives them money in exchange for equity in their homes, and are allowed to stay in their homes until they die or decide to sell.

The government claimed these groups falsely advertised to its customers they would keep their homes no matter what.

It’s completely possible for borrowers to default on their reverse mortgage and lose their home. Sometimes they have to fail elsewhere in payments too like property taxes, PMI, and even maintaining the upkeep of their home. What happens is buyers take that stack of cash and spend it all and don’t have any left to pay their taxes.

As the growing number of defaulted mortgages grows, the government began requiring more underwriting of borrowers to ensure they can pay their monthly obligations, and to tighten the policies surrounding foreclosures prompted by delinquencies involving the Federal Housing Administration and their insured mortgages.

The companies also implied that these mortgages were federally backed, which is also completely untrue. However, some mortgages are federally backed, but are not a government benefit.

The companies have since revamped their marketing campaigns and made legal compliance a vital part.

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What Is A HOA? How Do They Help?

After months and months of searching you finally find a house that is right on your price point, but it comes with a month fee called the HOA. So what exactly is the HOA fee and what does all that extra cash exactly pay for?

For starters, HOA stands for Homeowners Association. This encompasses all homes like condos, townhomes, or freestanding homes in a planned community. The monthly fee covers the communal areas of the neighborhood.

The reasoning is that everyone living in the neighborhood has equal access to the common areas and is equally responsible for keeping them well maintained. The usual areas everyone gets to use are pools, parking garages, clubhouses, general landscaping, workout rooms, sidewalks, gates, roofs, and building exteriors. The insurance for covering these areas is also part of the monthly payment.   

Of course no one likes paying extra on top of a mortgage payment, but it can actually help save on other maintenance costs. So before you complain too much, think about what it could actually do for you.

How much are HOA fees

For a typical single-family home, HOA fees can cost anywhere from $200-$300 a month, but can vary depending on the size of your unit.

For example, I have a 1,600 square ft. condo in Louisville, Kentucky with a pool, weight room, landscapers, snow removal, and fences, and it is $166 per month. Utilities are not included. One could imagine what a fancy Hollywood community would cost if it offered all services and amenities, probably somewhere in the thousands.

What is an HOA?

Monthly HOA fees are typically split in two parts. The first part goes towards the communities monthly expenses. The second part goes into a reserve fund, or a rainy day fund. These funds stack up and go towards the bigger repairs like new roofs, plumbing issues, exterior painting etc. These also cover the emergency situations like natural...