How Much Money Do I Need To Buy A In Santa Clarita Valley, Ca?

 
In a recent survey, How America Views Homeownership, it was revealed that 68% of Americans feel that now is a good time to buy a home and 95%said they want to own a home if they don’t already. Franklin Codel, head of Wells Fargo home mortgageproduction, explains:

“Although the home buying process has changed in many ways in recent years, our survey found Americans still view homeownership as an achievement to be proud of and many believe that now is a good time to buy a home.”

Confusion Creates Paralysis

However, the survey also reported that many are afraid to purchase a home because of uncertainty about “qualifying for a mortgage or navigating the home buying process”. Though 74% said they “know and understand” the financial process involved in buying a home, they also gave answers that suggest otherwise. For example:

• 30% of respondents believe that only individuals with high incomes can obtain a mortgage
• 64% of respondents believe they must have a “very good” credit score to buy a home
• 44% believe that a 20% down payment is required

In actuality many of these beliefs are unfounded. Let’s look at the question of down payment: Freddie Mac, in a recent blog post addressing the issue, confirmed that there is misinformation regarding the amount necessary when determining the down payment for a home purchase:

“Did you know 40 percent of today's homebuyers using mortgage financing are making down payments that are less than 10 percent? And how about this: since 2010, the number of people putting down less than 10 percent for conventional loans has grown three fold.  So, not only are low down payment options real, they represent a significant portion of today's purchases.”

In a separate Executive Perspectives, Christina Boyle, Freddie Mac’s VP and Head of Single-Family Sales & Relationship Management explained further:

• A person “can get a conforming, conventional mortgage with a down payment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets)”.
• Qualified borrowers can further reduce the down payment coming out of their own pockets to 3 percent by lining up gifts from family, grants or loans from non-profits or public agencies.

Education is the Key

Boyle talked about the importance of educating potential buyers:

“Letting more consumers know how down payments are determined could bring more qualified borrowers off the sidelines. Depending on their credit history and other factors, many borrowers can expect to make a down payment of about 5 or 10 percent.”

Codel agreed:

“It is important for prospective homebuyers to feel empowered to ask lenders and real estate agents questions about available options, such as down payment assistance or FHA loan programs or VA loans for veterans.”

Bottom Line

If you are saving for either your first home or that perfect move-up dream house, make sure you know all your options. You CAN pay cash or you put as little as 3% down to purchase a home? ___________________________________________________________________

Interest Rates and Your Family's Wealth

With interest rates right around 4%, many buyers may be on the fence as to whether to act now and purchase a new home, or wait until the end of the year. If you look at what the experts are predicting for 2015, it may make the decision for you.

Predictions for 2015 3Q:

• 4.6% - Fannie Mae

• 4.8% - Freddie Mac

• 5.2% - Mortgage Bankers Association

• 5.2% - National Association of Realtors

Even an increase of half a percentage point can put a dent in your family’s net worth.

Let’s look at it this way…

The monthly payment (principal & interest only) on a $250,000 home today, with the current 4.1% interest rate would be$1,208. If we take that same home a year later, the Home Price Expectation Survey projects that prices will rise about 4% making that home cost $10,000 more at $260,000. If we take Freddie Mac’s rate projection of 4.8%, the monthly mortgage payment climbs to $1,364. Some buyers might not think that an extra $156 a month is that bad. But over the course of 30-year mortgage you have spent an additional $56,160 by waiting a year. 

Why Do I Need A Real Estate Agent?

Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO. The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened due to the projections of higher mortgage interest rates & home prices as the market continues to recover. 

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

There are over 230 possible actions that 
need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to theNational Association of REALTORS, “the typical FSBO home sold for $208,000 compared to $235,000 among agent-assisted home sales.” Get the most out of your transaction by hiring a professional.  

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer? Dave Ramsey, the financial guru advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

List Your Santa Clarita, Ca Home Today!

We all learned in school that when selling anything, you will get the most money if the demand for that item is high and the inventory of that item is low, remember Cabbage Patch Dolls? It is the well-known Theory of Supply & Demand. If you are thinking of selling your home,  that the time is now. Here is why…

According to research at the National Association of Realtors (NAR), buyer activity last month (January) was three times greater than it was last January. Purchasers who are ready, willing, and able to buy are in the market at great numbers. 

Buyers are ready to buy a home in Santa Clarita, Ca, but they are coming upon situation of lack of listings. Many sellers say they are waiting for the spring to list their homes! WHY?

Low Inventory=Less Competition

Many sellers find it more convenient to list their homes in Spring, however you are thinking like all the other sellers out there.  In order to get top dollar when you sell your Santa Clarita home, you must think outside of the box.   Would you rather list your home for top dollar now and have no competition or would you rather list your home in spring and have 10 of the same types of homes as yours on the market, some who may be priced lower than yours.  Think about it, same house on the market as yours listed for lower, which one would you make an offer on first? With fewer homes on the market now, your home will get more attention from buyers.  Low inventory and higher demand also drives up prices.  

By Spring we expect many more home owners to list their homes because more sellers have equity that they didn't in years past.  It is normal for inventory of homes to rise in the Spring, don't be left out of getting top dollar for your home now!

Thinking of Buying A Home In Santa Clarita, Ca? Why Are You Waiting?

If you are planning on becoming a homeowner, or moving up to the home of your dreams in 2015, here are four great reasons to consider buying a home now, instead of waiting until spring.

1. 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 11.7% (most pessimistic) and 27.5% (most optimistic). The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise 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 the end of 2015. 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.

3. Either Way You are Paying a Mortgage

As a 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.”

4. 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.

Did You Serve in The Armed Service? VA Loans Are Available To Purchase a Home in Santa Clarita, Ca!

If you have ever served in the armed services did you know you have the opportunity to receive a VA Loan to buy a home in Santa Clarita, Ca? Here are some facts about VA loans:

1.) VA loans are with zero down and very little out of your pocket!

2.) Veterans can qualify to purchase a home 2 years after a short sale or foreclosure and very favorable time frames after a BK.  

3.) VA programs can include co-borrowers who are not Veterans

4.) No minimum credit score for Veterans to qualify VA

I am here to help someone who has helped us! Please let me know how I can serve your real estate needs!

VIEW SANTA CLARITA, CA NEWEST LISTINGS!

View all of Santa Clarita California's newest listings:

http://www.wendyshomevalues.com/santa-clarita-ca-area-new-listings.aspx

Are There Tax Benefits to Owning Your Santa Clarita Home?

Buying a home is often the biggest purchase we make in our lifetime. It can provide financial and income tax benefits, as well as emotional satisfaction. With the buying season just around the corner, potential buyers should get their finances in order and get pre-approved for a mortgage before starting their hunt.

It’s important for buyers to know the tax implications and deductions of becoming a homeowner. Did you know that buying a house can qualify you for breaks on your income tax like tax deductions for mortgage interest, property taxes, and special treatment of gains when the home is sold? You should consult with your tax advisor to get a complete understanding of how the tax laws may apply to your situation.

Let’s take a quick look at the applicable tax credits and deductions when it comes to owning a home. Keep in mind these rules only apply to a personal residence, not an investment property, vacation home, home office or rental unit.

The tax benefits of home ownership can be substantial.

Down Payment
Closing Costs
Repairs, Remodeling, Construction Costs
So, what can I deduct?
Benefits on the sale of your home

Even though your down payment is not tax deductible, using cash from your retirement plan to fund the down payment can have tax advantages. When you cash out, let the plan administrator know you intention for the distribution. If you are under age 59 ½, you can avoid the early withdrawal penalty if you are a first time home buyer and the funds are used for things like buying, building or rebuilding a first home. Keep in mind that even though you avoid the penalty you will still owe taxes on the amount of the distribution.

Closing costs are not deductible. However, be sure to carefully review the escrow settlement statement for deductible items such as property taxes and loan origination fees (points). Keep track of the closing costs associated with any refinancing as these can lower a profit when you sell the home. Points paid in a refinance can be amortized over the life of the loan and deducted on your tax return.

Any repairs, remodeling, and construction costs made to your home are also not deductible unless they are for major improvement such as a new water heater, roof replacement, additions, kitchen remodels, new windows, etc. Non-deductible items include plumbing repairs, maintenance, painting, and cleaning. Do not dispose of any of these receipts while you own the home as all of these expenses can be added to basis to reduce taxable gains when you sell.

Many homeowners find that the amount they pay in interest on their mortgage and annual property taxes is enough to incent them to itemize their deductions. Should you chose to deduct mortgage interest and property taxes, you can use Form 1098 which you will receive in January of each year, showing how much you paid in mortgage interest. If you have an impound account with the lender, the total amount paid in property taxes will be reflected on this form as well.

Another way some homeowners can qualify for additional deductions is by getting a home equity loan. Since the interest paid on a home equity loan qualifies as a deduction, the money borrowed could be used to pay off other debts where the interest is not deductible.

For many years, tax laws allowed you to avoid paying capital gain taxes when selling your home only if you rolled over the proceeds into a home that was more expensive. There were also some rules that allowed individuals over the age of 55 to avoid some taxes.

In 1997, those rules were changed. Now the IRS may allow you to exclude any gains on selling your house if you meet certain requirements. Always consult your tax advisor for more details.

The tax benefits of home ownership can be substantial. Always check with a tax expert prior to purchasing your home to make sure you’re getting the tax benefits you’re expecting. Be sure to keep good records regarding the purchase of the home and any improvements you make. Pay attention to when you make property tax and mortgage payments to ensure they fall in the year you want to take them as itemized deductions. Finally, if you have special circumstance(including a potential large gain if selling your home), always get an experts advice to make sure you get the maximum benefits allowed under tax laws.

Rent or Own, Either Way You Are Paying A Mortgage!

Either Way You Are Paying A Mortgage! There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either your mortgage or your landlord’s. As a 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.” Also, if you purchase with a 30-year fixed rate mortgage, your ‘housing expense’ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that your rent will increase over that same thirty year time period. As an owner, the mortgage payment is a ‘forced savings’ which will allow you to have equity in your home you can tap into later in your life. As a renter, you guarantee the landlord is the person with that equity. Bottom Line Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since home values and interest rates are still lower than projected.

Homeownership Is The Best Way To Build Wealth

Homeownership is The Best Way To Build Wealth! The New York Times recently published an editorial entitled, “Homeownership and Wealth Creation.” The housing market has made a strong recovery, not only in sales and prices, but also in the confidence of consumers and experts as an investment. The article explains: “Homeownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth.” Many of the points that were made in the article are on track with the research that the Federal Reserve has also conducted in their Survey of Consumer Finances. The study found that the average net worth of a homeowner ($194,500) is 36x greater than that of a renter ($5,400). One reason for this large discrepancy in net worth is the concept of ‘forced savings’ created by having a mortgage payment and was explained by the Times: “Homeownership requires potential buyers to save for a down payment, and forces them to continue to save by paying down a portion of the mortgage principal each month.” “Even in instances where renters have excess cash, saving a substantial amount is difficult without a near-term goal, like a down payment. It is also difficult to systematically invest each month in stocks, bonds or other assets without being compelled to do so.” Bottom Line “As a means to building wealth, there is no practical substitute for homeownership.” If you are a renter who is considering making a purchase, sit with a local real estate professional who can explain the benefits of signing a contract to purchase over renewing your lease!

Don't Wait! Move Up To The House You Always Wanted!

Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. In most areas, prices are still below those of a few years ago. Also, interest rates are still near or below 4%. However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease. Here is a chart detailing this point:

5 DEMANDS TO MAKE ON YOUR REAL ESTATE AGENT!

 Are you thinking of selling your house? Are you dreading having to deal with strangers walking through the house? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of selling. A great agent is always worth more than the commission they charge just like a great doctor or great accountant. You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish the average agent from the great one. Here are the top 5 demands to make of your Real Estate Agent when selling your house:

1. Tell the truth about the price

Too many agents just take the listing at any price and then try to the ‘work the seller’ for a price correction later. Demand that the agent prove to you that they have a belief in the price they are suggesting. Make them show you their plan to sell the house at that price – TWICE! Every house in today’s market must be sold two times – first to a buyer and then to the bank. The second sale may be more difficult than the first. The residential appraisal process has gotten tougher. Surveys show that there was a challenge with the appraisal on almost 20% of all residential real estate transactions. It has become more difficult to get the banks to agree on the contract price. A red flag should be raised if your agent is not discussing this with you at the time of the listing.

2. Understand the timetable with which your family is dealing

You will be moving your family to a new home. Whether the move revolves around the start of a new school year or the start of a new job, you will be trying to put the move to a plan. This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. Your agent cannot pick the exact date of your move, but they should exert any influence they can, to make it work. 

3. Remove as many of the challenges as possible

It is imperative that your agent knows how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market. Remember: If you have an agent who was weak negotiating with you on the parts of the listing contract that were most important to them and their family (commission, length, etc.), don’t expect them to turn into a super hero when they are negotiating for you and your family with the buyer.

4. Help with the relocation

If you haven’t yet picked your new home, make sure the agent is capable and willing to help you. The coordination of the move is crucial. You don’t want to be without a roof over your head the night of the closing. Likewise, you don’t want to end up paying two housing expenses (whether it is rent or mortgage). You should, in most cases, be able to close on your current home and immediately move into your new residence.

5. Get the house SOLD!

There is a reason you are putting yourself and your family through the process of moving. You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with selling. Do not allow your agent to forget these motivations. Constantly remind them that selling the house is why you hired them. Make sure that they don’t worry about your feelings more than they worry about your family. If they discover something needs to be done to attain your goal (i.e. price correction, repair, removing clutter), insist they have the courage to inform you.

Good agents know how to deliver good news. Great agents know how to deliver tough news. In today’s market, YOU NEED A GREAT AGENT!

Did You Wait To Buy A Home?

Did It Make Sense To Wait To Buy A Home?

There are many people out there who debated purchasing a home over the course of the last year, but ultimately did not. Whatever their reasons were for delaying, let’s look at whether the decision to wait to buy made sense.

What happened in 2014?

The 30 year fixed rate on January 2, 2014 was 4.53% as reported by Freddie Mac. Looking at the chart below, your monthly mortgage payment with principal and interest for a $250,000 home would have been $1,271.17. 

Even though interest rates have dropped below 4% and ended 2014 at 3.87%, home prices appreciated by 4.8 percent over the same time according to the Home Price Expectation Survey. So that same home appreciated by $12,000 and now costs $262,000. The most recent report by Freddie Mac reports the average 30-year fixed rate is currently 3.73%. Did It Make Sense to Wait? many may say, “See waiting a year made total sense, I’m saving $60 a month.” And they’d be right, over the course of the year they saved $729.36. But what they haven’t realized, is that as the price of the home they purchased went up by $12,000, even if they just put a down payment of 5%, they had to come up with an additional $600 at the start of the process. So really they’ve only saved $129.36 in a year. Is a savings of $11 a month really worth holding off on pursuing a home to call your own after you weigh all the benefits that come along with that? 

Building equity you can borrow against in the future
Having a safe, comfortable environment that fits your family’s needs
Having control over your space
Tax benefits
And so many more…
Bottom Line

The experts are predicting that homes will appreciate by another 4% and interest rates will increase by a full percentage point by the end of 2015. If you are in a position to be able to buy a home now before these predictions become reality, contact a local real estate professional and start the process.

5 Reasons to Use A Real Estate Professional

5 Reasons To Use a Real Estate Professional

Paperwork
They help with all the disclosures and paperwork necessary in today's heavily regulated environment.

Experience
They are well educated in and experienced with the entire sale process.

Negotiations
They act as a 'buffer' in negotiations with all parties throughout the transaction.

Pricing
They help you understand today's real estate values when setting the price of a listing or an offer to purchase.

Understanding Current Market Conditions
They simply & effectively explain today's real estate headlines and decipher what they mean to you.