Dealing with the Emotional Stress of Selling Your Childhood Home

Dealing with the Emotional Stress of Selling Your Childhood HomeSelling a childhood home can be emotionally stressful and even traumatizing. This is more than a house; it is a home where years and even decades of memories have been made and where lives have been lived. While selling a childhood home may be difficult to do, there are a few steps that can be taken to reduce the emotional turmoil that may be felt during this process.

Create A Final Memory

When a family has lived in a home for many years, it may feel almost as though the home has become a part of the family in a way. One way to deal with the emotional stress of saying goodbye to the home is to create a final memory with family in the home. This may be to host a family dinner that enables everyone to walk through the home one final time and to reminisce together about the past.

Take Pictures Of The Space

Whether a final family get-together is planned for the home or not, taking pictures of the home before vacating it can be beneficial. These pictures can help to preserve the memories of the space itself, and close-up pictures of special features of the home that hold significance can be taken. Creating an album of these pictures may be ideal in some cases.

Preserve Memories Of The Home

With a childhood home, there is a good chance that there are hundreds of pictures that have been taken inside the home and in the yard, and there may also be videos of home movies. While some will want to take new pictures of the home before leaving, another idea is to preserve the images of the home that have been taken over the years. This can celebrate the historical significance that the home played with the family over time.

Bring Traditions Into A New Home

While it is important to make final memories and to preserve memories, it is also important to move on. Letting go of one home means that it is time to start new traditions in a new home, and families can begin doing this with a special get-together. After all, while a home is important for a family, it is the family that truly makes the property a home.

It doesn’t matter if a family lived in the home for a few years or for several decades, saying goodbye to a childhood home is rarely easy to do. Contact a real estate professional to begin the selling process.

Federal Reserve FOMC Announcement

Federal Reserve FOMC AnnouncementThe stage was set in high suspense for FOMC’s post-meeting announcement on Wednesday. As fall approaches, analysts and the media are looking for any sign of when and how much the Fed will raise its target federal funds rate. According to CNBC, some analysts were projecting two interest rate hikes before year end, but the truth of the matter remains unknown until the Federal Open Market Committee announces its intentions.

Meanwhile, reports of what Fed rate hikes will mean for consumers were released prior to the FOMC statement. Real estate analyst Mark Hanson said that a rate hike would “crush” housing markets, which continue to improve slowly in spite of the current 0.00 to 0.25 percent federal funds rate.

Last Friday’s report on June sales of new homes shows unpredictable progress in housing. Analysts estimated that new home sales would reach 550,000 units based on May’s reading of 517,000 new homes sold. June’s reading came in at 482,000 units sold.

FOMC Statement: Current Federal Funds Rate “Remains Appropriate”

The Federal Open Market Committee of the Federal Reserved announced as part of its post-meeting statement that it would not immediately increase the federal funds rate. The FOMC statement cited concerns over the inflation rate, which remains below the Fed’s goal of 2.00 percent. According to the statement, the FOMC will not move to raise the federal funds rate until the committee is “reasonably confident” that inflation will achieve the committee’s goal of 2.00 percent over the medium term.

No prospective dates for raising the target federal funds rate were given. The FOMC statement repeated language included in previous statements indicating that committee members anticipate that economic events could further postpone increases in the federal funds rate. The FOMC statement asserted that committee members continue to monitor domestic and global financial and economic developments as part of the decision-making process for raising the target federal funds rate.

FOMC members agreed that policy accommodation may be required “for some time” after the committee’s dual mandate of maximum employment and 2.00 percent inflation have been achieved. This suggests that FOMC members are not in a hurry to boost rates when economic uncertainty remains.

In terms of housing markets, the Fed’s decision not to raise rates likely caused a sigh of relief as rate increase would have caused consumer interest rates including mortgage rates to rise.

Assessing Your ‘Debt-to-Income Ratio’ and Why This Number Matters When Getting a Mortgage

Assessing Your Debt-to-Income Ratio and Why This Number Matters When Getting a MortgageIf you are looking to buy a home, you may want to consider shopping for a loan first. Having your financing squared away ahead of time can make it easier to be taken seriously by buyers and help move along the closing process. For those who are looking to get a mortgage soon, keep in mind that the Debt-to-Income ratio of the borrower plays a huge role in the approval of your mortgage application.

What is a Debt-to-Income Ratio?

A debt-to-income ratio is the percentage of monthly debt payments compared to the amount of gross income that a person earns each month. Your gross monthly income is typically the amount of money you earn before taxes and other deductions are taken out. If a person’s monthly gross income is $2,000 a month and they have a monthly debt payments of $1000 each month, that person would have a DTI of 50 percent. The lower the DTI the better. 43 percent is in most cases the highest DTI that potential borrowers can have and still get approved for a mortgage.

What Debt Do Lenders Look At?

The good news for borrowers is that lenders will disregard some debt when calculating a borrower’s DTI. For example, utilities, cable, phone and health insurance premium would not be considered as part of your DTI. What lenders will look at are any installment loan obligations such as auto loans or student loans as well as any revolving debt payments such as credit cards or a home equity line of credit. In some cases, a lender will disregard an installment loan debt if the loan is projected to be paid off in the next 10-12 months.

What Is Considered Income?

Almost any source of income that can be verified will be counted as income on a mortgage application. Wage income is considered as part of a borrower’s monthly qualifying income. Self-employed individuals can use their net profit as income when applying for a mortgage, however, many lenders will average income in the current year with income from previous years. In addition, those who receive alimony, investment income or money from a pension or social security should make sure and include those figures in their monthly income as well when applying for a loan.

How Much Debt Is Too Much Debt?

Many lenders prefer to only offer loans to those who have a debt-to-income ratio of 43 percent or lower. Talking to a lender prior to starting the mortgage application process may help a borrower determine if his or her chosen lender offers such leeway.

A borrower’s DTI ratio can be the biggest factor when a lender decides whether to approve a mortgage application. Those who wish to increase their odds of loan approval may decide to lower their DTI by either increasing their income or lowering their debt. This may make it easier for the lender and the underwriter to justify making a loan to the borrower.

Last-minute Home Showing? Here’s How to Stage Your Home in Just a Few Minutes

Last-minute Home Showing? Here's How to Stage Your Home in Just a Few Minutes In an ideal situation, a seller will have ample time to prepare a home to list for sale. This may include time to make necessary repairs, to thoroughly clean the home from top to bottom and to properly stage it. However, in those cases when time is not available to complete all of these steps, there are a few necessary steps that should be followed to get the home in show-ready condition in a very short period of time.

De-Clutter As Much As Possible

De-cluttering the home is an important step in staging, and this is because it can make the home look cleaner and can show off the square footage in the home. When time for staging is limited, it may be necessary to simply hide items away in closets, cabinets and drawers. Ideally, however, these items will be boxed up, and this is because some home buyers will open closet doors and cabinets to view these areas, and it is not ideal to have them appear to be cluttered and chaotic.

Remove All Personal Effects From The Property

A key step in staging a home relates to removing all of the family’s personal items and making the home seem neutral, and the purpose for this is so that a buyer can see himself or herself living in the home. Ideally, all personal effects, including your family pictures, will be removed from the property.   When it is not possible to remove everything from the property, these personal items should be boxed up at the minimum or stored in an out-of-sight location in the home.

Focus On The Kitchen And Bathrooms

When time is truly limited, it may not be possible to thoroughly clean the home as well as de-clutter and de-personalize the home. Therefore, in a crunch, it is best to focus on cleaning the kitchen and bathrooms thoroughly and giving the other areas of the home a once-over cleaning. If more time is available, focusing on cleaning baseboards, ceiling fans and other features that may not be cleaned on a regular basis but that are visible to buyers can be helpful.

Many sellers will have several weeks to stage a home before listing it, but this is not always the case. In a situation with limited time to stage the home, the seller often must make critical decisions about what absolutely must be done and what is less important, and this can vary from homeowner to homeowner. Those who have questions about staging their home can reach out to their trusted real estate professional for assistance.

What’s Ahead For Mortgage Rates This Week – July 27, 2015

Whats Ahead For Mortgage Rates This Week July 27 2015Last week’s scheduled economic news releases were limited as no news was released on Monday or Tuesday, but good news did arrive in the form of a dip in mortgage rates for fixed rate loans. The National Association of Realtors® reported higher sales of pre-owned homes and FHFA reported that home price growth associated with mortgages held or backed by Fannie Mae and Freddie Mac held steady in May.

Sales of Pre-Owned Homes and FHFA House Prices Rise

According to the National Association of Realtors®, June sales of existing homes reached their highest level since February 2007. Sales of used homes reached a seasonally-adjusted annual rate of 5.47 million previously owned homes sold against expectations of 5.42 million homes and May’s reading of 5.32 million pre-owned homes sold. By comparison, sales of existing homes remain about 24 percent below a pre-recession peak. Lawrence Yun, chief economist for the National Association of Realtors® cited improving labor markets and home buyer concerns over rising mortgage rates as factors contributing to May’s reading for existing home sales.

FHFA, the federal agency that oversees Fannie Mae and Freddie Mac, reported that home prices associated with sales of homes financed with loans owned or backed by Fannie and Freddie rose by 0.40 percent month-over-month in May and held steady with April’s revised reading of 0.40 percent. FHFA home prices rose by 5.70 percent year-over-year in May.

Mortgage Rates Mixed

Freddie Mac reported that average rates for 30 and 15-year mortgages fell while the average rate for a 5/1 adjustable rate mortgage ticked upward by one basis point. The average rate for a 30-year fixed rate mortgage fell by five basis points to 4.04 percent; the average rate for a 15-year fixed rate mortgage fell by four basis points to 3.21 percent. The rate for a 5/1 adjustable rate rose by one basis point to 2.97 percent. Average discount points were unchanged at 0.60 percent, 0.60 percent and 0.50 percent respectively.

Expected reports on weekly jobless claims and new home sales were not released last week.

What’s Ahead

Scheduled economic reports for this week include the usual weekly reports on jobless claims and mortgage rates along with the Case-Shiller Home Price Index reports for May and the Commerce Department’s report on pending home sales. The Federal Open Market Committee of the Federal Reserve has scheduled an announcement on Wednesday, and reports on consumer confidence and consumer sentiment will also be released next week.

Tiny, but Cozy: 3 Ways to Furnish Small Spaces to Make Them Feel Much Larger

Tiny, but Cozy: 3 Ways to Furnish Small Spaces to Make Them Feel Much LargerWhen decorating a small space, there is a general desire to make the space look and feel larger than it is while also meeting basic functional needs in the room. For example, there may be a need to accommodate seating for a group of people in a living room, but there also may be a desire to provide ample space for foot traffic so the area does not feel cramped. By following a few important tips, it is possible to furnish smaller spaces so that they are functional and do not feel cramped.

Think About Decorative Storage Solutions

One of the most common factors that will make a small space seem cramped and uncomfortable relates to clutter, and because of this, focusing on storage solutions can go a long way toward making the space feel larger than it is. Storage solutions can be decorative, and they can be a true benefit to the décor in the room. Think about functional storage features like an ottoman with hidden storage features, an entertainment center with cabinets and shelves or a tall bookshelf that can hold many of the items that are needed in the room.

Decorate The Space Vertically

For most people, there is a general inclination to decorate a room horizontally and to fill the floor space with furnishings, but this can be detrimental when decorating a smaller room. In a smaller space, decorating the space vertically by using bookshelves, storage cabinets and other features that rise above the ground rather than that sprawl across the ground can be beneficial. The goal should be to decorate the room fully while leaving ample space for foot traffic to maneuver through the room comfortably.

Use Lighter Colors

Darker colors used in a smaller room can make the space feel closed off and cramped. Using lighter colors can brighten the space and make it seem more airy. While using shades of white and beige throughout a space may not be ideal in all rooms, these can be incorporated into various aspects of the décor to improve the spacious feel of the room.

Smaller spaces can be challenging to decorate, but there are different tips and tricks that can be used to make the space look and feel larger than it is. Some tips help improve the functional use of the space, while others simply play tricks and create the illusion of space. All can be used together to create the feeling of a larger, more inviting room.

Good News! Existing Home Sales, FHFA Home Prices Increase

Good News Existing Home Sales FHFA Home Prices IncreaseHousing markets show continued signs of strengthening according to reports released on Wednesday. The National Association of Realtors® reported that sales of pre-owned homes rose to 5.49 million in June as compared to May’s revised reading of 5.32 million pre-owned homes sold and expected sales estimated at 5.42 million sales. Expectations were based on May’s original reading of 5.35 million sales. June’s reading was the highest since February of 2007. Readings for existing home sales are calculated on a seasonally adjusted annual basis.

Buyers Gain Confidence in Labor Markets, Rush to Beat Rate Hikes

Lawrence Yun, chief economist for the National Association of Realtors® said that buyers may be influenced by rising mortgage rates and encouraged by improving job markets. Analysts expect the Federal Reserve to raise its target federal funds rate this fall, which means that mortgage rates along with consumer lending rates will rise.

The national median home price rose by 6.50 percent annually to $236,400, also a record reading.

While this news paints a rosy picture for housing markets, challenges remain. Strict mortgage standards are an obstacle for first time and moderate income buyers as well as for buyers with less than stellar credit scores. While construction of new homes is increasing, the majority of projects are apartment complexes. 41 percent of housing starts in June were multi-family projects with five or more units. This data falls in line with stricter mortgage standards and a trend for millennials, an expected group of first-time homebuyers, preferring to rent in large cities rather than moving to suburban areas.

FHFA House Prices Rise in May

The Federal Housing Finance Agency (FHFA) reported that home prices associated with mortgage loans owned or backed by Fannie Mae and Freddie Mac was unchanged from April’s revised reading of 0.40 percent month-to-month home price growth. April’s month-to-month reading was originally reported at 0.30 percent. FHFA home prices were up 5.70 percent year-over-year in May.

FHFA reported that year-over-year home price growth was positive in all nine census divisions, with the lowest growth rate of 0.90 percent in the Mid Atlantic division and the highest growth rate of 8.40 percent in the Pacific division.

3 Reasons Why Your Closing Costs Will Vary Depending on the Type of Home You Buy

3 Reasons Why Your Closing Costs Will Vary Depending on the Type of Home You BuySavvy home buyers who are preparing to make a real estate purchase should do their research and understand that they need to save money for not only the down payment, but the closing costs as well. The closing costs can account for as much as three to five percent of the sales price in some cases, so this can be a rather sizable amount of money. Some home buyers however, may not realize that the amount of closing costs can vary considerably based on the home that is purchased. With a closer look at why this is, home buyers can make a more educated decision when selecting a home to purchase.

Prepaid Taxes And Insurance

One of the most significant closing costs relates to prepaid taxes and insurance, and both of these expenses are directly tied to the location and value of the property. Consider that the property tax rate can vary based on the city, county, and state. Real estate insurance can also vary based on the type of construction of the home, if the home is located in a flood plain, and other factors. These are only a few examples of how the location and property type can impact these fees, and home buyers should consider the costs assoicated with the tax rates and insurance when selecting a property to purchase.

Third Party Reports

There are several third party reports that are commonly paid for at closing, and these include an appraisal, a survey, a pest inspection and a property inspection. The third party reports may vary in cost based on the size of the home, the amount of land that is being purchased, and even the condition of the property. Those who want to keep their closing costs lower may consider learning more about how these fees are calculated up-front before finalizing their plans to buy a specific home.

Title Insurance Fees

Title insurance fees are another typically sizable expense for home buyers, and this insurance offers protection to the lender if the title is not clean. Title insurance can increase based on the size of the property as well as different factors that are revealed with a title search. This information can be difficult to learn with an initial home search, but home buyers should be aware that title defects can increase closing costs.

The location, size, age and construction of a property all impact the closing costs. Those who are shopping for real estate may be inclined to make a decision that keeps closing costs down, and they can reach out to their knowledgeable real estate professional for more assistance with their particular situation.

3 Trends That Will Help Shape Your Local Real Estate Market in 2015

3 Trends That Will Help Shape Your Local Real Estate Market in 2015Each real estate market is unique in various ways, and your local real estate agent can help you to become more familiar with the trends in your community. For example, in some areas, it may be common for a seller to pay for at least a portion of the buyer’s closing costs, but this may not be common practice in other areas. While each market may be unique, there are some common trends that you can expect to be rather widespread across many communities throughout the rest of the year.

Buyers Acting Quickly To Make An Offer

In recent years, it was rather common for buyers to take their time researching the market and comparing various listings. There was a feeling that financing would continue to be affordable and that home prices would remain relatively low in many markets due to economic conditions. However, the economy has generally rebounded and market conditions in many areas have improved. There is an increasing feel of urgency in buyers to make a purchase sooner rather than later in order to lock in a great deal.

Younger Buyers Making a First-Time Home Purchase

Many younger adults have notably been sitting on the sidelines and have not been buying real estate at the same level that previous generations did in their 20s and younger 30s. However, as overall real estate market conditions have improved as well as other economic factors like the employment rate, consumer confidence and more, younger buyers are increasingly finding the confidence to move forward with their first home purchase.

More Realistic List Prices

In recent years, it was common for some sellers to list their home for sale based on the amount they owed on their mortgage or their general belief in property value without giving much consideration for market conditions. This may have been out of financial need, a general belief that their property value did not decline significantly even when markets plummeted and more. However, because market conditions have dramatically improved, you will find that the list prices on many properties are much more realistic.

Real estate agents keep a pulse on the trends in your local market, and their insight and guidance can be invaluable to you as you search for a property, structure an offer and walk through the rest of the home buying process. If you are preparing to purchase a home in the coming year, you can begin looking for a friendly and helpful real estate agent to assist you.

What’s Ahead For Mortgage Rates This Week – July 20, 2015

Whats Ahead For Mortgage Rates This Week July 13 2015Last week’s economic news included an encouraging report from the National Association of Home Builders, whose housing market index held steady with a reading of 60 in July. This was the 13th consecutive month for readings over 50, which indicate that more builders are confident about housing markets than those who are not. July’s reading was noteworthy as it was the highest since November 2005 prior to the recession.

Housing Starts, Building Permits Increase

The Commerce Department provided further evidence of stronger housing markets with reports on housing starts and building permits issued in June. Housing starts rose from May’s reading of 1.07 million to 1.17 million, which surpassed the expected reading of 1.11 million housing starts.

May’s reading for housing starts was revised from 1.04 million to 1.07 million an annual basis.

Construction of apartments and other multifamily housing complexes attained their highest level since 1987, which supports reported trends that millennials who prefer to live in larger cities are renting rather than buying homes. Housing starts gained nearly 10 percent between May and June. Would-be home buyers are also renting due to tighter mortgage approval standards; others may be “sitting on the fence” as they wait for further indications of stronger labor markets and improvements in overall economic conditions.

Building permits issued in June supported trends in housing starts, with permits for multi-family housing units higher by 16. 10 percent and was the highest reading for multi-family building permits since 1990. Analysts said that the increase in multifamily building permits was in caused by the pending expiration of a tax credit for builders in New York State that was set to expire June 30.

Permits for single family homes rose only 0.90 percent in June, to an annual pace of 689,000 but this was still the highest reading for single family housing permits since 2008.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported that average mortgage rates rose last week. The rate for a 30-year fixed rate mortgage averaged 4.09 percent and was higher by five basis points. The average rate for a 15-year mortgage was also five basis points higher at 3.25 percent. The average rate for a 5/1 adjustable rate mortgage was up by three basis points to 2.96 percent. Discount points were 0.60 percent for 15 and 30 year mortgages and 0.50 percent for 6/1 adjustable rate mortgages.

New jobless claims fell to 281,000 last week against the prior week’s reading of 296,000 new claims and an expected reading of 285,000 new jobless claims. Analysts said that the current reading indicates that last week’s spike in new unemployment claims was a false alarm. Seasonal anomalies and re-tooling at some auto plants were cited as causes for the prior week’s high reading. New jobless claims have remained under the benchmark reading of 300,000 since February for the longest consecutive period in 15 years.

Last week’s reports ended with the University of Michigan’s Consumer Sentiment Index, which fell from June’s reading of 96.1 to 93.3; analysts expected a reading of 95.0.

What’s Ahead

Scheduled economic reports for next week include new and existing home sales, and FHFA home prices along with weekly reports on mortgage rates and new jobless claims.