Here are four great reasons to consider buying a home today instead of waiting.
- Prices Will Continue to Rise
The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 10.5% (most pessimistic) and 25.5% (most optimistic).
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
- Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have started to inch up, most experts predict that they will begin to rise even more over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by this time next year.
An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
- Either Way You are Paying a Mortgage
As a recent 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.”
- 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 it is time to buy.
If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.
With the dog days of summer behind us, fall is the perfect time for home maintenance.
A few weekends of work before the weather really turns will help you get ready for winter and avoid any nasty surprises—and big repair bills—the cold might bring.
Here’s your must-do checklist for fall.
1. Gutter Maintenance
Clogged gutters can allow overflowing water to damage walls, spark a rodent infestation and erode your landscaping. Worse, the water can leak through your foundation, causing a flood in your basement.
A minor flood could cost $500 to $1,500 to repair, if you catch the problem quickly. If you don’t, there could be mold, damage to the sheet rock and ruined installation to repair as well, pushing the cost up to $10,000 or more.
To prevent a problem before it starts, clean and repair your gutters early in the fall. Once cleaned and repaired, consider adding a layer of waterproof mesh over your gutters to keep leaves out.
2. Protect Screen Doors
Winter’s harsh weather can rip holes in screen doors or cause the metal to rust. Replacing a damaged screen door in the spring will cost you from $150 for a lightweight model to $225 for a heavy-duty model.
To keep your screen doors intact, remove the door, clean the screen and store it in a dry place until spring.
Scaling your roof to check for loose or broken shingles may not seem like the ideal Saturday, but if left unattended, small problems in your roofing can lead to major leaks during the winter as rain, hail, sleet and snow pound your home.
Professional repairs on a 10-by-10-foot roof cost an average of $630. Save yourself money and make the small repairs now.
4. Winterize Your Pipes
Burst pipes are a costly problem. A non-urgent call to a plumber can cost up to $250, while an emergency pipe repair can cost up to $600. Repairing the damage from the resulting flood could costs thousands more.
In cold climates, you need to winterize your pipes to protect your home. Outdoors, shut the water off to any spigots and drain any remaining water by briefly turning on the spigot. Indoors, locate any exposed pipes that may get cold in the winter. Wrap the pipes in foam or vinyl insulation to prevent freezing.
5. Mind the Gap
Gaps in your window or door frames let in cold air, causing your heater to work overtime all winter long, but these have an easy fix.
Start by running your hand over windows and doors. If you feel a draft, apply weather stripping around the frame to create a tighter feel. Sealing up those leaks can reduce your utilities bills by up to 10%.
6. Call the Chimney Sweep
Your fireplace should be inspected and cleaned once a year, even if you don’t use it much. While a professional may charge up to $350, it is worth the cost.
The most minor potential problem is that the lining of the chimney could crack, costing $2,000 to $4,500 to repair. At worst, the chimney could force carbon monoxide into your home or cause a fire.
7. Test Your Heater
Before the cold sets in, fire up your heater.
After your home starts to warm up, walk from room to room. If you notice cold spots, loud screeching sounds or strange smells, you may have a heating problem.
If the furnace stops working, repairs could cost $325 to $475. And if you wait until the busy season, technicians may raise their prices.
Article From Angela Colley, National Association of Realtors
When buying and furnishing a home, nothing is meant to last forever. Even pricier investments need maintenance from normal wear and tear. That’s why we decided to compile the average lifespan of common household appliances to help you plan for repairs down the road. While materials, construction, amount of use and regular upkeep play a role in the longevity of a product, this below guide is a great way to convince Grandma that it’s time to replace that 40 year old mattress. Also, not a fan of that loud doorbell? You should probably replace it now—it’s not dying anytime soon.
Home owners are investing in their homes once again, according to recent industry surveys that point to a strong rebound taking hold in home remodeling. Home owners also may be seeing higher gains from some of these remodeling projects at resale, according to the most recent Cost vs. Value Report, which reviews the top remodeling projects that offer the highest returns at resale. The Cost vs. Value Report is conducted each year by Remodeling Magazine, in conjunction with REALTOR(R) Magazine.So, which remodeling projects offer the potential for some of the biggest pay-backs at resale? The following mid-range remodeling jobs offer the highest returns.
1. Entry door replacement (steel)
Estimated job cost: $1,137
Return on investment at resale: 85.6%
2. Deck addition (wood)
Job cost: $9,327
3. Garage door replacement
Job cost: $1,496
4. Minor kitchen remodel
Job cost: $18,527
5. Window replacement (wood)
Job cost: $10,708
6. Attic bedroom
Job cost: $47,919
7. Siding replacement (vinyl)
Job cost: $11,192
8. Window replacement (vinyl)
Job cost: $9,770
9. Basement remodel
Job cost: $61,303
10. Major kitchen remodel
Job cost: $53,931
If you’re looking to graduate from first-timer to repeat buyer, you know things are about to get much trickier. Unless you’re a bona fide house collector, you’ll have to sell your home in order to buy anew—adding a whole separate layer of anxiety to what you already know is a stressful home-buying process.
You can do this! If selling and buying simultaneously is the only way to go, here’s what you need to know to make sure both processes go as smoothly as possible.
Know The Market First
Before you start seriously searching for a new home—or put your current home on the market—make sure you have a solid understanding of the housing market in your area (and the area where you’re planning to buy). Is the market weighted toward buyers or sellers?
Only then will you be able to fully strategize. As is so often the case, the best plan of action may differ depending on exactly who has the power.
That doesn’t mean to find one house you like and call it a day: Find multiple suitable options. That way, you’re less likely to find yourself in trouble if your purchase falls through—your newly sold home won’t leave you stranded.
Similarly, make sure to hire an appraiser and price your old home fairly. Now is decidedlynot the time for delusions of grandeur: Two extra months on the market because you couldn’t humble yourself to lower the price means two months you’ll be paying double mortgages. Two very long months…
Plan Your Schedule Carefully…
Should you buy first, then sell—or vice versa? Both have their risks and rewards. Selling first makes getting a mortgage easier, but it also means you’ll need to find a temporary place to live. Buying first means moving will be easier, but it also skews your debt-to-income ratio, making it harder to qualify for a new mortgage—not to mention the difficulty of juggling two monthly house payments.
Whichever option you choose, make sure you’re prepared to accept the consequences: having to store your stuff and rent temporarily, or undergoing the financial burdens of dual mortgages.
… But Don’t Rely On Timing
So even if you’ve planned to sell your home first and are prepared to rent while buying, know that even the best-laid plans go awry—and you might end up juggling both mortgages. Preparing yourself for this (however remote) possibility ahead of time will ensure a smooth transition.
Know Your Financial Solutions
For those who choose to sell first, the process is relatively straightforward other than the additional cost of a rental between homes. However, there is the option of a rent back agreement where you negotiate with the lenders and buyers to be able to remain in the property for a maximum of 60 to 90 days—often in exchange for a lower selling price or rent paid to the buyers. This can relieve some of the pressure of finding a new home, giving you additional time to house hunt.
But if you’re buying first, talk to your Realtor about ways to decrease your financial burden and risk. Here are the two most popular options for buyers:
Contract contingency: Buyers can request that their new home purchase be dependent on the successful sale of their old home. If you’re looking in a competitive market, this may not be a good option; however, if the seller of your intended home has had difficulty attracting interest, this may be a good deal for all parties involved—assuming you can convince them that your home will sell quickly.
Bridge loans: Bridge financing allows you to own two homes simultaneously if you don’t have deep pockets for a second down payment. This option is especially attractive if you’d planned to sell your home first and use the proceeds to buy the second. It functions as a short-term loan, intended to be repaid upon the sale of your original house.
Don’t Let Fear Rush You
If your home has sold but you haven’t found a new place to live, don’t let anxiety push you toward a bad decision. DiMauro usually recommends that his clients pre-emptively plan on a short-term rental “so they don’t feel stressed or pushed into something that they would not normally be interested in,” he says. “They shouldn’t make a purchase because they felt like they were pressured from the time constraints.”
Found the perfect home right on schedule? That’s great. But don’t feel like you have to compromise on things that are important to you just because you need to find a home. Conversely, don’t accept a bid that you feel is too low just because your finances are strained by two mortgages. If you have a temporary apartment set up, you’re less likely to compromise.
Certainly, selling and buying a house simultaneously will be stressful—but carefully considering and planning for the risks and hurdles can mitigate the stress.