The RE/MAX Associates Louisville Real Estate Blog

New Mortgage Rate Update

The mortgage rate for a 30-year fixed rate rose this week. It’s up 4 basis points from this time last week at 3.63 percent. For most of the week it floated around 3.60 percent, until settling on its current spot. It managed to stay flat while fending off central bank movements in Europe and China.

For the 15-year fixed mortgage rate, it settled on 2.82 percent, and for the 5/1 ARMS, the rate is 2.77 percent.  

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Younger Buyers Asking Family and Friends for Down Payment Help

Here’s a fun statistic: The percent of homebuyers who are relying on family members to assist them with their down payment has tripled during the recession, and is still higher than before the housing crises.  21 percent of home purchases were financed by a loan that was a gift by a family member or friend.   The number has fallen to 13 percent in 2014; and was just 8 percent in 2007, which was before the crises.

What this actually shows is a lack of savings from people buying homes today. Having a big wad of cash to put down on a house is typically how you buy one. People today aren’t buying houses like they used to, and part of it is because renting is easier.

In 2014, 25 percent of middle-income earners had help from family or friends with their down payments. Only 16 percent of high, and low, income earners asked their family and friends.

A few other factors keeping young people from buying homes is higher rent, student debts, and little income growth. For the determined, they are asking for help because they still see the value in owning a home, where some do not. A concern with the market is that younger buyers won’t be able to pay their loans back, which is what happened in the housing crisis. There might be some forgiveness with family or friends, but not with banks.

This is why having a personal family bank seems like a good option for the younger generations. Their rents are high, little credit availability, crippling student debt straps them tight for cash, making that 20% quite difficult to obtain. Since home values having been rising, so have the down payments.

Be careful when taking money from a family member or friend, because it can turn ugly quickly if things don’t go as planned. 

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Why You Should Buy in the Fall

The real estate market goes through its hot and cold cycles just like the seasons; they heat up during spring and summer, and cool down during the fall and winter. Don’t let the seasons dictate when you buy though; there are plenty of advantages to buying during the fall.

Old spring homes can be quite the deals in the fall

The ideal time to put a home on the market is during the spring. They are full of confidence and excitement, which often leads to pricing their homes too high. In this case, it’s not common to find the price drop during the summer. If it is still too high by Labor Day, the sellers will have to drop again, giving the buyers the deal they’ve been waiting for. Getting a spring home for a great deal couldn’t be any sweeter.

Fewer buyers in the market

Most families are already in their new home by the start of a school year, which takes out a good portion of the competition. Without majority of the competition, this gives you a better chance, and breathing room. Open houses will be less crowded, and if you really love a house, you can make an offer right then and there.

Motivated sellers want to sell by the end of the year

Sellers usually want to sell by the end of the year for the tax reason. Because they are looking to save some money, they are now thinking of their home as an investment, and want to make the best deal for them possible. Just to be certain, always ask the seller why they are selling and when their ideal sell date is. Be sure to look for the listings that offer benefits for closing before December 31st.

Motivated sellers have their homes listed by the holidays

Sellers cannot stand the idea of their potential sale to be dwindling...

Your Fall Chore List for Winter

It’s that time of year again; fall is officially here and you better clean up your yard now before winter makes that chore a bit too daunting. Yard work isn’t for everyone, in fact, some people actually enjoy it. It doesn’t matter if you love fall chores, or hate them, they still have to be done. Here’s a checklist to make sure you get it all finished.

Compost bin

A compost bin sounds like something hard –working farmers use, but it’s actually for lazy gardeners. These are for grass clippings, branches, and weeds. Mix it up every once-in-a-while and you’re golden. Be sure to use chicken wire to enclose it, or else everything will blow around when a semi-strong wind comes along.

Rake your leaves

Raking leaves is necessary, sometimes. Depending on how many pile up, tells you if you should rake them. No one likes looking at them, but sometimes if they fall in the garden; it turns into a layer of protection for your plant roots. Rake if them they look ugly, and place them in your compost bin, or in your garden.

Gather debris

If you have the ugly trees that just lose random branches when it feels like it, gather them up and toss them in your compost bin. Pick up all those big green balls that fall from the Osage trees too.  Hopefully you don’t have too messy of a tree, but if you do, their waste can serve a good purpose in your garden.

Mow your grass

Cut your lawn for the last time as short as you can to stop diseases from spreading. Put the clippings in your compost pile. Don’t forget to edge too! Once you’ve made your final cut, be sure to winterize your mower and other power tools by draining the gasoline so it doesn’t cause internal...

Time to Check Your Credit Score

If you have a well-functioning brain, you know how important your credit score can is, and how it helps/hurts you. The higher your score, the lower the interest rates you will receive for credit cards, loans, etc. It is becoming even more important than ever as employers and landlords are starting to ask for this information.

Most people do not know their credit score, and it’s something everyone should know. Only one in five consumers check it annually, which shows their payback patterns to banks and other lenders.

For those one in five, they are often surprised by their findings. Sometimes there is an old bill at the bottom of your desk you forgot to pay, and after a few months it was sent to collections and is now showing up on your report.

Even the tiniest of bills that go unpaid can leave a big mark on your credit score.  Unpaid traffic tickets, utility bills, overdue library book fees, and medical expenses are examples of little things that often go overlooked and end up penalizing you in the end, as much as 100 points. For the average life of a 30 year loan, this one mistake could potentially cost you as much as $9,000.

Credit takes quite a while to build, so it is always worth your time to keep a watchful eye on your bills. Check your credit reports regularly at AnnualCreditReport.com. This site allows you one free report each year. When looking at your report, check it thoroughly for false credit card accounts, and payments that are marked as late, but weren’t.

Big mistakes in your report will cost your score significant points, which essentially measures your risk. If your credit scores tanks too low, it could cost you your loan application. If you find an error, notify your creditors and financial institutions immediately.

Delinquencies have the largest negative black mark on your credit score, because your payment history accounts for a significant 35% of your score. Pay them in full!

If you aren’t...

The Ten Most Common Ways to Throw Away Money When Selling

The real estate game can be a strategic battleground for some, depending on how you look at it. If you have more money than you know what to do with, you probably aren’t worried about saving every dollar you can. For the rest of us who are trying to save where we can, this article is for you.

The real estate market can be quite unforgiving, especially when dealing with buyers. Sellers are quite capable of making mistakes that can cost them thousands, sometimes tens of thousands, of dollars. These mistakes are quite common, so educate yourself on what NOT to do to save yourself some major cash.

Not hiring a professional to sell your house

Unless you are a real estate agent yourself, trying to sell by yourself is insane. You might think you know what you are doing, but you’ll likely miss something. Even if your home is quite awesome and you think it’ll sell fast, you still need the guidance of a real estate agent in order to get the best deal.

Not fixing repairs before you sell

If the buyer has to fix a few parts of the house, that’s often times significant money out of your pocket. It costs much less to fix them yourself, than losing that money on closing day. You will probably know what all is wrong with your house when you get an inspection. So do yourself a favor and fix what you can instead of dealing with it the last minute.

Not moving your junk prior to sale

Your junk can easily derail a deal by lowering your equity. With your stuff in the way, the house isn’t able to be seen for what it is. Get rid of it!

Selling your home completely empty

On the other hand the opposite is true. If you try and sell your home completely empty, buyers feel like they’re walking through...

Why a Condo is a Better Option for Millennials

The trend these days for millennials is to rent instead of buy. Buying has become too expensive for some, but rent costs still remain increasingly high. They doubt it buying will be worth it in the long run.

Rent has nearly doubled the growth of wages since 2000, but the benefit to buying a home is the incredibly low interest rates. Some areas of the country are seeing houses that are priced below the pre-recession peak. If you are worth anything, meaning have an entry level job, and decent credit, a condo could be your best option to buy. Buying your first place is always a tense couple months, but here are five reasons why you may want to buy a condo instead of a house.

Still live in your favorite neighborhood

If you still want to live in the middle of the action of your city, it is always more affordable to buy a condo instead of a house. Condos can be extremely nice in the downtown and college neighborhoods, so consider checking them out.

Saving money

There’s a good probability you are paying more for rent than a mortgage and HOA fees would run you. Yes, condos are smaller, but so will the monthly payments. Another benefit of a condo is the maintenance on the place is usually covered in your HOA. These repairs generally are for the outside property, so if it’s a plumbing issue, or anything of the like, that will be your responsibility.

Saving time

Guess what!? No more mowing grass! You can use that time to host cookouts instead of doing yard work. Because this complex is probably communal, snow plows will be provided too!  The major benefit here is that there are little weekend maintenance projects outside.

New friends

If you decide to buy a home out in the suburbs, there’s a good chance...

DIY Staging When Trying to Sell

Technical staging can be the difference between your house selling quickly and sitting on the house for months. We all know staging does help, but which staging projects help the most? Here are the best six projects to do when you are trying to sell your house.

Clean

Dirty homes give the potential buyers the idea that your home isn’t taken care of. If thorough cleaning isn’t one of your skills, then hire a professional cleaning service to clean the hell of the place. Make sure they get windows and light fixtures. Before each showing, take the time to wipe off every surface, window sill, and it wouldn’t hurt to add an air freshener.

Remove personal mementos and décor

Pack up your wedding photos and get them out. The buyer doesn’t want to see your photos, they want to envision theirs. This will also help ease the emotional attachment of the home.

Reduce, remove, and let go

Having too much stuff around the house can bring the size down a bit, and even make it feel overcrowded. Figure out what stuff that is lying around has a specific home or not. Put everything where it belongs. Once everything is out of the way, take back out a few items that make for a good picture, like a nice painting, or a vase. Put the items in rooms you want people to look at, so it’s attracting them. You can also use them to distract from one part of the room. If there’s a low-grade piece of furniture, you can place a rally nice flower in the room to be the room’s attraction.

 New paint never hurts

Having a fresh coat of paint, does wonders for a home. It brightens the room, kills most odors, and makes it feel new. Even touching paint up can make miracles happen, but be careful when trying to match...

What is NOT Covered in Home Insurance

If you’ve got homeowners insurance, you can probably sleep at night. What you may not know, are the things homeowners insurance doesn’t cover. Read this list and know what is not covered. It doesn’t matter if you live in San Francisco which makes you more liable to earth quakes, or not, or in a valley during the rainy season. Mind this little list and start asking your insurance agent to close these gaps to get a better rate.

Flooding- No one thinks it can happen to them, until it’s too late. Ask the people who’ve been affected by hurricane Joaquin and Sandy. Even if you live in a local flood zone or not, fork over the money for flood insurance, because most home ownership insurance doesn’t cover flood. As unlikely as this may be, you’ll be happy when it saves your butt down the road.

Mold – with moisture comes spores, and not just one. Mold doesn’t ask permission to arrive, and where to stay. It goes where it will which is usually in air ducts, and behind your drywall. The truth is everyone has mold, but it is the harmful kind that can be dangerous. Some of the side effects can be skin irritation, sore throat, nasal congestion, and wheezing. These can really have a severe impact on kids. Depending on your mold will determine if you are covered, but if it’s a large amount, and an unfriendly kind, this will be paid for by none other than you.

Sewer backups – Sewer backup damage can be a big pain. This is water damage coming from the ground. Exactly like floods, these aren’t covered by the typical home owner policy. Don’t risk your personal items thinking this won’t happen to you. It happens more often than you realize, so get yourself that extra payment every month and save your butt.

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What is PMI and Mortgage Points

When you begin the process of buying a home, with little debt, and an outstanding credit score, you might qualify out of the 20% down payment. Even if you skip the down payment, they (the bank) will get you somewhere else. It’s best to be ready for it.

One way to compensate for the down payment is to increase the cost of your Private Mortgage Insurance (PMI). When you come into the bank to essentially buy mortgage points and walk out with a lower credit score, this whole process might begin to take a turn to the unknown.

So before you sign your name, be sure to completely understand how these two concepts actually work.

What is PMI, and how that no, or low, down payment will cost you

The mortgage company makes you get insurance to protect them if you happen to default on your loan. Typically you will have this insurance until a specific date, or until your loan reaches somewhere around 78% to 80%. This is how the lender will benefit if you do in fact default.

The cost of the insurance is based on the size of your down payment and your credit score. It can also be anywhere from 0.03% to 1.5% of the total loan amount. For instance, if you borrow $200,000 with a 1% PMI rate without a down payment that will cost $167 a month. 

PMI insurance used to be tax-deductible for certain tax bracket which would diminish the impact of this cost. It’s possible the current tax deduction on mortgage insurance payments will be extended, but don’t take it for granted.

Even though you’ve reached that magic number to stop [paying PMI, it doesn’t just go away. You must request the cancellation in writing and have paid your payments on time. You might also be forced to pay for an appraisal to prove the value of your home, or show proof there are no liens your house.

If you meet all those requirements, your lender must cancel the PMI.

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How to Appeal to Buyers in Today's Market

Today the home buyer’s trend is to be on the hunt in early spring and in hopes to find a home during summer and be moved in by fall for the school year. Because of this, a good portion of home buyers will not list their homes during the winter holiday seasons.  They also want to have the warm weather showcase their home in its best light.

This trend was predominately for families, but today’s buyers are mostly millennials and empty nesters.  They don’t typically care about school schedules, willing to search and buy in the winter months.

So if you have a home to sell, fall is an excellent time to list it. There will be less competition, and could even put the cards in your favor.  Here is how you will appeal to the two types of home buyers during the fall.

Advertising your home to millennials

Millennials are never “turned off”. With how connected they are to the world, they are always on the hunt. They can spend every day of the week looking for a perfect listing. Keeping your home in perfect shape is essential to appeal to them in fall.

Because they tend to be a bit “entitled”, millennials won’t wait for an open house and will be preferred to have a private showing during their time.

TO help yourself you will need great photos online the minute it goes to market. Nothing is more heart breaking to them than finding a great house that doesn’t have any pictures. Millennials are a visual group, so make sure you don’t skimp on the photos and hire a great agent. Good photos can get your buyer in the door. Give them what they want.

Marketing to empty nesters

Empty nesters are a bit older than millennials usually, who take their time on buying a house. There’s no need to rush them. Typically they are looking to downsize, which often means they are trying to sell...

Low Budget Ideas for Your Own Space

Have you ever wanted your own “man cave”, but don’t have a basement? I don’t literally mean a cave where only men can relax and threw a few back. I am talking about your own personal sanctuary where you do whatever helps you relax. Whether it is going in to read a book, make some pottery, have a beer or two, or whatever it is you do to escape the day.

Whether you already have a shed, or are building one, you will find all the ideas of how to remodel them and make them truly yours.

Go vintage – if you have an affinity for old classics, an old airstream type of thing should work. Painting it will give it a feel that it’s yours. Don’t be boring with the paint either, spice it up with multiple colors.

Hang it – Having a wall(s) that you can hang anything to would be quite helpful. Hanging corkboard inside is what I am getting at. There are a plethora of options with corkboard, like hanging fabric so it looks like a wall, magazine clippings of the workout you want to start. The beauty of this is, once you get tired of what is up there, taking it down is much easy than repainting.

Go green – Who doesn’t like plants? Plants can make any room feel a bit homier. Plus, they also look good! Be sure to get the low maintenance plants or else they will become a pain.

Go outside – get a few lawn chairs and put them outside. Maybe while you’re painting someone will come and join you. Adding curb appeal will add another element to your shed.

Do the ceilings – Hang up flags, Christmas lights, drapes, etc. Hanging various things in a room helps to make it feel bigger.

Look out...