The RE/MAX Associates Louisville Real Estate Blog

7 New Years Resolutions Homeowners Can Get Behind

The New Year is fast approaching, and we all will have some resolutions to try to uphold. Some are attainable, others we are just flat out lying to ourselves. These new changes don’t particularly need to be life-changing, so here are some simple ones when it comes to real estate resolutions. These are attainable, and will pay you fortune down the road.

Make extra mortgage payments

Chances are we all have mortgages, and that number slowly gets smaller. You are mostly paying interest for the first long-while, but if you can muster up enough cash to make the extra payments per month, your debt will shrink much quicker. This will likely save you tens of thousands of dollars if you can make double payments multiple times per year. Just be sure to tell the loan officer, this extra payment is going towards the principal.

Get a new homeowner’s insurance quote

Insurance renews every year, and you probably didn’t know that or think much about it.  Each year, you could be eligible for new discounts that weren’t originally on the table. Insurance companies won’t be calling you to notify you that you now qualify for whatever discount. Call your agent yearly, and see if you can get an extra discount here-and-there. If not, start shopping for a better policy elsewhere.

Have your home reassessed for tax purposes

Homes get reassessed every few years by whatever county they are in. This means your property value could increase or decrease year to year, but it’s not documented. You could be paying too much in taxes in some cases. Most states allow free online assessment requests. Watch out for scams though, they are typically outside companies offering small assessment fees.

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Why the Mortgage Rates Dropped After the Fed Rate Hike

At the end of the year in December, the Federal Reserve actually increased rates for the first time in almost a decade. Surprisingly, mortgage rates actually dropped when this happened. How’d this happen and will the trend likely hold up for home buyers in 2016?

Immediate mortgage rete reaction to Fed meeting

Majority of U.S. mortgage loans up to $417,000 are pooled into bonds called Mortgage Backed Securities (MBS), and they are traded around the global market. During the course of a trading day, mortgage rates will fall as the price of these MBS’s rise, and vice versa.

On December 16, the mortgage rates rose when investors sold MBS ahead of the meeting that day. While expecting the Feds would raise rates at the end of the year, and not knowing how the Fed might position 2016 rate policy entirely, MBS investors played the conservative card, and sold before the meeting.

Once it was announced that rates were raised, the Fed claimed they would only raise it .25%, and will take a “gradual” approach to tightening the policy from there.

Bond markets didn’t go into a tizzy, but reacted favorably, and MBS buying resumed, pushing mortgage rates down.

Mortgage rate outlook based on revised Fed policy

Markets are predicting this “gradual” approach means raising interest rates four times throughout the year to total the hike at 1%.

The fed Funds Rate is supposed to influence broad rate markets overall, not to directly impact mortgage rates. For example: the last time the Fed lifted fed Funds was from June 2004 to July 2006, hiking a total of 4.25%. While all this was happening a 30-year fixed rate mortgage only rise 0.5%.

If 2016 estimates call for Fed Funds to rise, mortgage rates probably won’t rise by that full amount. However, there happens to be another element...

Best Saving Strategies for Baby Boomers, Gen Xers, and Millennials

If your plan is to save money for the upcoming year, you will need a plan. Your plan will be determined by how old you are, and what strategy best fits your current stage of life. Unfortunately, there’s no one-size fits all, but there are certain strategies dependent on your financial obligations in life.

Baby Boomers (51-69)

As a Baby Boomer, you are part of the huge generation which makes up over a fourth of the American population. You obviously are in better financial shape than generations after you, but there’s a good shot you don’t have a ton saved for retirement. Only 60% of Baby Boomers have admitted to having a sound retirement account. Chances are you don’t have a pension, and have endless questions about Social Security and Medicare.

If you have these endless questions, and little retirement, you probably feel a bit uneasy. You seriously have to crunch now to start saving, or you may have to give up your lifestyle. Here are a few steps to get started.

  • Go back to work
  • Live within your means
  • Accelerate your retirement savings
  • Make sure your investments are spread out, and not all in one place.
  • Consider long-term care insurance

If you happen to be an empty nester, and still providing for kids, start taking care of yourself fist; it’s their turn to go through life on their own.

Generation Xers (36-50)

Most of these Gen Xers were born between 1965 and 1979, and are in full swing of trying to build their careers and families right now. Some are also caring for their elderly parents. Watching and managing your cash flow is extremely challenging, given this is the most expensive time of your life.

What you want to do is pay yourself first. Each payday set aside a portion of your money so you don’t spend it. If you can, have...

4 Numbers That Determine Your Buying Power

Buying a house is a lengthy process, and there is a list of things to consider before signing your name for the last time. While you are sizing up the house, mortgage lenders are looking at a few specific numbers that could paint another financial picture for you. You will want to have a sense of how you stand in these four areas before you even begin your house hunt.

Credit Score

This score is the most basic way lenders analyze you, looking at your creditworthiness, which is your ability to pay back your loan each month. Five factors determine your credit score, with each having its own importance. Here’s how it breaks down: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit (10%).

Having a low credit score doesn’t always mean you don’t qualify, but it does make this more challenging. Your interest rate is also determined by your score, having higher payments for lower scores. On the other hand, having better scores makes payments less expensive.

Down Payment

Cash will remain king even though times are changing. The more money you can put down upfront the more buying power you have in the end. There are many benefits to having the prerequisite of 20% down. Putting the 20% down, or more, can eliminate the need for private mortgage insurance (PMI), and let you be able to negotiate for lower interest rates.

It all comes down to how committed you appear, and how financially ready you are to make a giant purchase.

Debt-to-income Ratio

Having a good steady income is excellent, but it isn’t everything when determined your mortgage qualifications. Lenders are looking for assurance you can pay your mortgage back on top of all the other expenses you have. They will begin looking at your...

7 Incentives for Buy A Home In December

Buying a home in December is uncommon, but not a bad idea. The buying competition is lower; sellers are a bit more motivated, and the tax at the end of the year benefits. If you are in the market and it’s nearing the end of the year, take a look at the benefits of winter buying, call your agent and let him know you want to pull the trigger.

Bargain Prices

December is a month in which people are frantically shopping, and attending holiday parties which aren’t always for home buying. Let this work in your favor – the marketplace with have fewer buyers, and the homes on the market will be priced to sell, and that means less offers to take away from yours.

Motivated Sellers

When homes are on the market in December, there’s a reason. It could be a few reasons; job relocation, financial troubles, changes of circumstance, or just want to move. In any case, this gives you leverage to negotiate a good deal for yourself. Try lowballing them, and see if you can find a closing date that works best for you.

Tax Benefits

Buying a home this year will look good on your bottom line when tax season rolls around. Closing by Dec. 31st means you can deduct property taxes, mortgage interest, origination points of your loan, and interest costs, the entire time building your equity. The money savers are in the deductions during the early years of your loan when you are mostly paying interest.

Vendor Availability

Moving companies are quite slow in December, which lets you book them in short notice. You can also get the prime time moving slots, and request a little extra effort on their part like bringing blankets and packing materials. You can also use this strategy for other services like repair...

5 Home Buyer Incentives

In any market there are sellers who are driven to get it over with, and just want to move. Often times these deals are driven by incentives, which inspire sellers to make their homes more attractive. Some sellers even have to put a little more effort during the slower months when homes don’t move as quickly.

If you are wanting to sell your home, but are concerned it could be a difficult one to sell, try offering buyers something that will be difficult to walk away from. Below are several ideas you might not have thought of, which can be offered from the start, or thrown in along the way to keep the buyer close.

Buying the interest rate down

Very rarely does a home buyer not need a mortgage to buy their house, but for the rest of us that do this one’s for you. Banks look into several factors before loaning money, such as the condition of the market, and when you apply. When you want to get a low rate, you usually will be forced to pay an upfront fee, called a point. Paying this upfront is called “buying down the rate,” and sellers have the power to do this for the buyer too.

Let’s say the bank offers the buyer three percent on a30-year fixed mortgage, the buyer or seller can then pay one percent of the loan amount to receive an interest rate in the ballpark of 2.75 percent. This is lower payments for the buyer, which could save him tremendously in the long run. The savings could be even greater if you have a higher rate on y our 30-year note.

Include window coverings and furniture

Buying furniture if you have none can be quite an expensive ordeal. Some homeowners will renovate their homes, and then pick furniture that best fits their new look. It’s also not uncommon for buyers to offer to buy the furniture inside.

If your home has specific furniture that might not fit well in your new home,...

Your last Minute Real Estate Tax Breaks For Buyers

2016 is right around the corner and so are the taxes that come along with it. Prepare yourself for 2016 by knowing what burdens you’ll have and what real estate tax deductions you can use to save you some money.

In 2015, the senate approved several tax extender bills into 2016. Many tax deductions and credits had expired, and they extended them to roll into 2016 to give us taxpayers a break until the end of the year. The bill they’ve passed makes a few amendments to the IRS tax code, changing what you will owe. Most of these breaks are targeted for special interest groups, but fall upon us as well.

If you own a home, or are looking to close on one, your tax pictures could be different than what you expected for 2016. Here are a few of the tax breaks that could benefit you.

Mortgage debt forgiveness

When a lender writes off any or all part of a forgiven debt, that amount is then passed back to the borrower as taxable for federal income tax purposes. This rule applies to ass debts include home mortgages. In 2007, congress passed the mortgage debt forgiveness act, which called for an exemption.  

The rule called for homeowners who qualified (given they’ve lost their homes) don’t have to pick up their forgiven debt as income on their tax returns. This was only supposed to be a brief law, but has been extended a few times, and they’re debating extending it again into 2016.

Deduction for mortgage insurance premiums

As most markets today are tougher than previously, buyers find that lenders require Private mortgage insurance, to protect them in the case of default. Here’s the thing – as PMI is required, you usually can’t write it off, and unlike the interest you pay on your mortgage. Mortgage insurance payments are typically not deductible for tax purposes.

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How to Bring Green Life Back to Your Plants

Are the plants around your house starting to fade and look a bit old? When’s the last time you dusted it? There are a few things you can do to bring your plants back from the dead, so don’t give up just yet. Your plant is probably fighting for its life, so give it a second chance.

Inspect and clean

Take a quick glance over the plant to make sure there’s nothing eating away at it. Look for little bugs crawling on leaves and the stem. If all is well, wipe the leaves off with a damp cloth. The more sensitive plants should just get a quick shower.

If you have pests try mixing soap into water and give each leaf a good scrub. Googling it too should provide multiple solutions. If the plant is clearly stunted in growth, it’s too late, and it must be tossed.

Trim and re-pot

Even if your plant is in good shape, it doesn’t hurt to trim them and re-pot. Take away all the dead leaves and unhealthy looking branches. Don’t cut too many of the leaves off since that’s their energy source; you should always leave at least 2/3rds of the leaves intact.

Once you take it out of the pot, look for mushy and unhealthy roots; carefully trim those off. If they are tightly wound at the bottom edges, cut the in two a few times. Repot them with fresh potting soil, and leave room for the roots to grow. Be sure to use a pot with draining holes too.

Place in good light

You will want bright and indirect light as your source. Cacti and succulent plants require intense and direct light. Indirect light is a place in your house where it’s naturally light, and you don’t need to flip on a light to read. You can also do the shadow test: hold your hand a foot away, and if you see a blurry shadow, that is indirect light; direct light would be a crisp shadow....

Winterizing Your Home is 7 Steps

Winter is coming whether you like it or not, and staying warm can be an expensive lifestyle if you aren’t careful. Most people turn up their heat and leave it there, which can make your jaw drop the next time you see your heating bill.

If you do not want to shiver all winter, while keeping more money in your pocket, take note of these seven house warming tips.

Buy a programmable thermostat

You can buy these for a little less than $100, and you have options! You can heat your house when you choose. You will want one that has at least four settings, so you can program it to come on during different times of the day. What’s cool about this is you can program it to shut off after you leave work, and turn it on 30 minutes before you get home, this way it won’t be running all day.

Deal with drafty windows and doors

Drafty doors and windows literally suck money out the cracks. Buying a weather stripping kit to seal these open spots can save you bundles. Another option would be to calk the frame around the doors and windows. Also, making your home a bit more energy efficient can add some value to your home too.

Localize the heat source

If you spend most of your time in one room of the house, this is a good idea to keep your heat low and get a little portable heater. Your room will stay toasty while your heating system isn’t working overtime to keep the entire house warm.

Stay away from companies who claim they can lower your bill

If you’ve ever gotten letters in the mail from third party energy savers claiming they can save you money on your heating bill, you should have thrown them away. For one, the money you are saving goes directly to the company you just hired. Energy prices do fluctuate,...

2016 Predictions for Housing Market

2015 was a recovery year in the housing market, and 2016 is predicted to be a year of affordability. Since inner cities are becoming more expensive every year, first-time buyers and young people will be forced to look in the suburbs. They will want to live in a community that’s amenity rich, and often resembling that of a city where they can walk most places. These are mini cities that look like a regular city.

Here are the predictions for 2016 according to Zillow.com

  1. The median age of buyers buying their first home will be a new record. On average, buyers are already three years older than they were in the 80’s.
  2. Because home values are rising, most of the low-income Americans won’t be able to buy a home. The poorest American’s won’t be able to buy a home.
  3. They are predicting rents to soar, and be the highest median price ever.
  4. A lot of people will be moving to the suburbs, changing them into hot popular spots. They will change into looking more like inner cities with everything in walking distance.
  5. We are expecting home prices to rise a solid 3.5%. 
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