Myths About Buying A Vacation Home

Myths About Buying A Vacation HomeAre you thinking about buying a vacation home? Maybe owning two homes is part of your retirement dream. Maybe you’d like to have a second home in your favorite holiday locale.

If you are thinking about taking this step, you might have talked to family and friends about it. Unfortunately, many people give well-intentioned, yet poor advice when it comes to buying a vacation home. Here are some myths — and the truth — about buying a second home straight from leading real estate experts.

You Can Buy A Vacation Home With No Money Down

You have probably seen advertisements about buying a vacation home with no money down. However, this is simply not the case and those advertisements are misleading. Unlike buying a first home, you will need a sizable down payment to purchase a second home.

The minimum amount down that you will need to buy a second home is 10 percent. In order to qualify for the lowest down payment, it would also have to be a single family residence and not an investment property.

So, if you plan to use it as a vacation rental, then you will need more money down – usually at least 20 percent due to the property being considered an investment property.

Renting Out Your Vacation Home Is Easy

Sites like VBRO, HomeAway and Airbnb have made renting out vacation rentals much easier. However, renting out a vacation or second home is not as simple as it seems. While renting out your vacation home is a great opportunity, you must run it like a business.

And remember, there are more expenses than just the mortgage payment and possibly HOA dues. Utility payments and amenities like internet and television services add to the monthly expenses and are desirable features to prospective renters.

Take some time with your trusted real estate professional and pencil out the total costs of maintenance. Then you will have a great idea of what it will take in rent to cover the costs.

You Don’t Have To Worry About Your Vacation Home When You Are Not There

Many people think that they can buy a vacation home and then forget about it when they are not using it. This is simply not the case. Vacation homes are often targets for thieves, so you’ll have to plan for a way to protect your home when you are not there.

Fortunately, the newer smart alarm systems make it easy to monitor a property from anywhere. Many smart home systems also include flood detection monitors so that you can be immediately notified if you have a water leak.

Owning a vacation home can be a very rewarding investment and a great addition to your long term financial plan. Once again, take your time and get your trusted real estate and mortgage financing professional involved to help you make the best decision possible.

 

What’s Ahead For Mortgage Rates This Week – August 13th, 2018

What’s Ahead For Mortgage Rates This Week – August 13th, 2018

Last week’s economic reports included readings on job openings and inflation along with weekly readings on mortgage rates and new jobless claims.

Job Openings Hit Third Highest Reading on Record

Job openings held steady at 6.70 million in June, which was the third highest reading since reporting started in 2000.

Analysts said that the high number of job openings combined with low unemployment rates indicates healthy labor markets. Fewer jobs were available in transportation, utilities and warehousing, but jobs in education increased.

Job quits remained at 2.20 percent for the fourth consecutive month. Quits are considered an indicator of worker confidence in job markets.

Inflation Inches Up

Inflation rose by 0.20 percent in July according to the Consumer Price Index. While analyst expectations were met, rising housing costs offset a decline in energy prices. Core inflation, which excludes volatile food and energy readings, held steady at 0.20 percent as compared to the same reading for analyst expectations and for June.

The Consumer Price Index rose 2.90 percent year-over-year, which matched June’s reading. The less volatile Core CPI, which excludes inflation readings for food and energy, rose by 2.40 percent year-over-year and was the highest   reading for core inflation since 2008.

Mortgage Rates, New Jobless Claims Lower

Freddie Mac reported lower average mortgage rates last week. The rate for a 30-year fixed rate mortgage was one basis point lower at 4.59 percent; the average rate for a 15-year fixed rate mortgage was three basis points lower at 4.05 percent. Rates for a 5/1 adjustable rate mortgage averaged 3.80 percent, which was three basis points lower than for the previous week.

First-time jobless claims fell to 213,000 new claims filed and were lower than the expected reading of 217,000 new claims and the prior week’s reading of 219,000 new claims filed. The less volatile monthly reading fell by 500 new claims to 214,250 first-time jobless claims.

Whats Ahead

This week’s economic readings include reports from the National Association of Homebuilders, Commerce Department readings on housing starts and building permits issued. Weekly readings on mortgage rates and new jobless claims.

Big Second Quarter GDP Numbers Impact Housing Market

Big Second Quarter GDP Numbers Impact Housing MarketPositive economic growth numbers are always cause for celebration and the second quarter GDP just went vertical. After nearly four years of sub-par growth, the real GDP hit 4.1 percent in the second quarter.

While that economic news has everyday Americans excited that we may be entering a new age of prosperity, drawing a concrete link to the real estate market may be difficult. But by looking long and hard at this uptick and its potential impact on housing, you may get a better idea about buying, selling or standing pat on residential and commercial property.

GDP Report Points To Demand

Among the positive measures from the recent economic report, consumption enjoyed a positive increase. The first quarter numbers were disappointingly sluggish in this area at a modest 0.5 percent. The second quarter took off like a rocket, by comparison, at 2.25 percent.  

Although that figure shows an upwardly mobile economy, some experts are calling it discouraging given the extraordinary consumer confidence that has risen to record highs of more than 101.0 since November 2017. This opinion begs the question: why are economy gurus disappointed?

The first part of that answer has to do with the implementation of the Tax Cuts and Jobs Act that is putting more money in American paychecks and rolled back income tax liability. Many economists forecast that this personal wealth growth would turn into solid consumption. While working families have enjoyed a breather in terms of scratching from paycheck to paycheck, home purchases have not gone through the roof.

Home availability remains relatively low. With Millennials scooping up many of the starter-home listings and Baby Boomers downsizing, a significant housing shortfall exists. If you have ever heard the term “seller’s market,” this is it.

Inventory Shortage Means Buy Quickly

There are always naysayers that point to lower than expected consumption and claim the economy is weak. The facts in the GDP report clearly dispute any such ideas.

Business investment spiked to a powerful 11.5 percent and then 7.3 percent in the first two quarters. Fixed business investment is on fire based on deregulation, soaring profits and confidence.

That’s why real estate resources are saying that the only thing holding the market back is inventory. Home sale data is not keeping pace with other sectors of the economy because there simply is not enough inventory to keep up with demand. For first-time buyers, this means get prequalified and act swiftly if you find a dream home. It won’t stay on the market long.

Prospective homebuyers may be relieved to know that positive construction indicators are trending. New homes are expected to improve the inventory shortage heading into 2019. Still, demand is likely to stay ahead of inventory.

Be sure to contact your trusted mortgage professional to help you get your financing pre-approved so that you are ready to make an offer quickly.

4 Top Sustainable Home Trends

4 Top Sustainable Home TrendsThe emergence of sustainable energy and products have solidified the go-green movement. Solar energy and electric cars are just the tip of the iceberg.

The impact of products on the environment has become a significant measure about their value. Those same principles are also being applied to homes. Smart homes and energy efficiency have a direct correlation to home values and listing prices. That’s why homeowners and home builders alike have an eye toward sustainable trends. These are some of the top-ranked home trends.

1: Durability Matters

After the catastrophic weather that damaged and destroyed homes in Florida and the Gulf states, “resiliency” has emerged as a key sustainability term. Contractors and home designers are including materials that stand up to extreme weather. These materials also consider toxicity levels, with the most non-toxic being among the more favorable. The storms will come, but how properties resist them and impact the environment afterwards are important sustainability trends.

2: Natural Light Keeps Trending

The use of sustainable solar energy has prompted many to go directly to the source. Large skylights and windows allow natural light to warm homes and reduce the need for electric lighting. Natural light also helps stave off Seasonal Affective Disorder during shorter winter days. Simply put, incorporating natural light resources is a trend that builds off of solar energy thinking.

3: Water Filtration Systems

It’s no secret that municipal water supplies have been compromised on occasion. This trend that started ramping up in 2017 continues to have legs as homeowners are securing water purity. In terms of sustainability, homeowners with water filtration systems have been utilizing them as a method to reduce the amount of bottled waters they purchase. Above and beyond the cost-saving benefits, the reduction in unsustainable plastics is helping to protect the environment.

4: Electric-Only Homes

The high carbon emissions from fossil fuels has motivated environmentally conscious Americans to turn to wind and solar. These days, improved energy storage from high-capacity lithium batteries has opened the door for homes to go all-electric. This appears to be an emerging trend that could pick up additional steam as energy storage technology moves forward. Electric-only homes could be a major step in allowing average homeowners to get off the grid. This trend is not only sustainable for the environment, it lessens the monthly impact on wallets.

Living in the technology era means that change can occur rapidly, and green-friendly homeowners may want to stay up to date on the latest sustainable home trends. They could improve home values going forward.

Whether you are in the market for an eco-friendly home or want to make improvements to your existing home, contact your trusted mortgage professional to explore all of your financing options.

Home Trends Includes Natural Mindfulness Designs

Home Trends Includes Natural Mindfulness DesignsUrban and suburban life offers wonderful conveniences and cultural benefits. But a downside that many families are experiencing is the pervasive use of electronics and disconnectedness from nature.

These lifestyle deficiencies have increased the popularity of yoga and meditation and the practice of mindfulness is topping the covers of national magazines. Everyday mothers and fathers are also working hard to engage their children in outdoor activities and nature. These things require an ongoing effort on top of already packed schedules. That’s why mindful home designs that bring nature into your living space have been trending.

Origins Of Mindful Home Design

There are plenty of home fads that come and go. Some may remember the intense oranges of the 1970s or tiles that covered over lush hardwood floors. Yikes.

One of the founders of the nature-infused home movement was America’s beloved architect Frank Lloyd Wright. His acclaimed Fallingwater marvel was built in 1935 directly on top of a waterfall. The design incorporated natural stone and timber in a way that brought the outdoors living experience into the home. The southwest Pennsylvania wonder forms the basis for the recent trend to incorporate natural elements into living spaces.

The idea that connectedness to nature improves mindfulness has been supported by a wealth of research. The Japanese use “forest bathing” as a way to feed the mind and spirit. The basic idea goes hand in hand with Wright’s architectural thinking that human senses benefit from a direct and discernable connection to nature.

Studies have shown that patients recovering from illness or surgery demonstrate marked health improvement through natural immersion. But the practical question is: how does this trend benefit everyday homeowners?

Natural Homes Improve Mindfulness

It’s not practical to bring an entire forest into your home. But creating semi open-air spaces go a long way to enhancing an outdoor feeling.

Many homes are including semi-enclosed spaces constructed from natural timbers, stone flooring and rich plant life that emulate the positive effects nature has on the human psyche. Although subtle, they help reduce the nature deficiency experienced by many tech-oriented adults and children.  

By working with materials that further the experiences of nature’s sights, sounds, touches, smells and even tastes in some cases, living environments are bringing a touch of the natural world home.

When considering a remodeling project or new construction, consider looking at the ideas of Frank Lloyd Wright’s Fallingwater project and contemporary home designers about infusing nature into your everyday life.

When you have decided what you want, the next step is to secure your financing. Contact your trusted mortgage professional to help you find the best options for you.