Why you need a loan preapproval

By Michele Lerner, realtor.com

Few experiences are more frustrating than falling in love with a home that's for sale and then discovering you can't afford to buy it. 

The majority of first-time buyers need to finance their home purchase, and a consultation with a mortgage lender is a crucial step in the homebuying process because you need to understand your purchasing power before you begin to look at homes.


Lenders offer borrowers a prequalification letter or a preapproval letter, but most real estate agents recommend that you get a preapproval before shopping for a home. A prequalification letter will state the amount a lender thinks you can borrow based on your income and your credit profile without any actual documentation. Mortgage-lending standards have tightened since the housing crisis, and all loans now require full documentation and verification of income and assets, so most sellers will only accept an offer from a buyer with a full preapproval letter that’s based on verified information.


Sellers aren't the only ones who benefit from you obtaining a loan preapproval, though. You're better off with a preapproval for two reasons:

  1. You'll have gone through the credit check and paperwork requirements for a mortgage, so you’ll have clarity about your ability to finalize a home purchase. If the lender finds a problem with your credit or an error on your credit report, you’ll have time to fix it before making an offer.
  2. Because your documentation will already be in place, a loan preapproval based on everything other than the actual value of the home you’ll purchase will speed up the process once you make an offer.

How to find a lender

Your real estate agent should be able to recommend a lender or two for you to interview, but you should also ask friends and colleagues for someone they trust. You can check for a loan officer's license and read reviews online to be sure you're working with someone reliable. As a first-time buyer, you should call a few lenders to find someone experienced with first-time buyer needs who can possibly help you identify special loan programs in your area that could help you get into a home.

What to expect from your lender

The best lenders take a collaborative approach with borrowers and explain all your loan options. When your lender checks your credit report, you should get feedback about ways to improve your credit profile and recommendations for how to handle your money between the time you apply for a loan and settlement day. Your lender should provide advice about when to lock in your loan rate and discuss the pros and cons of various loan programs.

What your lender expects from you

Your lender needs you to be honest about your finances and responsive to all requests for additional information, no matter how unimportant it may seem to you. The more cooperative you are with a lender, the easier the loan process will be. You should be prepared with tax returns, W-2s, bank statements, employer names and addresses and your current landlord's information.


Your lender will generate a loan approval based on your debt-to-income ratio and credit score, but you should also consider your budget and your own comfort level with a payment. There’s no need to borrow the maximum amount you qualify for, particularly if you know you plan to spend money on items that don’t show up on your credit report such as greens fees or ski trips. Your careful planning and preservation of your emergency fund are important for responsible, long-term homeownership.

Posted on December 12, 2013 at 7:47 pm
Elly Smith | Posted in Personal Finance, Real Estate Economics |

Survey:Home Ownership Extremely Important to Americans

Five years after the devastating housing crisis, adults still view home ownership in a positive way. A survey was taken by 1,000 adults. These were individuals from all over the country, and 88 percent believe that home ownership is very important.

They believe it to be an integral part of living the American dream. However, 55 percent of individuals surveyed reported that if they couldn’t own a home they would not feel less successful. About 66 percent of adults surveyed say their opinion regarding home ownership has remained the same.

Despite the fact that returning to a normalized housing market has been a slow process, the opinion of those surveyed hasn’t changed over the last five years. Studies show that renters much more likely to report an opinion change than homeowners.

It’s true that the housing market took a major hit. It’s also true that over one million homes went into foreclosure every year. However, despite these obvious problems, homeownership is still something that adults feel strongly about and strive to achieve.

The poll underscores the fact that people who just want to rent need to have affordable, quality rental homes available to them. Although most people’s views of homeownership haven’t changed, the poll found great differences between renters and homeowners. Basically, renters still want to rent and don’t plan on buying a home, even with record-low mortgage rates and home prices.

About 42 percent of renters are considering purchasing a home, and 55 percent of renters are not considering a home purchase. The poll also shows that 63 percent of the renters are likely to rent a housing unit, and 25 percent of renters will rent an actual property.

The poll shows that both homeowners and renters agree that buying a home is a complicated process. Both groups agree that purchasing a home requires beating down numerous obstacles, which are created by personal economics.

The majority of adults feel that they know enough about the available mortgage types, but for every four adults, there is one who doesn’t know much about mortgage options. The poll confirms that the process of purchasing a home creates great tension among consumers.

However, half of all Americans say they’re more prepared to buy a home now than ever before while 40 percent of Americans said they’re not as ready to buy a home as they used to be.

What do these results tell us? Well, they reveal that the majority of consumers can identify when it’s a good time to buy a home, and they feel that homeownership is still very important. However, the events that have occurred over the last five years have held them back from truly pursuing their dream of owning their own home.

Posted by  on Dec 4, 2013 in ColoradoFeaturedIdahoLocal TalkSeattle 

Posted on December 12, 2013 at 7:43 pm
Elly Smith | Posted in Purchasing Real Estae, Real Estate, Real Estate Economics |

Harvard: 5 Financial Reasons to Buy a Home



Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. This year he released a new paper on homeownership – The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available. 

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning. 

“Homeowners are able to deduct mortgage interest and property taxes from income…On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for many social and family reasons. It also makes sense financially.


Posted on December 12, 2013 at 7:37 pm
Elly Smith | Posted in Purchasing Real Estae, Real Estate, Real Estate Economics |

Selling Your Home During the Holidays? Now is the Time!

Today we are pleased to introduce Matt Sidford as our guest blogger.  Matt is the Founder of Sidford Realty and has been helping buyers and sellers in the Park City and Deer Valley markets since 1997

In today’s competitive real estate market, sometimes the standard, run-of-the-mill open houses aren’t yielding much success, and some sellers are choosing an alternative and effective method, that has been dubbed, “extreme open houses.”

With catered refreshments, prizes and entertainment, these events are causing quite a stir in the real estate world. By that, we mean that sellers are throwing elaborate parties in the guise of an open house, with hope that someone will buy their home. Some sellers hire local musicians and throw a fully catered party, equipped with champagne and expensive hors d’oeuvres. During the holidays, people are in a festive mood, and throwing a party is always a good idea to draw their attention.

The biggest advantage of an extreme open house is that potential buyers can see your home in a different light, giving you a chance to display some of your home’s attractive features. For example, if you are cooking food at your party, your guests can focus on your kitchen. Or, if you’re throwing a barbeque, you can get a chance to show off your favorite patio, drawing attention to some of your home’s best selling points.

Instead of showing a cold, empty home, you can attract potential buyers with a warm and vibrant home full of nice furnishings. Throwing a party in a warm and inviting home is a good idea even when you invite people who don’t intend to buy your home, since many of them will tell their friends about it.

Keep it simple

You don’t really need to throw an elaborate party to draw peoples’ attention, however, you can offer them some nice snacks and a glass of wine, giving them a chance to relax in the living room or the patio, and enjoy some of the comforts of your home. For starters, you can make a list of friends and acquaintances, and then send out some flyers with your contact information and a few facts about your home.

Are the holidays a good time to sell?

Although the holiday season isn’t really considered the best time to sell, the real estate market is much tighter, resulting in less competition for sellers. At the same time, motivated buyers are still in the market for homes, in hopes that they can make a purchase.

During the holidays, you can liven up your home with some lights and ornaments to attract buyers. Although you can make your home “shine” during the holidays, try not to overdo it. Homes often look their best during the holidays, but sellers should be careful not to overdo it on the decor. Too many ornaments could have a negative effect, and actually turn buyers away. Obviously, you don’t want to offend people, so be sure to go with tasteful decorations, as opposed to large and gaudy ones.

Also keep in mind that emotions play a big role in homebuyer purchases. A well organized home with a few tasteful decorations shows much better than a cluttered home with your kid’s toys lying around the living room. People will often purchase a home solely based on their gut feelings. If a buyer “falls in love” with your home, chances are they’re going to be more inclined to purchase it.

On a final note, it’s also a good idea to make it easy for people to stop by to see your home. In this case, flexibility is a key factor. People are busy during the holidays, and the chances of selling your home will be much greater if make it available for them to see.

Despite the fact that many people feel that the holidays aren’t a good time to buy or sell a home, this really isn’t the case. With a little knowledge and effort, you can sell your home in a timely manner, relax, and enjoy the Holidays!

Posted on December 12, 2013 at 7:34 pm
Elly Smith | Posted in Real Estate, Real Estate Economics |

Thanksgiving 2013: What to Know About Turkey Day

Pumpkin pie was not on the table at the first Thanksgiving—the first English recipe for the dish didn't appear until 1654. PHOTOGRAPH BY WALLY MCNAMEE, CORBIS

Article by Brian Handwerk for National Geographic PUBLISHED NOVEMBER 22, 2013

Thanksgiving is almost upon us—but how much do you know about America's favorite day to eat turkey?

Here's the lowdown on Thanksgiving history, holiday travel, football, feasting, and more.

Thanksgiving Dinner: Recipe for Food Coma?

Key to any Thanksgiving Day menu are a fat turkey and cranberry sauce.

An estimated 254 million turkeys were raised for slaughter in the U.S. during 2012, up 2 percent from 2011's total, according to the U.S. Department of Agriculture's National Agricultural Statistics Service.

About 46 million of those turkeys ended up on U.S. dinner tables last Thanksgiving—or about 736 million pounds (334 million kilograms) of turkey meat, according to estimates from the National Turkey Federation.

Minnesota is the United States' top turkey-producing state, followed by North Carolina, Arkansas, Missouri, Virginia, Indiana, and California. These "big seven" states produce more than two of every three U.S.-raised birds, according to U.S. Census Bureau data.

U.S. farmers also produced an estimated 768 million pounds (348 million kilograms) of cranberries in 2012, which, like turkeys, are native to the Americas. The top producers are Wisconsin and Massachusetts.

The U.S. grew 2.6 billion pounds (1.18 billion kilograms) of sweet potatoes—many in North Carolina, Mississippi, California, and Louisiana—and produced more than 1.2 billion pounds (544 million kilograms) of pumpkins. Illinois, California, Pennsylvania, and Ohio grow the most U.S. pumpkins.

In some homes, 2013's festivities will feature these traditional ingredients in some truly unusual recipes, thanks to the once-in-a-lifetime convergence of Thanksgiving and Hanukkah popularly dubbed "Thanksgivukkah."

But if you overeat at Thanksgiving dinner, there's a price to be paid for all this plenty: the Thanksgiving "food coma." The post-meal fatigue may be real, but the condition is giving turkeys a bad rap.

Contrary to myth, the amount of the amino acid tryptophan in most turkeys isn't responsible for drowsiness.

Instead, scientists blame booze, the sheer caloric size of an average feast, or just plain-old relaxing after stressful work schedules. (Take a Thanksgiving quiz.)

First Thanksgiving Menu—Pass the Passenger Pigeon?

Little is known about the first Thanksgiving dinner in Plimoth (also spelled Plymouth) Colony in October 1621, attended by some 50 English colonists and about 90 Wampanoag Native American men in what is now Massachusetts.

"We don't have a lot of information about what was actually on that table," said Kathleen Wall, culinarian at Plimoth Plantation.

We do know that the Wampanoag killed five deer for the feast, and that the colonists shot various types of wild fowl such as turkey, geese, ducks, quail, or passenger pigeons—which darkened the skies in the millions before going extinct a century ago. Some form, or forms, of Indian corn were also served. "This maize was a new product for them, and they were just learning how to use it," Wall explained. "They cooked it into porridges much like modern grits."

Wall said the feasters ate seasonally and likely supplemented their venison and birds with fish, mussels, eels, shorebirds, and nuts, as well as vegetables such as pumpkins, squash, carrots, and peas.

Like many modern holidaymakers confronting a groaning sideboard, the pilgrims were surprised by the amount and variety of food confronting them.

"Almost everyone who came to New England and wrote back [home] talked about the abundance," Wall said. "Everyone wrote about how rich the country was with fish, fowl, and deer. And the English brought things from their own gardens as well so they could supply themselves for ten months here in New England."

But much of what we consider traditional Thanksgiving fare was unknown at the first Thanksgiving. Potatoes and sweet potatoes hadn't yet become staples of the English diet, for example. And cranberry sauce requires sugar—an expensive delicacy in the 1600s. Likewise, pumpkin pie was missing—the first English recipe for the dish doesn't appear until 1654, Wall said.

If you want to eat like a Pilgrim yourself, try some of the Plimoth Plantation's recipes, including stewed pompion (pumpkin) or traditional Wampanoag turkey stew, or check out the inside of a 17th-century kitchen on the plantation's Pilgrim foodie blog Pilgrim Seasonings. (Related: "16 Indian Innovations: From Popcorn to Parkas.")

First Thanksgiving Not a True Thanksgiving?

Long before the first Thanksgiving, American Indians, Europeans, and people from other cultures around the world had often celebrated the harvest season with feasts to offer thanks to higher powers for their sustenance and survival.

In 1541 Spaniard Francisco Vásquez de Coronado and his troops celebrated a "Thanksgiving" while searching for New World gold in what's now the Texas Panhandle.

Later such feasts were held by French Huguenot colonists in present-day Jacksonville, Florida (1564); by English colonists and Abenaki Indians at Maine's Kennebec River (1607); and in Jamestown, Virginia (1610), when the arrival of a food-laden ship ended a brutal famine. (Related:"400-Year-Old Seeds, Spear Change Perceptions of Jamestown Colony.")

But it's the 1621 Plimoth Thanksgiving that's linked to the birth of our modern holiday. To tell the truth, though, the first "real" Thanksgiving happened two centuries later.

Everything we know about the three-day Plimoth gathering comes from a description in a letter written in 1621 by Edward Winslow, leader of the Plimoth Colony. The letter had been lost for 200 years and was rediscovered in the 1800s.

In 1841 Boston publisher Alexander Young printed Winslow's brief account of the feast and added his own twist, dubbing the 1621 feast the "First Thanksgiving," though the letter describes a one-time event that was more harvest celebration than thanksgiving, which in the 17th century would have actually included fasting.

But after its mid-1800s appearance, Young's designation caught on—to say the least. U.S. President Abraham Lincoln declared Thanksgiving Day a national holiday in 1863. He was probably swayed in part by magazine editor Sarah Josepha Hale—the author of the nursery rhyme "Mary Had a Little Lamb"—who had suggested Thanksgiving become a holiday, historians say.

In 1941 President Franklin Roosevelt established the current date for observance, the fourth Thursday in November.

Thanksgiving Turkey-in-Waiting

Each year at least two lucky turkeys avoid the dinner table, thanks to a presidential pardon—a long-standing Washington tradition of uncertain origin.

Since 1947, during the Truman Administration, the National Turkey Federation has presented two live turkeys—and a ready-to-eat turkey—to the president, federation spokesperson Sherrie Rosenblatt said in 2009.

"There are two birds," Rosenblatt explained, "the presidential turkey and the vice presidential turkey, which is an alternate, in case the presidential turkey is unable to perform its duties."

Those duties pretty much boil down to not biting the president during the photo opportunity with the press.

The lucky birds once shared a happy fate similar to that of Super Bowl-winning quarterbacks—a trip to Disneyland's Big Thunder Ranch in California, where they lived out their natural lives. Today the 40-pound (18-kilogram) toms enjoy Christmas at George Washington's Mount Vernon Estate and Gardens, then move to a permanent home at Morven Park in Leesburg, Virginia.

Talking Turkey

Pilgrims had been familiar with turkeys before they landed in the Americas. That's because early European explorers of the New World had returned to Europe with turkeys in tow after encountering them at Native American settlements. Native Americans had domesticated the birds centuries before European contact.

A century later Ben Franklin famously made known his preference that the turkey, rather than the bald eagle, should be the official U.S. bird, explaining in a letter to his daughter that it was "a much more respectable Bird, and withal a true original Native of America."

But Franklin might have been shocked when, by the 1930s, hunting had so decimated North American wild turkey populations that their numbers had dwindled to the tens of thousands, from a peak of at least tens of millions.

Today, thanks to hunting regulations and reintroduction efforts, "rafters" and "gangs" (never "flocks") of wild turkeys are back in abundance. (Watch a video of wild turkeys.)

Some seven million wild turkeys are thriving across the U.S., and many of them have adapted easily to the suburbs—their speed presumably an asset on ever encroaching roads.

Wild turkeys can run some 10 to 20 miles (16 to 32 kilometers) an hour and fly in bursts at 55 miles (89 kilometers) an hour. Domesticated turkeys can't fly at all.

When they're not being the center of a Thanksgiving feast, turkeys enjoy quite a diverse spread themselves. The omnivore birds eat everything from nuts and berries to insects and snakes.

Turkeys digest this diet with what becomes a prize portion for many a human feast—the gizzard. The gizzard is the muscle that enables turkeys to crush and chew their food, helped along by small stones the birds swallow.

On Thanksgiving, Pass the Pigskin

During the Plimoth Thanksgiving—which was not one giant meal but three full days of feasting, Wall explained—sporting events were part of the celebration. Target shooting figured prominently among the male-dominated crowd. And teams took to the field to compete in stool ball. "There are several different versions" of stool ball, Wall explained, "but it's kind of a proto-cricket where teams throw a ball around and try to keep a stool safe."

The game has changed, but sports still take center stage for at least part of the modern holiday. For many U.S. citizens, Thanksgiving without football is as unthinkable as the Fourth of July without fireworks.

NBC Radio broadcast the first national Thanksgiving Day game in 1934, when the Detroit Lions hosted the Chicago Bears. Except for a respite during World War II, the Lions have played—usually badly—every Thanksgiving Day since.

For the 2013 game, the 74th, they will take on the Green Bay Packers.

Macy's Thanksgiving Day Parade

For a festive few, even turkey takes a backseat to the Macy's Thanksgiving Day Parade in New York City, originally called the Macy's Christmas Parade because it kicked off the shopping season. (Just published: "Animal-Rights Activists Take Air Out of Macy's Thanksgiving Parade.")

The tradition began in 1924 when employees recruited animals from the Central Park Zoo to march on Thanksgiving Day. Helium-filled balloons made their debut in the parade in 1927 and, in the early years, were released above the city skyline with the promise of rewards for their finders.

The Macy's Thanksgiving Day Parade, first televised nationally in 1947, now draws some 44 million viewers—not counting the three million people who actually line the 2.5-mile (4-kilometer) Manhattan route.

Thanksgiving weekend also boasts the retail version of the Super Bowl—Black Friday, when massive sales and early opening times attract frugal shoppers.

National Retail Federation (NRF) survey projects that up to 140 million Americans will either brave the crowds to shop on 2013's Black Friday weekend or take advantage of online sales, continuing a two-year downward dip from 2011's 152 million shoppers.

This year, for the first time, the NRF asked those planning to shop if they'll do so on Thanksgiving Day itself. Much to the chagrin of many retail employees, nearly one-quarter of them said yes.

Online shoppers have their own red-letter day on the Monday after Thanksgiving.  Cyber Monday was officially introduced in 2005 by the NRF because retailers noticed that bargain chasers were taking to online shopping venues in large numbers on that day. In 2012 approximately 129 million people opened their wallets on Cyber Monday.

Planes, Trains, and (Lots of) Automobiles

It may seem like everyone in the U.S. is on the road on Thanksgiving Day, keeping you from your turkey and stuffing.

That's not exactly true, but almost 39 million of about 317 million U.S. citizens will drive more than 50 miles (80 kilometers) from home for the 2013 holiday, according to the American Automobile Association. That's a 1.5 percent decline from last year.

"For those traveling, the good news is motorists will receive a holiday bonus in the form of lower gas prices, which are at their lowest levels for the holiday since 2010," AAA Chief Operating Officer Marshall L. Doney said in a statement.

Most states will have stations selling gas for under $3 a gallon, AAA added.

An additional 3.14 million travelers will fly to their holiday destinations, and 1.4 million others will use buses, trains, or other modes of travel.

Wondering what day would be best to stay at home? Wednesday figures to be the busiest day for all modes of travel. The AAA survey found that 37 percent of travelers are planning to begin their trips Wednesday and most (33 percent) will return home on Sunday.

An additional 24 percent, however, will stretch their holiday weekend into Monday, December 2, or beyond. The average Thanksgiving road trip for 2013 clocks in at just over 600 miles (966 kilometers).

Thanksgiving North of the Border

Cross-border travelers can celebrate Thanksgiving twice, because Canada celebrates its own Thanksgiving Day the second Monday in October.

As in the U.S., the event is sometimes linked to a historic giving of thanks with which it has no real ties—in this case, a ceremony held in 1578 by explorer Martin Frobisher and his crew in gratitude for their safe landing in what is now New Brunswick.

Canada's Thanksgiving, established in 1879, was inspired by the U.S. holiday.

Dates of observance have fluctuated—sometimes coinciding with the U.S. Thanksgiving or the Canadian veteran-appreciation holiday, Remembrance Day—and at least once Canada's Thanksgiving occurred as late as December.

But Canada's colder climate eventually led to the 1957 decision that formalized the October date.


Posted on November 22, 2013 at 7:51 pm
Elly Smith | Posted in Home Improvement, Real Estate, Real Estate Economics, Uncategorized |

Happy Thanksgiving to you all!

“Not what we say about our blessings, but how we use them, is the true measure of our thanksgiving.” ― W.T. Purkiser


Posted on November 20, 2013 at 6:50 pm
Elly Smith | Posted in Home Improvement, Real Estate, Real Estate Economics, Uncategorized |

Holidays in Downtown Everett

Great deals from great shops. Small business Saturday is the perfect day to finish up your holiday shopping downtown.


The holiday shopping season is upon us, and downtown businesses are ready for bargain hunters. Mark your calendar for Saturday, November 30th – a day dubbed “Small Business Saturday” – when shoppers nationwide head out to support their local small businesses. This year, down Everett small businesses are offering some fantastic deals to holiday shoppers on Saturday only. Check out these offers from downtown Everett’s shops, along with specials from local restaurants to fuel your shopping spree. 


Posted on November 20, 2013 at 6:24 pm
Elly Smith | Posted in Home Improvement, Real Estate, Real Estate Economics |

5 Reasons to Sell Before Spring




Vermont-AutumnMany sellers feel that the spring is the best time to place their home on the market as buyer demand increases at that time of year. However, the fall and winter have their own advantages. Here are five reasons to sell now.

Only Serious Buyers Are Out

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere 'lookers'. The lookers are at the mall or online doing their holiday shopping.

There Is Far Less Competition

Housing supply always shrinks dramatically at this time of year. The choices for buyers will be limited. Don't wait until the spring when all the other potential sellers in your market will put their homes up for sale.

The Process Will Be Quicker

One of the biggest challenges of the 2013 housing market has been the length of time it takes from contract to closing. Banks have been inundated with both purchase and refinancing loan requests. Both of these will slow in the winter cutting timelines and the frustration these delays cause both buyers and sellers.

There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 25% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with historically low interest rates right now. There is no guarantee rates will remain at these levels in years to come.

It's Time to Move On with Your Life

Look at the reason you decided to sell in the first place and decide whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire. That is what is truly important.

Posted on November 19, 2013 at 6:16 pm
Elly Smith | Posted in Real Estate, Real Estate Economics |

Where Prices are Headed over the Next 5 Years


Home-Price-Expectation-275Today, many real estate conversations center on housing prices and where they may be headed. That is why we like theHome Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

The latest survey was released last week. Here are the results:

  • Home values will appreciate by 4.3% in 2014.
  • The average annual appreciation will be 4.2% over the next 5 years
  • The cumulative appreciation will be 28% by 2018.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 16.8% by 2018.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

Posted on November 16, 2013 at 12:27 am
Elly Smith | Posted in Real Estate, Real Estate Economics |

How Much Mortgage Can You Afford?

Finance   |  Sep 5, 2013   |  By:   |  


Before you apply for a home loan, evaluate your personal finances. How much you earn versus how much you owe will likely determine how much a lender will let you borrow. Read on to learn how to do the math. (You can also use our Home Affordability Calculator to determine how much house you can afford.)

Add Up Your Income

First, determine your gross monthly income. This includes any regular and recurring income that you can document. If you can’t document the income, or if it doesn’t show up on your tax return, then you can’t list it to qualify for a loan. However, you can use unearned sources of income such as alimony or lottery payoffs. And if you own income-producing assets such as real estate or stocks, the income from those can be estimated and used in this calculation. If you have questions about your specific situation, any good loan officer can review the rules.

Add Up Your Debt

Next, calculate your monthly debt load. This includes all monthly obligations like credit cards, installment loans, car loans, personal debts or any other monthly payment like alimony or child support. For revolving debt like a credit card, use the minimum monthly payment for this calculation. For installment debt, use the current monthly payment. And you don’t have to consider a debt at all if it is scheduled to be paid off in less than six months. Add everything up to get a figure we’ll call your monthly debt service.

How Lenders Calculate What You Can Pay

Most lenders don’t want you to take out a home loan that will overload your ability to repay everyone you owe. Although every lender has slightly different formulas, here is a rough idea of how they look at the numbers.

Typically, your monthly housing expense, including monthly payments for taxes and insurance, should not exceed 28 percent of your gross monthly income. If you don’t know what your tax and insurance expense will be, estimate about 15 percent of your payment. The remainder can be used for principal and interest repayment.

In addition, your proposed monthly housing expense and your total monthly debt service combined cannot exceed 36 percent of your gross monthly income. If it does, your application may exceed the lender’s underwriting guidelines, and your loan may not be approved.

Depending on your individual situation, there may be more or less flexibility in the 28 percent and 36 percent guidelines. For example, if you can make a large down payment and thus borrow less than 80 percent of the home’s value, the qualifying ratios become less critical. Likewise, if a rich uncle is willing to co-sign the loan, lenders will be much less focused on the guidelines discussed here.

Explore Your Loan Options

Remember that there are hundreds of loan programs available in today’s lending market, and each has different guidelines. So, don’t be discouraged if your dream home seems out of reach.

Also keep in mind that you control a number of factors that affect your monthly payment. For example, you might choose to apply for an adjustable-rate loan, which has a lower initial payment than a fixed-rate program. Or you can make a larger down payment, which will lower your projected monthly payment.

Posted on November 16, 2013 at 12:22 am
Elly Smith | Posted in Real Estate, Real Estate Economics |