Do Mortgage Rates Interest You?

With over 60% of the public owning their own home, and a high percentage of the rest stating a desire to, the interest rates on mortgages should keep your interest. With the holidays, cold weather, Super Bowl and stock market plunge, it was easy to miss the upward creep of mortgage rates the last 4 weeks. Pretty much everyone has been warning of rising rates for many years now, as they have remained historically low since 2008 or so. That’s 10 years of ultra low rates. 10 years of homeowners locking in low rates. Will this be the year they truly rise? No one knows for certain, but when they do, lots of people will kick themselves for not buying or refinancing sooner.

Whether a first time buyer, a move-up buyer, relocation buyer, downsizing buyer, sideways buyer for different area; or those refinancing from a rising adjustable rate to a fixed, getting rid of Private Mortgage Insurance, have better credit now, consolidating loans, or just haven’t gotten around to it in 10 years. All of these situations may call for a new home loan, and the interest rate can affect your decision of when and how much, especially when buying. In addition, most every year, the fastest home price appreciation happens from March to June, when the highest number of buyers are writing offers, and I expect this year to be the same. Lately, it has averaged a half to one percent price rise per month for those 4 months. If rates stay the same or drop back, you don’t lose as much, but if they go up, you may lose twice. **One instance where it may pay to wait 3 or 4 months – if you need a high appraisal to hit that 20% equity number on a refinance to eliminate PMI, it will help to have the higher spring sale prices closed for the appraiser to use.

Today, a fixed 30 year mortgage is running around 4.25% with no points. A month ago they were 3.87%. You can lower that rate with a shorter term loan of 20, 15 or even 10 years by a half percent or more to lock in the 3s. This makes a lot of sense when refinancing a loan that has less than 20 years left on it, as your payment should be similar if not less, you still pay off at the same time (not go back to a 30 year schedule), and you can get a lower rate on the shorter term loan. Pay it down faster and build your equity!

This is The Home Equity Coach talking — it is early February, buy in the next 6 weeks and ride the price wave. If you have a home to sell, put it on the market after you buy or even move and get the best of both worlds! Plus locking in a still-low interest rate? Practically money in the bank. If you cannot do this financially, I will walk you thru your still-good options. Now contact me and let’s get to work!

HEC Yeah! The Home Equity Coach

To build on my article from 2 weeks ago – accelerating home equity to Increase your Net Worth Faster – I have now coined it the Home Equity Coach program and have purchased www.TheHomeEquityCoach.com.  I plan to expand this free program over the next 12 months, as I strongly believe in building wealth thru real estate ownership, among your other investments such as stocks and businesses.  Since the road is not always clear on how to get there, I am offering my service on this important financial asset that can be easily overlooked and taken for granted .  Of course, I will continue my main occupation as a Realtor representing home sellers and buyers for years to come.  This program is a supplemental guide for homeowners to realize a larger payoff upon selling, which can then be used for a larger down payment on the next home, pay down other debts, invest in retirement funds, or however you wish! 

 

Financial experts seem to agree that the proper percent of home equity compared to your total net worth should be in the 20%-30% range, meaning if your net worth is $500,000 that your home’s value minus the loan(s) is $100,000 – 150,000.  This percent will fluctuate substantially over your lifetime – smaller when buying your first home, and higher when selling your last one.  Currently, the average person’s home equity is a much higher % of their total financial worth, as the average savings/investing rate is lower than it should be.  So even though my goal is to build your equity faster, I also believe you need to be properly invested and balanced in different asset classes.  You should not be house-rich and cash-poor.

I have represented 365 clients buying and selling a wide variety of homes and locations over a 27 year career that includes managing other agents for five years.  This experience has given me many insights on how to make a financially-smart purchase, to grow that value while enjoying your life there, paying down the debt sooner, and eventually selling it with a larger check in hand.  I can enter the picture in any of these stages to lend guidance in achieving these goals with you.  It can apply to your own home or to rental homes you own.  This is NOT a get-rich-quick scheme; buy-for-zero-down investment; flipping-houses-with-other-people’s-money; or anything you have heard advertised.  Nor is it designed to sell you a larger home (unless you want to of course, then I am happy to :).  I simply feel bad for folks that have missed opportunities to accelerate their wealth during their home ownership using tools already available to them.  In the end, I hope to earn/ keep your business when it is time to buy and sell homes.  That’s it!

If this terminology intimidates you, don’t worry, I can simplify.  If it is too basic, it is supposed to be.  The concept here is not difficult to grasp, just difficult to maintain the discipline, that is where having a coach can be invaluable.  Contact me soon to arrange a home visit where we can begin your plan.  Time to bring in the Coach!

Happy HEC-ing!

Increase your Net Worth Faster

Home “equity” is simply your home’s value minus what you owe on it.  Many of us have a rough idea of what our home is worth and also what we owe on it.  Several years ago, 25% of home owners had a negative number, severely hampering their ability to move or refinance.  Fortunately today, few owners are in that position as average home values have risen steadily for 5 years.  I believe you should have a clear picture of these two numbers, and how to drive them further, as it can be a large percentage of your net worth.  It can harm you, and it can help you, in house matters and in other life pursuits.  Your home equity is an important figure – you should have more than a vague idea of what it is and how to increase it.   Even as you closely track your assets and investments, this may be a higher priority as you can take several steps to build it, and limit your risk of losing your home.

I am offering to assist you in focusing closely on (1) what your house is truly worth; (2) how to increase that value without overspending; (3) evaluating how and where to get maximum return on repairs and improvements; (4) comparing home loan options on purchase and refinance that work best for you; and (5) making that mortgage work for you.

I offer these services for free in the hopes of earning your business in the future, and referrals of those you know in the immediate term looking to sell or buy homes.  Consider me an unbiased third party on home improvements and loans, as I do not financially gain from the choices you make.  I would not steer you wrong in these matters knowing that you may come to me later to sell your home, and I have to answer to my recommendations.  Also, I can give you hard figures to track your home equity amount so you have a clear number to work with, which can benefit you in several ways; plus I can document your repairs and improvements for an easy record (now required by title companies for 12 month period prior to sale) of paid receipts, lien waivers and warranties when it is time to sell.

If you don’t own a home, let’s change that and start building your equity for 2018.  It can be exciting to watch how leveraging a down payment on a home purchase that is appreciating in today’s market can dramatically magnify your net worth!  Leveraging works in reverse too, I can show you how to be mindful of that.  If you are not completely sure of how this works, take the time to understand this basic principle of finance.  Another principle worth understanding is the magic of compounding – it is not just for interest on your savings, it works on your mortgage payoff too!

Happy equity building!

Home Front News

Spring sales have been strong – My business is ahead of last year, and homes are selling at a brisk pace, but do not think they are all selling over list price, that is still the exception.  Certain areas and price ranges have a heavier demand and higher percentage of multiple offers, but many buyers shy away from competing bids, and are waiting for the initial rush to die off after one or two weeks, then revisit.

Mortgage rates have eased down to 4.0% on a 30 yr fixed no points, down from 4.25% a month ago.

The Economist last week wrote “Millennials Really like St Louis“, citing us as the 4th most popular metro for this age group in the country, ahead of Chicago, Seattle and most others. That follows our recognition this year for the nation’s best park, best zoo, and best custard. Young buyer appeal has been evidenced by the strong home sales this spring. Way to go St Louis!!

Condo/villa sales continue to pick up, due to 3 main factors: rising single family prices, walkability access to desirable areas, and increasing desire for simplification and low maintenance lifestyles.

For the sixth consecutive year, Coldwell Banker Gundaker and NRT LLC’s parent company, Realogy, has received the prestigious designation of being named among the World’s Most Ethical Companies.  This award, presented by the Ethisphere® Institute, highlights companies that outperform their industry peers for ethical conduct.  As part of Realogy and the NRT family of companies, Coldwell Banker Gundaker strives to set the standard for ethical conduct in the market.

Happy spring cleaning!

Gary’s HomeFront News

Fall sales have held strong, – I have sold 3 homes in the last 4 weeks heading into the holidays, all in the Parkway South, Manchester – 63021 submarket.  The number of homes on the market continues to be tight heading into winter, with many buyers choosing this time of year to buy rather than the more competitive spring and summer markets.  Home price appreciation appears to be in the 4% range for the year for St Louis, continuing a steady move upward since 2012, recapturing the lost equity for so many homeowners from 2008-2011.

Since the election two weeks ago, mortgage rates have moved up significantly from 3.5% to 4.0% on a 30 year fixed.  If you long for the days in the low 3s, you can still get a 15 yr fixed at 3.25%.

The St Louis area added 3500 jobs in October, as the metro employment continues to grow at the fastest pace in 20 years.  The Bureau of Labor Statistics show a gain of 32,500 jobs in the metro over the last 12 months, amounting to a 2.6% increase, well ahead of the US average of 1.7%.

In between holiday prep and gatherings, don’t forget to perform a few pre-winter tasks on your home — pool and irrigation system closings, disconnect outside hoses, have the chimney and gutters cleaned, change furnace filter (and smoke alarm batteries if you did not at time change), and get the snow shovel ready!

Our annual office Thanks dinner for the Des Peres Police and Fire was today.  We appreciate all the police and fire district personnel around STL and the country!