21 Jun 2019
By Kevin Gahagan

Pros And Cons Of Installing A Pet Door

Real Estate

Pros And Cons Of Installing A Pet DoorIf you’ve just moved into your new home and you have a pet, you may be thinking of installing a pet door. A pet door is a permanent door feature that is cut into the bottom third of an entry door. Before making a permanent alteration to your door, consider the pros and cons of installing a pet door. 

Pro: Your Pet Can Come And Go As Needed

A pet door could cut down on indoor pet accidents if that’s a problem you’ve had to deal with in the past. This is especially convenient if you get home late to let the dog out, or if they have a temporary gastric illness that requires more frequent outings. 

Con: An Unwanted Visitor Could Get Inside

Pet doors are designed to give egress to pets, but your pet door might give indoor access to an unwanted animal. It’s not common, but it does occur, particularly in areas where wildlife is abundant.

Pro: You Could Do Without A Litter Box

Cats can be trained to go outdoors instead of using a litter box. With a pet door, you can dispense with the odorous litter box entirely, knowing your cat will always be able to take care of business outside.

Con: It’s Something Else You Must Remember To Lock

Most pet doors have a locking mechanism for times when you need to secure the home, such as at night. But this is just one more thing you’ll have to remember to do, along with setting the alarm and locking windows. And, the more you have to remember, the more you could forget.

Pro: Better Energy Efficiency

Anyone with pets knows that they can ask to go out and come back in numerous times per day. Every time you open the door you’re letting hot air in, cooled air out, or vice versa. With a pet door, your conditioned air stays in the home much better because there’s a smaller opening, and less time spent with the door open.

Con: New Homebuyers Might Not Want It

If you ever sell your home, the new homebuyers might see a pet door as a negative. Since a quality new door costs around $500, they could ask for a price discount on the home purchase.

A pet door can be a huge convenience, but there are some drawbacks as you can see. However, depending on your view (and the opinion of your pet!) the pros may outweigh the cons.

If you are interested in buying a new home or refinacing your current property, be sure to contact your trusted home mortgage professional to discuss your current financing options.

 

 

20 Jun 2019
By Kevin Gahagan

NAHB: Builder Confidence Slips in June

Market Outlook

NAHB Builder Confidence Slips in JuneHomebuilder confidence dropped two points in June according to the National Association of Home Builders Housing Market Index. June’s index reading was 64, which indicates strong sentiment among home builders for current housing market conditions.

NAHB component readings also dropped in June with builder confidence in current home sales one point lower at an index reading of 71. Home builder confidence in home sales conditions over the next six months dropped two points to 70 and builder confidence in buyer traffic was one point lower at 48. Buyer traffic readings seldom exceed the NAHB benchmark reading of 50. Index readings over 50 indicate that most builders have positive sentiment toward conditions surveyed.

Home Builders Cite Ongoing Concerns and Growing Worry Over Tariffs

Home builders surveyed for June’s Housing Market Index cited continued concerns over shortages of labor and buildable lots, but also worried over increased materials costs resulting from recent tariffs. Analysts said that high demand for homes is driven by a current shortage of several million available homes; demand should be driving builder sentiment and housing starts much higher than current levels. Builder sentiment reported in the Housing Market Index typically drove housing starts, but this hasn’t been the case in the aftermath of the housing crisis. Severe shortages of homes for sale drive home prices up; this creates competition between buyers and sidelines first-time and moderate income home buyers.

While buyer traffic is robust, headwinds including high home prices and concerns about general economic conditions could be keeping would-be buyers on the fence. Low mortgage rates, which may drop further if the Federal Reserve lowers its key lending rate, could prompt more buyers to enter the market, but rapidly rising home prices in recent years have caused would-be buyers to hold off on buying homes. Faced with few options and high home prices, buyers may be waiting until more homes come on the market. Industry leaders have long said that building more homes is the only way to resolve the shortage of homes and high demand from home buyers.

Faced with rising materials costs and strict zoning rules, builders are tasked to find affordable housing solutions when fewer buildable lots and zoning rules discourage higher density affordable housing developments.

 

19 Jun 2019
By Kevin Gahagan

Buying A Home In Foreclosure

Real Estate

Buying A Home In ForeclosureForeclosure is a process that happens over many months. There are various opportunities to acquire real estate that is in a different stage of foreclosure, including before the foreclosure process completes. This short guide identifies the different stages and the opportunities that may exist to acquire a property at a discounted price.

Get The Money Lined Up First

To acquire a property at any part of the foreclosure process requires cash or pre-approved credit. Have the full amount of cash available to pay for the transaction or have a recent pre-approval letter from a reliable lender. The letter shows the amount of mortgage financing available and approved for buying a foreclosure.

Pre-Foreclosure

Before a lender forecloses on a home, to take legal possession of it, they must go through a legal process filed with the courts. All those legal filings are public records.

The borrower, who is in default on the loan, gets a legal “Notice of Foreclosure” that gives a date when the foreclosure will occur. There are subscription services that collect these dates from the court records and assemble a database of information about the properties coming up for foreclosure.

Up until the foreclosure date, it is possible for the homeowner to make a deal to sell the home, which pays off the lender and that stops the foreclosure.

Sometimes the existing loan can be acquired and the past-due payments brought up to date and that is all that is needed to satisfy the lender. In other cases, the outstanding loan must be paid off entirely or refinanced by the new owner.

To find an attractive deal in this stage of the foreclosure, a real estate investor looks for a property that has significant equity and the loan(s) on the property are far below the market value of the property.

If the home continues to foreclosure then the existing owner will lose all the equity they have in the property. This makes the owner very motivated to sell the property at any price, even at a steep discount, which helps them to not lose everything.

Foreclosure Auction Sales

Some lenders immediately put a property up for auction right after foreclosure. An investor with an interest in these foreclosed properties, bids with other bidders at the auction. The highest bid wins.

All that is needed is to get on the mailing list to be informed of upcoming auctions and have a cashier check in hand for the required deposit at the auction to be able to bid.

REO Properties

Other lenders take ownership of foreclosed properties and then sell them off through authorized broker/dealers who work for the lender. Some lending systems, like HUD, for example, maintain a public database online that shows all the foreclosed properties that are for sale and their minimum offer price.

Creating personal relationships with the bank/lending officers who manage REO properties is a terrific way to get leads. It helps to have the first chance to buy a foreclosed property, which is recently added to a lender’s REO system, that other investors may not yet know about.

Conclusion

Foreclosed properties may create significant opportunities; however, there are also serious risks when buying these properties because they are sold on an “as-is” basis. This type of investment is definitely a “buyer be aware” opportunity. It can be lucrative, yet investors need to be careful as well.

If you are interested in trying to find a foreclosed property, one of the most important steps is getting your financing pre-approved. Be sure to contact your trusted home mortgage professional to discuss your current financing options.

18 Jun 2019
By Kevin Gahagan

The Benefits Of Adding An In-Law Apartment To A Home

Real Estate

The Benefits Of Adding An In-Law Apartment To A HomeOne renovation that may add value to a home is an in-law apartment. Even if a homeowner does not have any relatives, an in-law apartment makes wonderful guest accommodations. It is possible to rent it when unoccupied to earn some money.

Homeowners who rent out part of a home need to check with their insurance agent to upgrade insurance to accommodate commercial use of a part of the home.

Additionally, a person staying in an in-law apartment, who is not a member of the owner’s household, may need to get renter’s insurance to cover any personal property kept in the in-law apartment.

Renovation Plans

An in-law apartment may be in a basement or attic. Creating one is possible as a home addition, a garage makeover, or as a tiny house in the backyard.

Check the building regulations for the area where the home is. It is wise to get the proper building permits needed for the construction. Work done without permits usually does not add value when reselling because it creates a liability.

Some people make an in-law without having to do major renovations if partitioning the house is possible. It may be possible to separate an area to create an in-law apartment if the house has an extra bedroom with a connected bathroom.

If no existing part of the home is suitable for remodeling, then adding an addition is an option. A better choice for a backyard that usually increases the resale value is building an in-law cottage rather than investing in installing a swimming pool. Some people may prefer having in-law accommodations when compared to the cost of maintaining a swimming pool.

Multiple Uses For An In-Law Apartment

Almost everyone has a use for an in-law apartment. This is why they are attractive to potential home buyers. Children can stay with parents as they become adults. Elderly parents can live with their children. Couples without children can use the room as a home office. Single people can rent out the space to help pay the bills.

Use of the space may change over time, so be sure to think creatively about the space. The value-added for having this space is the privacy it allows. Living together is normally easier when the parties also have some privacy.

Having a private bathroom, a separate entrance, and a kitchenette in the in-law apartment covers all the needs. This allows the space to be self-contained.

Summary

Consider adding an in-law apartment for the convenience, potential improvements in the resale value of the home, and to reduce the expense of supporting family members who live elsewhere and pay rent for an apartment to others.

If adding additional space for in-laws or guests sounds like a good fit for your family, you may want to consider accessing some of your home equity funds to cover the cost of renovation. Be sure to contact your trusted home mortgage professional for current financing options.

17 Jun 2019
By Kevin Gahagan

What’s Ahead For Mortgage Rates This Week – June 17th, 2019

Financial Reports

What’s Ahead For Mortgage Rates This Week – June 17th, 2019Last week’s economic reports included readings on inflation, retail sales and consumer sentiment. Weekly readings on mortgage rates and first-time jobless claims were also released.

Consumer Price Index Lower in May as Retail Sales Hold Steady

Last month’s Consumer Price Index, which is a widely-used gauge of inflation, dropped to 0.10 percent in May and matched expectations. April posted month-to-month growth of 0.30 percent. Core inflation, which excludes volatile food and fuel sectors, rose 0.10 percent in May and fell short of expectations of 0.20 percent growth.

April’s Core Consumer Price Index grew by 0.10 percent. Analysts reported a likely slowdown in economic expansion last week. Consumers, vendors and financial analysts said trade wars and global economic uncertainty were factors in concerns over economic conditions.

Retail sales rose from April’s reading of 0.30 percent to 0.50 percent in May; retail sales without automotive sales held steady with 0.50 percent growth. April retail sales also had 0.50 percent growth.

Mortgage Rates Stay Near Two Year Low

Freddie Mac reported average mortgage rates were little changed last week. 30-year mortgage rates averaged 3.52 percent and were unchanged from the prior week. 15-year fixed mortgage rates averaged 3.26 percent and were two basis points lower.

5/1 adjustable rate mortgages dropped one basis point to 3.51 percent on average. Discount points averaged 0.60 percent for 30-year fixed rate mortgages, 0.50 percent for 15-year fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims rose to 222,000 claims filed last week, which exceeded expectations of 218,000 new claims based on the prior week’s reading of 219,000 initial jobless claims. Analysts said that labor markets remained solid, but layoffs in California and Pennsylvania caused new jobless claims to rise last week.

The University of Michigan reported lower consumer sentiment in June with an index reading of 97.90 as compared to May’s reading of 100.00; 40 percent of consumers surveyed cited concerns over pending tariffs against Mexico for falling confidence in economic conditions.

The tariffs against Mexico were sidelined, which may boost consumer confidence readings in July. When tariffs were set against imports from China, only 21 percent of survey participants identified tariffs as cause for concern.

What‘s Ahead

This week’s scheduled economic releases include reports from the National Association of Home Builders on housing markets conditions, the Federal Reserve’s FOMC meeting statement and a press conference from Fed Chair Jerome Powell. Data on sales of pre-owned homes will be released along with weekly readings on mortgage rates and new jobless claims.