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Is Student Loan Debt A Threat to Homeownership? No!

Is Student Loan Debt A Threat to Homeownership? No! | Keeping Current Matters

Over the course of the last thirty years, a shift has happened. An entire generation has been raised to believe that a college education is their key to unlocking opportunities that were not available to their parent’s or grandparent’s generations.

Due to this, student loan debt has soared to $1.5 trillion and represents the largest category of debt, surpassing credit card and auto loan debt in 2010 and never looking back. As more and more Americans continue their education amongst rising tuition costs, this number will no doubt increase.

Many housing experts have blamed student loans for a drop in the homeownership rate for young families, and to an extent, they’ve been right. Increased debt at the time of graduation has no doubt limited young people from being able to afford a home at the same rate as their parents or grandparents did at the same age.

In a recent Forbes article, the author explained that “in just the class of 2017, the average student has about $40,000 in debt — almost enough for a 20% down payment on a median-priced home.”

The Federal Reserve set out to determine exactly how much impact student loan debt has had on the homeownership rate of those 18-34 (millennials). Their results found that,

Every $1,000 in student loan debt delays homeownership by about 2.5 months, but it doesn’t prevent homeownership entirely.

 In fact, by the time college grads reach their 30s, those with student loan debt have a homeownership rate nearly identical to those who didn’t take out loans.” (emphasis added)

In the Wall Street Journal’s coverage of the Fed report, they found that recent graduates prioritize paying off their student loans over saving for a down payment, despite their desire to be a homeowner. Many with debt want to “get that monkey off (their) back (before they) make any new investments.”

This has just delayed the wave of young home buyers from hitting the market. But as Danielle Hale, the Chief Economist at realtor.com warns,

“2020 will be peak millennial, the year when the largest number of millennials will turn 30.”

 By age 30, those who attained a bachelor’s degree right after high school will be one or two years away from paying off their loans and will have been in their career long enough to earn a higher salary.

In the long run, research shows that attaining a bachelor’s degree or more actually increases the chances that someone will become a homeowner.

Bottom Line

If you are one of the many millennials who has prioritized paying down your student loans over saving for a down payment, you’re not alone. Even if you are a couple years away from paying off your loans, meet with a local real estate professional who can help you determine if waiting really is the best decision for you!


Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on January 30th, 2019 1:43 PMLeave a Comment

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Selling Your Home? Make Sure the Price is Right!

Selling Your Home? Make Sure the Price is Right! | Keeping Current Matters

If you’ve ever watched “The Price is Right,” you know that the only way to win is to be the one to correctly guess the price of the item you want without going over! That means your guess must be just slightly under the retail price.

In today’s shifting real estate market, where more inventory is coming to market and home values are projected to appreciate at lower rates, homeowners will not be able to price their homes as aggressively as they were able to just last year.

They will have to employ the same strategy: be the closest without going over!

As we have explained before, pricing your home at or slightly below market value actually increases the number of buyers who will see your home in their search!

Over the last six months, more inventory has come to market while the months’ supply of inventory available has dropped. This means that the demand for homes to buy is still very strong throughout the country!

Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the homes when in reality nothing was wrong, the price was just too high!

Bottom Line

If you are thinking about listing your home for sale this year, make sure you have a real estate professional on your side to help you properly price your home from the 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Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on January 22nd, 2019 9:54 AMLeave a Comment

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December 12th, 2018 1:01 PM

Don't Get Caught in the Rental Trap in 2019

Don't Get Caught in the Rental Trap in 2019 | Keeping Current Matters

Every year around this time, we take time to reflect and plan for next year. If you are renting your current home but have dreams of homeownership, your plan for the new year may include buying, and you wouldn’t be alone!

According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying in the next 5 years, with 38% planning to buy in the next 2 years!

When those same renters were asked why they disliked renting, 52% said that rising rental costs were their top reason, and 42% of renters believe that their rent will rise every year. The full results of the survey can be seen below:

Don't Get Caught in the Rental Trap in 2019 | Keeping Current Matters

It’s no wonder that rising rental costs came in as the top answer! The median asking rent price has risen steadily over the last 30 years, as you can see below!

Don't Get Caught in the Rental Trap in 2019 | Keeping Current Matters

There is a long-standing rule that a household should not spend more than 28% of its income on housing expenses. With nearly half of renters (48%) surveyed already spending more than that, and with their rents likely to rise again… why are they renting?

When asked why they haven’t purchased a home yet, not having enough saved for a down payment (44%) came in as the top response. The report went on to reveal that nearly half of all respondents believe that “a 20% down payment is required to buy a home.”

If the majority of those who believe they haven’t saved a large enough down payment believe that they need 20% down to buy, that means a large number of renters may be able to buy now!

Bottom Line

If you are one of the many renters who is fed up with rising rents but may be confused about what is required to buy in today’s market, contact a local real estate professional who can help you on your path to homeownership.


Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on December 12th, 2018 1:01 PMLeave a Comment

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Is winter the “off season” for your real estate plans? PJ Wade explains why waiting for the spring market may be the more expensive thing to do.

Real estate may be the furthest thing from your mind at this time of year, but keep three key real estate realities uppermost in your thinking, or 2019 could be an expensive year - in more ways than one.

#1. “It’s always the right time to buy or sell real estate- when the right property or opportunity appears.”

There’s still a tendency to think about real estate according to seasons. This 20th-Century leftover didn’t help much then and it doesn’t now in our full-on lifestyles. When buyers wait to join competitors in the highly-competitive spring market, they often pay more than necessary. Savvy buyers know stepping “outside the box - the spring market - may give them an edge and make their offer appear to have more value to sellers. While everyone else is freezing their assets til spring, consider breaking away from the pack and searching out sellers who are determined, perhaps out of necessity, to sell at this time of year. With less buyer competition and committed sellers, your real estate professional may be able to negotiate a deal that carries extra financial benefit for you.

#2. “Credit card debt delivers two solid financial hits that are hard to recover from.”

• Carry a credit card balance and any ‘great deal’ benefits you achieved may disappear into heavy interest penalties
• Credit card debt limits mortgage size and. therefore. the value of home that is considered affordable.

Billions will be spent online and in stores before the end of 2018 and billions in credit card debt will drag consumers down as 2019 unfolds.

Will those purchases be worth limiting the location and size of real estate you can afford to make yours in 2019? Times have changed, but has your spending pattern changed? Does out-of-date spending have you buying things that are non-essential to demonstrating your love or affection for another or to maintain an expensive lifestyle? The new reality is people don’t wait for someone to buy them gifts anymore. When something online or in stores catches their eye, they buy it. Instant gratification is now a way of life. But impulse buying for yourself or others, can limit your future. Think before you click or swipe. Ask yourself, “Is this really the best way to send the message I’d like to communicate?” and “Is this purchase really more important than realizing dreams?”

#3. “Professional insight is essential.”

Since it is “out of season” with little or no buyer competition, you may feel that you can handle the search on your own. Don’t kid yourself.

Doing this without significant professional insight and experience may lead to your undoing. The good news is that this advice is all around you and most of it available at no charge. Real estate professionals are in the business of matching buyers and sellers at any time of the year.


Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on December 5th, 2018 11:04 AMLeave a Comment

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December 5th, 2018 10:28 AM

Where Are Interest Rates Headed In 2019?

Where Are Interest Rates Headed in 2019?

The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily throughout 2019.

Where Are Interest Rates Headed in 2019? | Keeping Current Matters

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly. But don’t let the prediction that rates will increase stop you from purchasing your dream home this year!

Let’s take a look at a historical view of interest rates over the last 45 years.

Where Are Interest Rates Headed in 2019? | Keeping Current Matters

Bottom Line

Be thankful that you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.



Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on December 5th, 2018 10:28 AMLeave a Comment

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7 Reasons to List Your House For Sale This Holiday Season

7 Reasons to List Your House for Sale This Holiday Season | Keeping Current Matters

Every year at this time there are many homeowners who decide to wait until after the holidays to list their homes for the first time, while others who already have their homes on the market decide to take them off until after the holidays.

Here are seven great reasons not to wait:

  1. Relocation buyers are out there. Many companies are still hiring throughout the holidays and need their new employees in their new positions as soon as possible.
  2. Purchasers who are looking for homes during the holidays are serious buyers and are ready to buy now.
  3. You can restrict the showings on your home to the times you want it shown. You will remain in control.
  4. Homes show better when decorated for the holidays.
  5. There is minimal competition for you as a seller right now. Inventory of homes for sale traditionally slows in the late fall, early winter. Let’s take a look at listing inventory as compared to the same time last year:

7 Reasons to List Your House for Sale This Holiday Season | Keeping Current Matters

 

  1. The desire to own a home doesn’t stop when the holidays come. Buyers who were unable to find their dream homes during the busy spring and summer months are still searching!
  2. The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will continue to surge and reach new heights which will lessen the demand for your house in 2019.

Bottom Line 

Waiting until after the holidays to sell your home probably doesn’t make sense.


 

 



 




 


Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on November 29th, 2018 9:41 AMLeave a Comment

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Taking Fear Out of the Mortgage Process

Taking Fear Out of the Mortgage Process | Keeping Current Matters

A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainties about the buying process. A specific cause for concern tends to be mortgage qualification.

For many, the mortgage process can be scary, but it doesn’t have to be!

In order to qualify in today’s market, you’ll need a down payment (the average down payment on all loans last year was 5%, with many buyers putting down 3% or less), a stable income, and good credit history.

Throughout the entire home buying process, you will interact with many different professionals who will all perform necessary roles. These professionals are also valuable resources for you.

Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests to follow:

  1. Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score® of all closed loans in September was 731, according to Ellie Mae.
  2. Start gathering all of your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
  3. Contact a professional – your real estate agent will be able to recommend a loan officer who can help you develop a spending plan, as well as help you determine how much home you can afford.
  4. Consult with your lender – he or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
  5. Talk to your lender about pre-approval – a pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change) and demonstrates to home sellers that you are serious about buying!

Bottom Line

Do your research, reach out to professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner.



Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on November 16th, 2018 2:06 PMLeave a Comment

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October 22nd, 2018 1:04 PM

5 Tips for Starting Your Home Search

5 Tips for Starting Your Home Search | Keeping Current Matters

In today’s real estate market, with low inventory dominating the conversation in many areas of the country, it can often be frustrating to be a first-time homebuyer if you aren’t prepared.

In a recent realtor.com article entitled, “How to Find Your Dream Home—Without Losing Your Mind,” the author highlights some steps that first-time homebuyers can take to help carry their excitement of buying a home throughout the whole process.

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

This step will also help you narrow your search based on your budget and won’t leave you disappointed if the home you tour, and love, ends up being outside your budget!

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the ‘man cave’ of your dreams be a future renovation project instead of a make-or-break right now?

Before you start your search, list all the features of a home you would like and then qualify them as ‘must-haves’, ‘should-haves’, or ‘absolute-wish list’ items. This will help keep you focused on what’s most important.

3. Research and Choose a Neighborhood You Want to Live In

Every neighborhood has its own charm. Before you commit to a home based solely on the house itself, the article suggests test-driving the area. Make sure that the area meets your needs for “amenities, commute, school district, etc. and then spend a weekend exploring before you commit.”

4. Pick a House Style You Love and Stick to It

Evaluate your family’s needs and settle on a style of home that would best serve those needs. Just because you’ve narrowed your search to a zip code, doesn’t mean that you need to tour every listing in that zip code.

An example from the article says, “if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.”

5. Document Your Home Visits

Once you start touring homes, the features of each individual home will start to blur together. The article suggests keeping your camera handy and documenting what you love and don’t love about each property you visit. They even go as far as to suggest snapping a photo of the ‘for sale’ sign on the way into the property to help keep the listings divided in your photo gallery.

Making notes on the listing sheet as you tour the property will also help you remember what the photos mean, or what you were feeling while touring the home.

Bottom Line

In a high-paced, competitive environment, any advantage you can give yourself will help you on your path to buying your dream home.


Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on October 22nd, 2018 1:04 PMLeave a Comment

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August 3rd, 2018 1:47 PM

4 REAL Reasons Why We Buy A Home!

4 REAL Reasons Why We Buy A Home! | Keeping Current Matters

We often talk about why it makes financial sense to buy a home, but more often than not, the emotional reasons are the more powerful or compelling ones.

No matter what shape or size your living space is, the concept and feeling of home can mean different things to different people. Whether it’s a certain scent or a favorite chair, the emotional reasons why we choose to buy our own homes are typically more important to us than the financial ones.

1. Owning your home offers you the stability to start and raise a family

Between the best neighborhoods and the best school districts, even buyers without children at the time of purchase may have these things in mind as major reasons for choosing the locations of the homes that they purchase.

2. There’s no place like home

Owning your own home offers you not only safety and security, but also a comfortable place that allows you to relax after a long day!

3. You have more space for you and your family

Whether your family is expanding, an older family member is moving in, or you need to have a large backyard for your pets, you can take this all into consideration when buying your dream home!

4. You have control over renovations, updates, and style

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Tired of paying an additional pet deposit in your apartment building? Or maybe you want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t do just that in your own home?

Bottom Line

Whether you are a first-time homebuyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a home.


Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on August 3rd, 2018 1:47 PMLeave a Comment

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Are You Wondering If You Can Buy Your First Home?

Are You Wondering If You Can Buy Your First Home? | Keeping Current Matters

There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they get married or start a family, some might think they are too young, and still, some others might think their current incomes would never enable them to qualify for a mortgage.

We want to share what the typical first-time homebuyer actually looks like based on the National Association of Realtors’ most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first-time buyer:

Are You Wondering If You Can Buy Your First Home? | Keeping Current Matters

Bottom Line

You may not be much different than many people who have already purchased their first homes. Meet with a local real estate professional who can help you determine if your dream home is within your grasp today.


Posted by Cheryl Talbot ABR,GRI,e-PRO,MRP,SFR on July 15th, 2018 4:26 PMLeave a Comment

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