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Fall market brings mortgage options

Find a loan you can afford with guidelines that make sense

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Fall has normally been the second major season for housing purchases and sales.

One effect of COVID-19 has been to throw us off schedule in the normal seasonal nature of real estate sales. At long last, however, we’re beginning to see its return. 

Traditionally throughout the nation, spring begins in late March or April and is the most popular time of year for buying and selling homes. In the DMV, however, spring comes early – as early as February – and the market begins to heat up as what little snow we get dissipates.

Summer has usually seen interest wane, while house hunting takes a back seat to vacations, summer camp, and participation in barbecues, family gatherings, and other outdoor activities and celebrations.

Fall has normally been the second major season for housing purchases and sales, ranging from Labor Day to Thanksgiving. Thereafter, during the winter market, people begin to plan for holidays and, although houses sell well when adorned with holiday decorations, the fall market may be better suited to allowing for settlements prior to the end of the tax year.

Even though housing inventory remained low, we saw homes in some areas take slightly longer to sell during July and August. In addition, instead of 20 competitors for a single home in a popular area, there might be only five to 10.

Still, in the past two weeks, I have seen activity on my client portals, where buyers receive information about homes that are new to the market, jump exponentially from two or three a week to the same amount in a day.  

With businesses and government agencies continuing to promote remote work, more people are realizing that they need to revamp their existing homes to accommodate office space or purchase new homes with an extra room or two for that purpose. It’s not mini-mansions they want or even a 10/10 on Room Rater or Zoom, just a carved out, quiet space with a door to keep out the household noise.

Interest rates remain low and loan guidelines are not as strict as they were post-2005, with new loan programs available for a variety of situations. If you already own a home and have significant equity and good credit, refinancing your current mortgage might be just what you need to cut costs, eliminate private mortgage insurance, renovate your current space, buy a new residence, or invest in a second home or rental property. 

For example, I bought my current home six years ago with a first mortgage at 4.125% and a second mortgage at 5.75%, both good rates for a 5% down purchase at the time. This past spring, I consolidated those into a single loan at 2.875%, saving roughly $600 per month to put toward bills, renovations, unforeseen home repairs, retirement, and a little bit of just plain fun.

Want to pay off your home faster? If you make just one additional payment of principal on your loan annually, you can pay off a traditional 30-year loan earlier and save several years of interest. A 15-year mortgage is another option. 

As of Sept. 22nd, NerdWallet showed the nationwide average interest rate for a 15-year mortgage to be 2.169%, compared with 2.904% for a 30-year note. Your monthly payment will be higher when the loan is shortened to 15 years, but you will save thousands in interest over the life of the loan. Just remember that quoted rates may not take into consideration how your credit, debts, and equity affect your ability to borrow.

For those looking for an investment property, your income and credit may allow you to refinance and use any excess cash from your equity to start your career as a landlord. This can be an excellent retirement program or savings account for college, since a tenant pays your mortgage.

According to Karen Guess of HomeFirst Mortgage, lending rules now allow a 15% down payment from your own funds (no gifts), rather than the 20% that was previously the standard. A credit score of 620 gets you started and 75% of the average rental income reported in the area can be credited as an asset based on an appraisal of the property. The current interest rate is only 3.5%, but rates can fluctuate daily, so always check with your lender to be sure you have the most current information.

No matter what your need, financing is not what it was in the early 2000s, when lenders wrote pre-approval letters on cocktail napkins and everyone was eligible for a no-documentation, “fake news” mortgage. Contact your loan officer for a mortgage you can afford with guidelines that make sense.

Valerie M. Blake is a licensed Associate Broker in D.C., Maryland, and Virginia with RLAH Real Estate. Call or text her at 202-246-8602, email her via DCHomeQuest.com, or follow her on Facebook at TheRealst8ofAffairs

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Real Estate

My Best Of’s in D.C. real estate

Favorites in buyer programs, paint colors, and more

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Forget shiplap, wallpaper is back!

As I congratulate my colleagues and friends who have received the coveted Best of Gay DC awards, I thought it appropriate to share with you my own, subjective “Best of” list. 

Best Housing to Buy. With 233 of them on the market in D.C., the one-bedroom, one-bath condominium under $400,000 may be the best option for a personal residence or investment. Given a median price of $320,000 and 49 days on the market, there are deals to be made. You have your choice of areas around the city and of buildings large and small.

Best First-time Buyer Program. D.C.’s Housing Purchase Assistance Program (HPAP) is by far the best option to use if you are eligible. This program is based on household income and size and can provide up to $84,000 toward the purchase of a D.C. personal residence. For example, to receive the full amount, the income of a party of two is limited to a total of $51,600, 50% of the median family income for D.C. Other requirements may apply.

Best Tax Reduction Program. If you qualify, you may be able to take advantage of the DC Tax Abatement Program. Using the example of our party of two working adults buying a personal residence for less than $516,800, the income limit is $79,020 or $113,500 in designated Economic Development Zones.

Approval for the program exempts buyers from paying property taxes for up to five years and reduces the closing costs for the purchase by eliminating the buyer-paid recordation taxes and distributing the seller-paid transfer taxes to the buyer instead of to the DC tax office. For the buyer of that $516,800 personal residence, that can mean a savings of nearly $15,000 in closing costs.

Best Neutral Paint Color. First it was Builder Beige, then Gray was OK, then they blended into Good Grief Greige. While neutrals can be bland and boring, these days, expect to see a variety of off-whites gracing the walls of homes for sale. Sherman Williams 7008, Alabaster, did the trick for my most recent sellers. 

Best Wall Décor. Sponge paint and other effects are long gone. Forget shiplap unless you live in a house at the beach or on an actual ship. Distressed wood may still be suitable for a cabin in the woods, but in a modern, urban setting, wallpaper is back, baby! 

This is not your grandmother’s wallpaper. No chickens, tiny prints, borders, or faux grass cloth are in sight. Today’s wallpapers are bold, geometric, or a throwback to mid-century modern and are primarily used on an accent wall so they’re not overwhelming. Love vs. Design (lovevsdesign.com) can create custom wallpaper to match your color scheme in a peel and stick application that eschews the mess of wallpaper paste.

Best Indoor Plant. For us plant growing novices, the award goes to The Easy Care Bundle at The Sill (thesill.com). For only $45, you get two potted succulents that are very hard to kill, a Snake Plant and a ZZ Plant. 

You can also set yourself up on a subscription. $60 plus a $10 shipping charge buys a medium sized plant-of-the-month with a black or cream-colored planter. Choose classic plants or select pet-friendly, non-toxic plants for only $5 more with a 3-month minimum subscription. You can even purchase these as gifts.

Best Balcony Plant. For homes with a balcony or a deck, the winner is a potted Winter Gem Boxwood. It’s an evergreen that will turn a golden shade in the winter then green again in the spring. It also grows in both full and partial shade – almost a set it and forget it type of shrub – needing water only once a week or twice in hotter climates. Cut it as a topiary à la Edward Scissorhands for a little architectural interest.

Best Freestanding Refrigerator. I would be remiss if I didn’t include a best appliance category.An upscale fridge with see-through doors and built-in versions of computers, televisions and smart home elements holds a certain appeal until one of the glitzy attractions breaks and you spend as much for a new motherboard as you would for a whole new refrigerator. 

The winner of this category, therefore, is Samsung’s model RF28R7351SR. This bad boy is available in both standard and counter depth and features a French door top with external water and ice, a pull-out freezer with dual baskets, and a middle drawer that can be set to one of four temperatures to accommodate food or wine.

There you have it. Now, if you’ll excuse me, I’m off to judge the Best of Blake Miniature Schnauzers category. I’m thinking a 4-way tie is in order.

Valerie M. Blake is a licensed Associate Broker in D.C., Maryland, and Virginia with RLAH Real Estate. Call or text her at 202-246-8602, email her via DCHomeQuest.com, or follow her on Facebook at TheRealst8ofAffairs

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Real Estate

Helpful tips for homebuyers in seller’s market

2021 has been a great year for home sales

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COVID-19 housing market, gay news, Washington Blade

Without question, 2021 was a great year for home sales. Sellers across the country, in many cases, found themselves listing their homes and quickly having not just one, but multiple offers, many of which were at asking price or above. With limited inventory and high demand, it has been an ideal year to sell—and conversely, often a difficult year to buy. Buyers who are interested in a particular home, or even in a specific neighborhood, often find themselves facing stiff competition to have offers accepted. 

Fortunately, this doesn’t mean that many buyers haven’t had successful and rewarding home buying experiences—just that doing so often means making an extra effort and taking helpful steps to make an offer the most competitive that it can be. With that in mind, let’s take a look at a few helpful tips for buyers in a seller’s market:

  • Plan ahead with mortgage pre-approval: While there are certainly a wide variety of strategies that real estate agents and financial advisors may recommend, and while those strategies might vary depending upon the buyer and the circumstances of a particular market, one thing almost all experts agree on is that obtaining a mortgage preapproval is a smart decision. A mortgage preapproval is an ideal way to reassure sellers that a reputable lender has verified your credit and approved your buying power up to a certain limit. If you’re caught in a bidding war with another potential buyer, having preapproval establishing that you are ready, willing, and able to buy just might give you the advantage you need in a competitive market.
  • Be willing to look under budget so you can bid higher: In this highly competitive market, many home buyers find themselves in a situation where they are in a bidding war with another—or even several other—buyers. In that situation, you may find yourself having to make an offer at, or even in many cases, above, the asking price. This means that you may want to adjust your budget—and bidding—accordingly. Choosing to make an offer on a home that has an asking price that is already at the top of your budget may mean that you simply don’t have much wiggle room when it comes to making an offer over that price. Choosing a home slightly under the top of your budget means you’ll have more flexibility to make a bid that is more competitive and likely to be accepted.
  • Consider offering non-price-oriented incentives: Without question, making a highly competitive offer is going to be the key to increasing your chances of having that offer accepted. It’s important to remember that there is more to an offer than just price, however. Buyers may want to consider increasing the appeal of an offer by supplementing it with other incentives beyond just the dollar amount itself. Examples of such incentives might include things like foregoing the seller-paid home warranty that is often offered as part of the process, offering a shorter closing period, not making the purchase contingent upon the sale of a currently-owned home, or other such incentives. Doing so may give you the edge you need to have your offer selected over other competitive bids.
  • Retain the right real estate agent: Often, for LGBTQ buyers, especially in a competitive market, this piece of the puzzle is particularly important. In many, although certainly not all, cases LGBTQ buyers are drawn to specific areas of a city or community where other LGBTQ individuals live. That means that in a market where inventory is already limited and going quickly, there can be even fewer homes available upon which to bid. When that is the case, you will need a real estate agent who knows the community that you’re interested in, and who can quickly help you identify and take action toward making offers on homes that fit your needs. Having the right agent can make all the difference between a smooth and successful home-buying experience, and a stressful one

Jeff Hammerberg (he/him/his) is the Founding CEO of Hammerberg & Associates, Inc. Reach him at 303-378-5526, [email protected] or GayRealEstate.com

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Real Estate

Help, I’m under contract!  They accepted my offer?!

Buyer and seller need to work as a team

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What are the most common questions real estate agents, title companies and lenders get once a client is under contract? Well, luckily on my team we send out a next steps letter to all of our clients once an offer has been accepted and this helps them to know what to do the first week, the second week, and in any subsequent weeks before the settlement.  

For example, the letter will go out and say, “Make sure to get your EMD check to the title company in the agreed upon amount of time.” The EMD is your earnest money deposit, and most contracts have a buyer write a check for several thousands of dollars that will go the title company as sort of a “security deposit” on a contract that later gets applied to the buyers’ closing costs.

The letter will also instruct a buyer to contact their lender and confirm with them that they are under contract and to get the contract over to the lender so they can start preparing the loan and order the appraisal. The letter also states that later in the process the buyer will get the wiring instructions from the title company where settlement will be held for the down payment money. If there is to be a home inspection, we will also get that scheduled, usually in the first week after going under contract also.  

If selling, the letter is a different one with information about moving companies and getting any staging out of the listing. Both parties will receive instructions on how to change the utilities from the seller to the buyer the week of settlement. The title company will also follow up with the buyers and sellers to get any needed info. They will ask any questions necessary to possibly help the buyer to get any deductions or credits they might qualify for that could lower their closing costs. A good lender will do this also.

What each buyer and seller needs is good teamwork to make the dream work whenever a house is changing hands and a large transaction is going to be handled. For more information, you can contact me to attend my next Homebuyer’s Seminar on Oct. 12 in the evening, which will be on Zoom.  

Joseph Hudson is a Realtor at the Rutstein Group of Compass. Reach him at 703-587-0597 or at [email protected].

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