As mortgage rates and house prices continue to rise in the coming year, the supply of homes on the market is expected to stay low. Despite all this negative sounding news, there is a great solution for homebuyers to obtain the dream home they have always wanted. Beat out the heavy competition that exists within the housing market with a Renovation loan!
In a competitive market with low home inventory, your best chance to purchase a home without getting stuck spending a fortune in a bidding war may be to purchase a property in need of updates or renovations. A house with good bones but an unattractive face, or a “fixer-upper” as they’ve come to be known, may be listed below market price and potentially end up with fewer offers and views as it sits on the market. These houses, with a well thought out plan, can usually be spruced up through a handful of renovation and remodeling projects. Renovation loans allow for the purchase of a house below your budget and renovate it up to what is affordable.
Renovation loans such as the FHA 203k or the Fannie Mae HomeStyle loan were created so that homebuyers could purchase a home they felt had potential, and could make their own. Using these loans, homebuyers can borrow money for a house and its desired renovations all at once without the need for a second loan.
FHA 203K Renovation mortgages allow buyers to borrow the funds for both the purchase and renovation of a home, based on the projected value of the finished product, and may be used for almost any renovation project except luxury items. A HomeStyle Renovation Mortgage allows for the purchase and financing of up to 50% of your property’s post renovation value, and can be used for luxury additions such as swimming pools as well as room remodels and any other permanent renovation that will add value to the home.
Fixer-uppers and home remodels are currently all the rage, and, considering the housing market projections, are expected to rise in the coming year. There are always ways for buyers to get their dream home, it just requires a little imagination and the ability to see past the imperfections of the current home. Thinking outside of the box will help today's buyers navigate the competition in the current market and renovation loans offer buyers a solution to still get their dream home.
Contact one of our Loan Originators for details on how to finance and renovate your dream home today!
February is American Heart Month, and a perfect reminder to make small changes that can have a big impact in your heart health.
Heart disease is the number one cause of death in the United States, so it makes sense to know a little bit about what makes your heart tick. While some risk factors like your age, gender, race and heredity cannot be controlled, others are very much in your own hands. The American Heart Association (AHA) has a number of strategies that can help you take control of these factors:
Eat with color. Healthy eating habits are at the top of the list. And if you follow AHA's food color guidelines, as well as seasonal eating habits, you will be on your way to managing cholesterol, blood pressure, blood sugar level and a healthy weight. Eat more vegetables, fruits, whole-grains and high-fiber foods, fish, lean protein, and fat-free or low-fat dairy products. All of these nutrient-rich foods are packed with vitamins and minerals, but are lower in calories.
Don't weigh yourself down with expensive diet plans. Losing excess body fat is essential to heart health, and the AHA's free diet and exercise program can help you get started on the right track.
Get physical by working your way up to 30 minutes of activity per day, at least five days per week. The AHA has numerous ways to help you make moderate physical activity a valued part of your life.
Check your stress at the door, and learn to control one of the most important factors related to heart health. The AHA has an entire section of their website dedicated to helping you manage stress levels.
Commit to quit if you still smoke. Yes, it's easier said than done but there's a lot riding on this risk factor. No matter how tough it is to quit smoking, it's a lot harder to recover from a heart attack. The AHA has detailed help here too, with resources and ideas for making this one resolution that sticks.
Know the signs of a heart attack. Familiarity with the warning signs can save a life:
- Chest discomfort. Any pain in the center of the chest that lasts more than a few moments, even if it stops and then comes back, can be a sign that something is wrong and you should seek help.
- Upper body discomfort. Pay attention to pain or discomfort in your arms, back, neck, jaw or even your stomach.
- Shortness of breath. Even if you don't have discomfort, shortness of breath is an important warning sign, and one that you should never ignore.
- Lightheadedness, nausea or cold sweats are other signs to be aware of.
When it comes to heart disease, every minute matters. Commit to heart-healthy choices and watch out for warning signs.
For more information, please visit the American Heart Association’s website: www.heart.org
Source: American Heart Association
The Rise of 2017
As the books closed on 2016, many economic indicators were on the rise. Some signal good news for those in the market to buy a home.
Housing Starts Surge
For regions struggling with limited housing inventory, Housing Starts may provide some hope. December Housing Starts surged 11.3 percent from November, the Commerce Department reported. The welcome news follows a disappointing pullback in November and a nine-year high in October. For all of 2016, average monthly Housing Starts were the best since 2007. Building Permits, which signal future construction, fell just short of expectations in December.
On another positive note, Existing Home Sales ended 2016 as the best year in a decade.
Limited housing inventory continued to push home prices up in 2016. CoreLogic, a provider of consumer, financial and property information, reported that home prices, including distressed sales, rose 7.1 percent from November 2015 to November 2016. The recent rise in home loan rates and the expectation of higher rates in 2017 could slow home price gains this year, CoreLogic reported.
Inflation Ticks Up
Consumer inflation was up 2.1 percent from December 2015 to December 2016, as reported in the Consumer Price Index. This 12-month increase marks the fastest pace of inflationary growth since the period ending June 2014.
The U.S. Bureau of Labor Statistics reported wholesale inflation also ticked up in December. The Producer Price Index climbed 1.6 percent from December 2015 to December 2016, which was the largest 12-month gain since 2014.
Rising inflation is worrisome for homebuyers because it reduces the value of fixed investments like Mortgage Bonds and hurts the home loan rates tied to them.
Home Loan Rates Still Attractive
Home loan rates were able to improve slightly in the first part of January, following the post-election volatility in Stock and Bond markets at the end of 2016. However, positive economic news, rising inflation and transitions under the new Trump administration may provide some headwinds for Mortgage Bonds and home loan rates in 2017. For now, home loan rates remain historically attractive.
If you have any questions about home loan rates or loan products, please don't hesitate to contact one of our Loan Originators.
Mortgage Lending Advice : Why Winter is The Best Time to Buy a Mortgage.
For most people, winter is one of the least convenient times to shop for a home. Whether the weather’s keeping them inside, the holidays are eating up their free time, or they just don’t want to potentially mess with their child’s school year, homebuyers are simply not on the hunt. Here are five reasons why it’s ideal to look for a home during the colder months.
- Bargain Prices: There may be fewer buyers out and about, but there will still be houses on sale during the winter causing supply to exceed demand in the housing industry. Because of this home prices are usually at an annual low around January, meaning you will probably end up with more for your money.
- Motivated Sellers: Generally, if a homeowner lists their home in winter it’s because they need to move from their property for one reason or another. You can then use this to your advantage to get a better deal as they’re usually more willing to negotiate.
- Less Competition: Since most people don’t think of winter as prime house hunting season, there’s much less competition in the market. Less competition means there are fewer chances of there being multiple offers on any one property, so you won’t have to worry nearly as much about someone having a better offer.
- Availability of Professionals: Again, fewer people are looking at houses now than during the rest of the year. You won’t have nearly as much competition for a home or for the attention of real estate professionals. Both real estate agents and lenders will have fewer clients to worry about so they’ll be able to spend more time with you answering your questions.
- Seasonal Perspective: When you tour a home in the summer, it’s hard to imagine what life would be like there in the winter. Are there drafts? Does the heat seem to be working well? Are you cold as you walk around? If you live somewhere where the winter weather is particularly harsh, touring a house during that time and seeing how well the heating and insulation actually work could actually be more beneficial than touring in the warmer months.
Despite all these facts, it’s important to remember that the best time to buy a house is the time that works best for you. So, if you should find yourself buying a home this winter call Homestead Funding for all your home financing needs!
Affordable Care Act Tax Scam Alert
The Internal Revenue Service has announced the latest scam to hit the country, which features a fake notice that the recipient owes money due to the Affordable Care Act. If you or someone you know receives a suspicious message you're not sure is from the IRS, you'll want to know these details:
Fake notices designed to look like actual IRS CP2000 notices (sent when information received about your income doesn't match your tax return) will claim you owe money for the previous tax year under the Affordable Care Act.
Emailed notices are a red flag because the IRS doesn't initiate communication by email. These emails may include a link to make an online payment. Fake payment processing websites can not only defraud you but also steal your identity or infect your computer.
Mailed notices may request that a check made payable to "I.R.S." be sent. However, legitimate CP2000 notices request taxpayers only make checks payable to "United States Treasury."
The IRS has defined procedures for communicating with taxpayers and will never:
- Initiate contact by email, text or social media
- Request payments via gift card, prepaid debit card or wire transfer
- Threaten immediate arrest or deportation for failure to pay
If you or anyone you know receives a suspicious notice, a copy should be immediately sent to email@example.com and then deleted from your email account. The Federal Trade Commission should also be notified.