Tag Archives: mortgage

Money Monday: California Housing Affordability

Higher wages and seasonal price declines affect California housing affordability.

housing market forecast

• “Thirty-one percent of California households could afford to purchase the $511,360 median-priced home in the fourth quarter, unchanged from third-quarter 2016 and up from 30 percent in fourth-quarter 2015.” (“4th Qtr 2016 Housing Affordability”. CAR.org. 9 Feb 2017)

• “A minimum annual income of $100,800 was needed to make monthly payments of $2,520, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 3.91 percent interest rate.”

Read all about 2016’s housing marketing in the fourth quarter, in the CALIFORNIA ASSOCIATION OF REALTORS’ article here: “4th Qtr 2016 Housing Affordability“.

 

Money Monday: Tax Deductions for Homeowners

With the tax deadline coming up, now is the time to refresh yourself and learn about tax breaks you could be getting if you are a homeowner.

Some of the following tax deductions are only applicable to new homeowners, but there are a few that any owner can file for:

  1. Mortgage interest
  2. Mortgage insurance premiums
  3. Energy related tax credits
  4. Capital gains exclusion
  5. Property inheritance
  6. Property taxes
  7. Home office costs
  8. Moving expenses

If you would like details on these potential tax breaks you could be getting, read Yahoo’s article here.

Money Monday: What does FICO have to do with my Home Loan?

Your FICO score is the yardstick by which most lenders measure your credit worthiness.

debt calculationThe major credit bureaus keep track of loans that you have taken out in the past and how well you managed this debt. A high FICO score indicates that you have been responsible with the credit extended to you and will reflect positively on applications that you submit, while a lower score indicates that you have had credit issues in the past. Continue reading

Money Monday: Money tips for homeowners

With homeownership, there are both benefits and costs involved (not just the down payment).

As the homeowner, your financial responsibilities extend beyond the down payment and monthly mortgage payments; there will be maintenance items to maintain and pay for, yearly tax bills, and the unexpected repairs to resolve. CNN Money does have a few money tips to help those would-be and already-are homeowners; read their article here.

Photo from Pictures of Money

Photo from Pictures of Money

1. Create a new budget

Instead of rent, you now have house expenditures. Besides the change in the monthly payment, there will likely be an increase in utility bills (it costs more to cool and heat and power a larger living space!), the potential watering and maintenance of a yard and garden, and other things such as a trash bill and your tax bills.

Estimate your monthly expenses initially, but then keep track of the actual monthly money going out for awhile, and then base your budget on that.

2. Plan on repairs

Even with a turn-key property, most likely you will have repairs to make pretty soon down the road. “Most homeowners spend 1% to 4% of their homes’ value each year on repairs and maintenance.” (CNN Money. “4 money tips for new homeowners”). And if you have an expensive repair coming up, like replacing the roof, try to save a little more each month in preparation.

3. Expect your property taxes to go up

Property taxes start out based on the assessed value of your home at the time of purchase. But,

Property taxes have a tendency to rise, even when home values drop. Back in 2000, localities across the U.S. collected an estimated $247 billion in property taxes, but by 2010, that number almost doubled to $476 billion despite the decline in home prices from the infamous housing bubble implosion. (CNN Money. “4 money tips for new homeowners”)

4. Expect big payments

Homeowner’s insurance and property taxes are some hefty bills, that you should plan for accordingly.

Read up on all of CNN Money’s tips here: “4 money tips for new homeowners”

Money Monday: Renters have affordability challenges when buying a home

Renters value homeownership but face affordability challenges when it comes to buying a home, C.A.R. survey finds.

upside-downCurrent renters value homeownership and want to buy a home, but many are encountering affordability and financial obstacles that prevent them from buying, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2016 Renter Survey. Making sense of the story:

  • Nearly half of renters (48 percent) plan to buy a home in the future, with 10 percent saying that they plan to buy within a year.
  • For those not planning to buy, an improvement in finances, lower housing prices, and saving enough for a down payment would motivate them to buy now.
  • Of the 28 percent of renters who don’t plan to buy in the future, 50 percent said they can’t afford to buy, 20 percent will not buy because they prefer to rent, 19 percent said they can’t qualify for a mortgage, and 15 percent lack a down payment.
  • Job uncertainty (9 percent), economic uncertainty (12 percent), and housing market uncertainty (6 percent) were among other reasons renters cited for not buying a home.
    Homeownership remains important to renters, with nearly half (45 percent) rating it 8 or higher in importance on a scale of 1-10, with 10 being extremely important. The average was 6.8.
  • Nearly all renters (95 percent) see advantages to homeownership; freedom to do what you want with your home, building equity, and having permanence and stability were the top benefits mentioned by renters.
  • One of the surprising findings of this survey is that more than one in four millennial renters said they plan to purchase a home that will accommodate their parents, and about one in five millennials indicated they plan to pool funds with family members to buy a home.

Read the full story from KPCC: www.scpr.org/news/2016/06/08/61459/homeownership-is-valued-but-remains-expensive-and/

Money Monday: Financial perks for veterans

As a thank you for their huge service to our country, our veterans have financial perks.

  1. flagSchool loan — Vets get 36 months of educational expenses paid through the G.I. Bill. But, you can also transfer that benefit to family–as long as you sign up to serve four more years from when you sign up for it (Time.com/money).
  2. Housing mortgage —  As a veteran, a VA loan allows you to get a no-down-payment, competitive-rate home loan.
  3. Business coaching — Veterans Business Outreach Centers offers boot camps and free resources for entrepreneurs.

This information is from Time; view their article on this topic here: time.com/money/3567560/vet-benefits-business-school-housing

Money Monday: Prioritize bills when you’re short on cash

How to prioritize which bills to pay

If you’re in a tough spot and can’t pay all of your bills, then you need to make a strategic decision on what to pay and what to delay.

money

Daily Finance gives advice on what “five bills you should always pay on time, each month. Not doing so could damage your credit, leave you with huge financial penalties, or even cause you to lose your home or car.”

1. Your mortgage
2. Student loans
3. Credit card payments
4. Your rent
5. Auto loans

Details on each of these bills to pay and the reasons why you shouldn’t miss payment is covered by Daily Finance. And the bills you need to pay late? They have some tips on dealing with that, too.

Read all of Daily Finance’s article here: “Prioritize These 5 Bills When You’re Short on Cash”.

Real Estate Purchases in 2015

In 2015, the majority of home buyers financed their real estate purchase.

In 2015, 86% of home buyers used financing (first-time buyers were more likely to utilize financing) to purchase their homes, but there were also high numbers of all-cash buyers.

CallingAllFirstTimeBuyersThis infographic is from CALIFORNIA ASSOCIATION OF REALTORS, at CAR.org.