Ryan Blanco San Diego real estate agent

4 Tips Before Buying A Home

When buying a home, one of the most important things you can do is to plan ahead. Failing to plan for small daily tasks is one thing, but failing to plan for one of the biggest purchases in your life can lead to severe problems. It is arguably the worst thing you could do before buying a home. You owe it to yourself and your family to get ready in advance for the home buying process. Here are four tips that can help you do this:

tips before buying a home1. Educate Yourself

It’s important for first-time buyers to become familiar with the basic home buying process. Even if it isn’t your first time, it’s still a good idea. The lending and real estate markets have changed quite a bit from even just a few years ago.

Here are four things you should look into:

  • What type of mortgage loan best suits your needs: Conventional, FHA, or VA?
  • Should you get a fixed-rate or adjustable-rate mortgage (ARM)? 
  • What’s the real estate market like in your local area? Are homes selling quickly with multiple offers on the first day, or are they sitting on the market?
  • What is the maximum monthly payment you can make comfortably? This is something your lender can help with.

This is also a good time to check your credit score and reports (you can get free annual copies). You should see what your credit situation is, and come up with a plan to improve it, if needed. You can see 2 of your credit scores every month on Credit.com.

You can avoid many surprises by determining the answer to these questions before starting your new home search.

2. Select a Lender & Real Estate Agent

You will be working with your loan officer and real estate agent throughout the entire home buying process. You will spend many hours with them in person and on the phone. Search through reviews and talk with several agents and lenders to find the ones that will provide you the best customer service and a quality buying experience.

When interviewing lenders, keep these questions in mind:

  • Who will be your point of contact throughout the process?
  • What is their average closing time for a loan?
  • Do they have a good Better Business Bureau (BBB) rating?
  • If you are obtaining a specialty loan such as a VA mortgage, are they familiar with its requirements and how it works?

When interviewing real estate agents, keep these questions in mind:

  • What’s their overall availability? Does it match yours?
  • How long have they been working in your particular market?
  • Do they have experience working with specialized loan products such as FHA financing?
  • Do they understand what homes will or will not meet these requirements?
  • Will you be able to put your full faith and trust in them?

3. List Your Wants & Needs

Going into the home buying process knowing your needs and wants will benefit you in many ways. Doing so will help you identify and prioritize features and help you eliminate homes that simply don’t meet your needs.

As you begin shopping for a home, it may be necessary to re-evaluate your list based on the local market and what is available in your price range.

Lean on your real estate agent for advice when you’re unsure of whether your list meshes with your budget.

4. Save!

Your out-of-pocket costs will vary depending on a number of factors, including the type of mortgage and your contract negotiations. These fees typically include a down payment and closing costs.

Closing costs can vary greatly depending on your lender and the amount of your mortgage. In California, 2% can be a general guideline to start. Ask your lender and real estate agent for estimates on closing costs.

Down payments are calculated by taking a percentage of the loan amount. They require that the borrower/buyer put a designated percentage in cash toward the home purchase. These percentages vary by loan type. Conventional loans require 5 – 20% down on a home. FHA loans require 3.5% down. VA  loans don’t normally have a down payment requirement.

Calculate the estimated out-of-pocket costs. Start saving toward this goal, if you haven’t already. It will be due upon closing. You shouldn’t be emptying your savings to come up with your closing costs and down payment. Some lenders will even prohibit this practice. You’ll want these savings as a safety net as a new homeowner. Leave yourself a comfortable amount of cushion in savings for emergencies and upcoming household expenses.

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com
Visit my Website: http://ryanyourrealtor.com

 

San Diego Housing Market Update-September 2016 Sales

San Diego Housing market update for home salesBelow is my monthly analysis of the San Diego housing market. It will show many different metrics to help us get an accurate “feel” for what is happening in our local real estate market!

As anticipated at the outset of the year, demand has remained high through the first three quarters of 2016, propping up sales and prices despite heavy reductions in inventory and months of supply across the country. With rental prices and employment opportunities in a consistent climb, year-over-year increases in home buying are probable for the rest of the year but not guaranteed.

Activity Snapshot:

One-year change in closed sales

One-year change in median sales price

One-year change in homes for sale

-4.1%

+8.7%

-17.0%

Closed Sales decreased 2.3 percent for Detached homes and 7.2 percent for Attached homes. Pending Sales increased 17.6 percent for Detached homes and 15.4 percent for Attached homes. Inventory decreased 12.4 percent for Detached homes and 28.7 percent for Attached homes.

The Median Sales Price was up 8.6 percent to $570,000 for Detached homes and 10.3 percent to $375,000 for Attached homes. Days on Market decreased 2.7 percent for Detached homes and 17.1 percent for Attached homes. Supply decreased 13.8 percent for Detached homes and 34.8 percent for Attached homes.

In general, today’s demand is driven by three factors: Millennials are reaching prime home-buying age, growing families are looking for larger homes and empty nesters are downsizing. However, intriguingly low interest rates often prompt refinancing instead of listing, contributing to lower inventory. Recent studies have also shown that short-term rentals are keeping a collection of homes off the market.

According to Bankrate.com, interest rates have continued to stay under the 4% level, despite the Federal Reserve Bank finally raising rates .25% late last year. Thanks in part to “Brexit,” rates have declined further. They are currently at 3.48% for a 30-year fixed loan (they were 3.46% at this time last month). This is well below the historical average of 6% or so, which is great for home buyers. To calculate your potential mortgage payment or see what you can afford, go HERE.

The San Diego Association of Realtors analyzes housing market data for San Diego county every month. Below is their monthly report for home prices. The figures represents ALL property types.

San Diego Housing Market September 2016 sales

CLICK FOR FULL SIZE

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

 

No-Cost Mortgage Loans…What’s the Catch?

Isn’t a no-cost mortgage better than a low-cost mortgage? In theory, it sounds good, right? No-cost mortgages have gotten quite a bit of exposure lately, and I will explain how the two differ. First, we must understand what an interest rate is, compared with the APR (annual percentage rate). The APR blends the closing costs (where the straight interest rate does not) with the loan amount and re-amortizing that figure over the term of the loan. On traditional loan financing, the APR is usually within .125% of the actual note rate tied to the amount borrowed.

When comparing loans, the APR is the best comparative tool, not the interest rate. The APR has no bearing on your principal and interest payment amount nor the note rate. APR is a barometer of loan cost solely. The interest rate determines the monthly mortgage payment.

A No-Cost Mortgage is truly a “no-cost” loan — no appraisal fee, no lender fees and no closing costs. These fees are assessed by virtue of taking out the loan. The mortgage lender provides a credit at the close of escrow equal to the amount of the closing costs, thereby creating a “no fees” loan. So what’s the catch? No-cost mortgages will contain a higher interest rate and APR, so you’re in essence amortizing the closing costs over the life of the loan (i.e. 360 months representing a 30-year fixed rate mortgage). So yes, you are still paying the closing costs, but just in a different way.

A Low-Cost Mortgage is a traditional mortgage all lenders offer that is considered the norm. You take out a loan while paying any applicable fees associated with doing so, excluding discount points, which are usually optional. Low-cost mortgages will contain lower rates than their no-cost mortgage counterparts. Here the lender does not have to inflate the rate for generating overage to pay the borrower’s closing costs. Thus you will get better pricing when it comes to the interest rate and terms. Thus, in general, the interest rate and APR are lower on low-cost mortgages than on no-cost mortgages.


So what is better for you?
The benefits you would gain from either choice depend on how long you plan to hold the loan and your financial goals. For example, because the future for many is unknown in terms of how long the loan will be held for and/or how long the property will be held for, a low-cost mortgage is a more appropriate long-term strategy as the realized benefits of the lower cost mortgage materialize over time — i.e., lower interest savings over the life of the loan. But if the property hold time or the loan payoff is going to be dramatically shorter, such as within the next 12 months, a no-cost mortgage is more appropriate (despite the higher interest rate.).

 

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com
Visit my Website: http://ryanyourrealtor.com

 

Can I Buy An Investment Property With Less Than 20% Down?

buying an investment property with 20% down paymentIf you’re thinking about adding a passive income stream by purchasing investment or rental property, one of the first questions you might have is what down payment you’ll be required to put down. Many federally-backed home loan programs like FHA and VA loans require very little to no down payment for owner occupied homes. But what about one of those loan programs for investment property? The short answer is that you must you have 20% to put down in order to buy a home you’ll rent out and use to generate income.

Can you buy investment or rental property with an FHA or VA loan?

Generally,  no. Federally backed and insured loan programs like FHA and VA loans are not available for the purchase of investment or rental properties which you, the owner, won’t occupy. There are a few exceptions to this general rule, including refinancing an existing FHA loan on a home which you have used as your primary residence, but now intend to move out of and use as a rental property. If you used an FHA loan to purchase the property initially, even if you move out and begin to rent out the property, you will likely still be able to refinance into another FHA or VA loan. The good news about this exception is the FHA streamline refinances are usually some of the quickest and most straight forward refinance programs available.

Another exception to the FHA and VA “no investment property” rule is buy buying a duplex or multi-unit property where you will live in one (or more) of the units. As long as the property is owner-occupied, you will likely be able to qualify for an FHA loan for your income property. VA loans may be used to purchase properties with up to 4 units, meaning that you could take advantage of all your VA mortgage loan has to offer (including the NO down payment feature!), live in one unit and rent out the others to create additional income every month.

What other down payment options are there?

If you already own a home with established equity, you may be able to use your home’s existing equity as a down payment on a second, investment property. You can leverage your home’s equity as a down payment through a cash-out refiance of your existing mortgage loan, or through a home equity loan or line of credit.

Many lenders will extend loans for an investment property with less than a 20% down payment, but will require the addition PMI (private mortgage insurance). PMI for investment mortgages is generally more costly each month than on an owner-occupied home, so if you are putting down less than 20% and taking on PMI as part of your purchase you’ll want to remember to factor PMI into your cash flow projections.

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

 

The Price Of Waiting To Buy A Home

There is much more to consider when purchasing a home than just the purchase price. The cost of waiting should be a large influence on when to make a home purchase. The cost of waiting has two major considerations, the home’s appreciation over time, and the interest rate at which a buyer will get on their loan. Home prices are currently rising about 6% a year in San Diego. The cost of borrowing is also expected to increase as interest rates look to appreciate, according to Freddie Mac. This means the ‘cost of waiting’ could have a big impact on your mortgage. 

For example, on a home costing $500,000 now, with interest rates around 3.5%, your payment would be around $2200.00 per month. The same home next year will likely cost $20-30,000 more due to price increases and the interest rate could be nearly a full point higher at 4.5%, meaning the mortgage payment will cost you about $350 more per month. ( times 12 months/ year, times 30 years= over $130,000 more)

TIME = MONEY 

Click HERE to start your home search TODAY!!

should i buy a home now or wait?

 Some Highlights:

  • The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
  • Freddie Mac predicts interest rates to rise to 4.6% by next year.
  • CoreLogic predicts home prices to appreciate by 5.3% over the next 12 months.
  • If you are ready and willing to buy now, find out if you are able to! Talk to a lender.

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

 

Quick Tips For Pricing Your Home

determining an asking price for my homeWhen it comes time to sell your home, setting a realistic selling price is extremely important. Price it to low, and you may be leaving money on the table, despite getting extra interest from buyers. Price it too high, and your home risks becoming a “stale listing,” as it sits on the market with little interest.

· Consider nearby comparables. What have other similar homes in your neighborhood sold for recently? How do they compare to yours in terms of size, upkeep, and amenities?

· Consider the competition. How many other houses are for sale in your area? Are you competing against new homes?

· Consider your contingencies. Do you have special concerns that would affect the price you’ll receive? For example, do you want to be able to move in a few months instead of a few weeks?

· Get an appraisal. For $400-500, a licensed appraiser can give you an estimate of your home’s value. Be sure to ask for a market-value appraisal. To locate appraisers in your area, contact The Appraisal Institute (www.appraisalinstitute.org) or ask your REALTOR® for some recommendations.

· Be accurate. Studies show that homes priced more than 3% over the correct (market) price take longer to sell.

· Know what you’ll take. It’s critical to know what minimum price you’ll accept before beginning a negotiation with a buyer. Of course, there could be other terms on the offer that may change this number. Your agent can guide you further on this during contract negotiations.

 

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com
Visit my Website: http://ryanyourrealtor.com

 

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