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Tuesday, September 30, 2008
Tuesday, September 16, 2008
Real Estate Advisor
What To Do When facing an ARM Reset
The ARM's Race of 2008
This August, some homeowners will be feeling a little more than the usual heat. By the end of this summer, over 300,000 subprime adjustable rate mortgages will "reset" from lower introductory rates to current market rates. The change in rate can equate to a tough-to-stomach bump in monthly payments, especially for loans that feature extra-low "teaser" rates.
The Refinancing Option
Choosing to refinance has two main benefits :
Lock into a Fixed Rate – Why worry about periodic rate resets and rising mortgage rates if you don't have to? Refinancing gives owners the chance to lock into a fixed rate for the long term.
Lower Rates – While current rates are higher than they were a few years ago, from a historical perspective they are still considered low. Most economists believe that national averages of long-term rates will hover within a point or two of 6 percent through the end of the year.
Who Qualifies for Refinancing
Tightening requirements for new home loans have to some degree extended to refinancing as well. The best candidates for refinancing are owners with good credit, income documentation and solid equity in their homes. Refinancing is typically a better option for owners who plan to stay in the home for at least several more years.
Who Doesn't
Owners With Low Credit Scores – In recent years some buyers were able to obtain subprime loans with credit scores in the mid 500's. Owners who haven't raised their credit scores into at least the mid to high 600 range will find it hard to obtain refinancing. Even scores in the high 600's, which in the near past had been considered fairly good, are no guarantee of smooth sailing (Fannie Mae and Freddie Mac announced in the spring that borrowers with rates below 680 will need to pay a surcharge on top of the price of the loan).
Owners With Little Equity – To protect their investments, many lenders have been increasing the amount of equity an owner must have in their home. Many buyers may have purchased their homes with little or no money down, or perhaps opted for an interest only loan. In either case the amount of equity in the home may be below lender's acceptable levels. Homes that have either not appreciated or that have lost some value will be even harder to refinance.
How to Survive the Reset
Consolidate other debt – Consider seeing a credit counselor if you have multiple sources of high-interest debt in addition to your home loan. You may be able to re-structure these into one lower-interest loan, enabling you to more easily make the higher home-loan payments
Cut expenses – While it may not be in our nature, we can often make do with less. Look first for monthly expenses that qualify as luxuries (cable or satellite TV, high-speed internet, etc.). Cut down on meals away from home and look for other ways to shave unnecessary spending from your budget.
Start an Extra Savings Account – Even if you can afford to make payments after an initial reset, the best way to prepare for potential rate increases in the future or unforeseen circumstances is to start setting aside a little additional money, just in case.
Information courtesy of RE/MAX International August Newsletter
The ARM's Race of 2008
This August, some homeowners will be feeling a little more than the usual heat. By the end of this summer, over 300,000 subprime adjustable rate mortgages will "reset" from lower introductory rates to current market rates. The change in rate can equate to a tough-to-stomach bump in monthly payments, especially for loans that feature extra-low "teaser" rates.
The Refinancing Option
Choosing to refinance has two main benefits :
Lock into a Fixed Rate – Why worry about periodic rate resets and rising mortgage rates if you don't have to? Refinancing gives owners the chance to lock into a fixed rate for the long term.
Lower Rates – While current rates are higher than they were a few years ago, from a historical perspective they are still considered low. Most economists believe that national averages of long-term rates will hover within a point or two of 6 percent through the end of the year.
Who Qualifies for Refinancing
Tightening requirements for new home loans have to some degree extended to refinancing as well. The best candidates for refinancing are owners with good credit, income documentation and solid equity in their homes. Refinancing is typically a better option for owners who plan to stay in the home for at least several more years.
Who Doesn't
Owners With Low Credit Scores – In recent years some buyers were able to obtain subprime loans with credit scores in the mid 500's. Owners who haven't raised their credit scores into at least the mid to high 600 range will find it hard to obtain refinancing. Even scores in the high 600's, which in the near past had been considered fairly good, are no guarantee of smooth sailing (Fannie Mae and Freddie Mac announced in the spring that borrowers with rates below 680 will need to pay a surcharge on top of the price of the loan).
Owners With Little Equity – To protect their investments, many lenders have been increasing the amount of equity an owner must have in their home. Many buyers may have purchased their homes with little or no money down, or perhaps opted for an interest only loan. In either case the amount of equity in the home may be below lender's acceptable levels. Homes that have either not appreciated or that have lost some value will be even harder to refinance.
How to Survive the Reset
Consolidate other debt – Consider seeing a credit counselor if you have multiple sources of high-interest debt in addition to your home loan. You may be able to re-structure these into one lower-interest loan, enabling you to more easily make the higher home-loan payments
Cut expenses – While it may not be in our nature, we can often make do with less. Look first for monthly expenses that qualify as luxuries (cable or satellite TV, high-speed internet, etc.). Cut down on meals away from home and look for other ways to shave unnecessary spending from your budget.
Start an Extra Savings Account – Even if you can afford to make payments after an initial reset, the best way to prepare for potential rate increases in the future or unforeseen circumstances is to start setting aside a little additional money, just in case.
Information courtesy of RE/MAX International August Newsletter
Tuesday, September 9, 2008
Sell your house quicker with these helpful tips
Staging home for sale worth the cost
Property will often sell more quickly and for higher price
If you're selling your home, you obviously want to get it sold quickly and for the highest amount possible. One very important strategy to keep in mind is staging, which is simply the process of arranging the inside of your home so that it shows off to its full potential.
Staging plays up your home's good features, such as enhancing a great view or drawing the buyer's eye to some spectacular wood floors. It also helps to minimize some of the home's drawbacks, such as making a small bedroom look larger. But also understand that staging does not in any way mean concealing structural defects, such as hanging a picture over a water stain or putting curtains over a broken window!
Staging allows a potential buyer to visualize what can be done with the home, which is especially important with a house that's currently vacant. For example, some carefully arranged furniture in a room that would otherwise be empty can really help the buyer see the room's potential. And if you're in a neighborhood of tract houses that all look pretty much the same inside, good staging will set your home apart from the others for sale in the neighborhood.
Finally, good staging makes buyers feel at home. It lets them really imagine themselves in the kitchen with friends, or relaxing in front of the living room fire, or even working on their car in the garage.
Remove Clutter
There are several things that go into staging a home for sale, and probably the single most important one is getting rid of all the clutter. No one wants to see several days' worth of mail and newspapers on the kitchen counter, or a kid's bedroom crammed with toys and games. The same applies to the garage, basement and even the backyard storage shed.
Clutter is not just an overflowing magazine rack. It can be too many pictures on the wall, too many chairs wedged around the dining room table, or an oversized sofa that blocks the living room traffic patterns. It can be too many items of clothing crammed into a closet, or too many of grandma's dishes filling up every inch of a kitchen cabinet.
When decluttering the house, stuffing everything into the closet or in boxes in the garage is not the answer. Remember that a potential buyer is looking in every nook and cranny of the house, and an overflowing closet doesn't make much of an impression. Instead, get the clutter completely out of the house. This could be a garage sale, some donations to a local charity, or simply a trip to the landfill. If you still have items that are cluttering up the house but they are things you'll want for your next home, then rent a temporary storage space and move them there.
Let Buyers Envision Themselves There
In addition to removing the clutter to make the rooms feel more open and the closets and cabinets feel more spacious, you want to always have an eye on what things you can do to help the buyers visualize living there. For example, lots of family photos on the wall will make it hard for the buyers not to feel like they're trespassing in someone else's home.
Likewise, while you may be very proud of your religious affiliations, your choice of political ideologies, or your gun collection and the elk head on the wall, remember that not everyone shares your interests. If you can depersonalize the home to some degree, it will make it easier for potential buyers to see themselves making a life there.
Your home should also be absolutely immaculate when you have it on the market for sale. Clean the counters and the cabinets and the fixtures and the flooring and every other part of the house until it shines. Wash the windows, let in the light, and make sure that beautiful view or that inviting backyard is clearly visible when a buyer walks through. A clean house also gives potential buyers more confidence that the structure of the house has been properly maintained and cared for as well.
Hire professional stager
It often makes good financial sense to hire a professional to do the staging for you. A professional home staging company will thoroughly understand the concepts of space and light and color, and they know how to make rooms show off to their full potential. They also don't have the same personal attachment to the home and its furnishings that you do, so they can make practical, impartial suggestions that you might otherwise overlook or simply not want to face.
The cost of professional staging varies with the size of the house and amount of work involved, but a well-staged home should sell quicker and for more money, which makes that upfront expense a wise financial investment.
For more helpful tips and thoughts contact us at 1-800-276-2400
Property will often sell more quickly and for higher price
If you're selling your home, you obviously want to get it sold quickly and for the highest amount possible. One very important strategy to keep in mind is staging, which is simply the process of arranging the inside of your home so that it shows off to its full potential.
Staging plays up your home's good features, such as enhancing a great view or drawing the buyer's eye to some spectacular wood floors. It also helps to minimize some of the home's drawbacks, such as making a small bedroom look larger. But also understand that staging does not in any way mean concealing structural defects, such as hanging a picture over a water stain or putting curtains over a broken window!
Staging allows a potential buyer to visualize what can be done with the home, which is especially important with a house that's currently vacant. For example, some carefully arranged furniture in a room that would otherwise be empty can really help the buyer see the room's potential. And if you're in a neighborhood of tract houses that all look pretty much the same inside, good staging will set your home apart from the others for sale in the neighborhood.
Finally, good staging makes buyers feel at home. It lets them really imagine themselves in the kitchen with friends, or relaxing in front of the living room fire, or even working on their car in the garage.
Remove Clutter
There are several things that go into staging a home for sale, and probably the single most important one is getting rid of all the clutter. No one wants to see several days' worth of mail and newspapers on the kitchen counter, or a kid's bedroom crammed with toys and games. The same applies to the garage, basement and even the backyard storage shed.
Clutter is not just an overflowing magazine rack. It can be too many pictures on the wall, too many chairs wedged around the dining room table, or an oversized sofa that blocks the living room traffic patterns. It can be too many items of clothing crammed into a closet, or too many of grandma's dishes filling up every inch of a kitchen cabinet.
When decluttering the house, stuffing everything into the closet or in boxes in the garage is not the answer. Remember that a potential buyer is looking in every nook and cranny of the house, and an overflowing closet doesn't make much of an impression. Instead, get the clutter completely out of the house. This could be a garage sale, some donations to a local charity, or simply a trip to the landfill. If you still have items that are cluttering up the house but they are things you'll want for your next home, then rent a temporary storage space and move them there.
Let Buyers Envision Themselves There
In addition to removing the clutter to make the rooms feel more open and the closets and cabinets feel more spacious, you want to always have an eye on what things you can do to help the buyers visualize living there. For example, lots of family photos on the wall will make it hard for the buyers not to feel like they're trespassing in someone else's home.
Likewise, while you may be very proud of your religious affiliations, your choice of political ideologies, or your gun collection and the elk head on the wall, remember that not everyone shares your interests. If you can depersonalize the home to some degree, it will make it easier for potential buyers to see themselves making a life there.
Your home should also be absolutely immaculate when you have it on the market for sale. Clean the counters and the cabinets and the fixtures and the flooring and every other part of the house until it shines. Wash the windows, let in the light, and make sure that beautiful view or that inviting backyard is clearly visible when a buyer walks through. A clean house also gives potential buyers more confidence that the structure of the house has been properly maintained and cared for as well.
Hire professional stager
It often makes good financial sense to hire a professional to do the staging for you. A professional home staging company will thoroughly understand the concepts of space and light and color, and they know how to make rooms show off to their full potential. They also don't have the same personal attachment to the home and its furnishings that you do, so they can make practical, impartial suggestions that you might otherwise overlook or simply not want to face.
The cost of professional staging varies with the size of the house and amount of work involved, but a well-staged home should sell quicker and for more money, which makes that upfront expense a wise financial investment.
For more helpful tips and thoughts contact us at 1-800-276-2400
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