Unmatched competition, sky-high housing prices and a seemingly endless surge in demand — the symptoms of the current market seem eerily familiar to some real estate experts.
Murmurs of a housing bubble have been heard throughout the country, from the intense market in Seattle to the building empire in Florida.
It’s a term that causes everyone to halt in their footsteps, as they are wary of repeating the same mistakes of the past. When the housing bubble that formed from 2000 to 2006 burst, it kicked off the economic downturn that is now referred to as the Great Recession.
So, given the nature of the current market, it begs to ask the question: Is this another U.S. housing bubble?
First, let’s remember what exactly this phenomenon is:
A housing bubble is a typical economic occurrence that happens from time to time when there is increased excitement and exuberance in the real estate market. Bubbles can form in local markets as well as regional and national markets, and often happen when there’s a rise in demand for housing while there’s also the expectation of continued growth.
A market is categorized as a bubble when the following conditions occur:
The real estate market across the country is showing the following signs:
The short answer is no, this is not a housing bubble.
While it’s natural to feel uneasy about the striking similarities, there are a few distinct differences that separate this market from the market 15 years ago. Credit is still tough to come by, inventory levels are low, and the demand is being driven by economic growth and increased job opportunities.
The current national real estate market is in the process of slowing down, according to the National Association of Realtors.
Monthly sales, as well as pending sales, are on the decline, and many experts feel that 2017 will not live up to the expectations that real estate agents and investors had for it at the beginning of the year.
However, the supposed downturn is not a bubble that is bursting…
Rather, it’s a sign that the market is going to balance itself out, as tends to happen in normal economic cycles.
Housing Market Report: How Falling Mortgage Rates Will Affect the 2019 U.S. Housing Market
Mortgage rates have been going through a steady decline, with home buyers getting more and more opportunities at locking excellent rates. Homeowners are looking at opportunities for refinancing their mortgages – making it more affordable for their budget in the long run.
So, how does this affect the overall housing market? Will things be looking up, or is an inevitable downturn destined for our future? With the last recession behind us for several years now, it is understandable why some people are beginning to feel uneasy – but in reality, things may not be as bleak as they seem. Let’s take a look…
This recent dip in mortgage rates is a result of the general downward trend that started late in 2018 – or at least that is what Freddie Mac brokers claim. (The agencies that buy and pool housing mortgages, which they later sell as a mortgage-backed security to any interested investor of the open market.)
Freddie Mac has a positive outlook on the current situation:
“WAGES ARE GROWING ON PAR WITH HOME PRICES FOR THE FIRST TIME IN YEARS, AND WITH MORE INVENTORY AVAILABLE, SPRING HOME SALES SHOULD HELP THE MARKET TO RECOVER FROM THE MALAISE OF THE LAST FEW MONTHS.”
FreddieMac.com, April 2019
[For some market observers, this view of the U.S. housing market is optimistic.]
Given the tepid housing demand of the past, higher interest rates and great demand on the market, this positive outlook is much like a breath of air. With a reduced need for traditional home loans, lenders have begun steering more and more towards “unconventional mortgages.” These mortgages may not require proof of income and might be offered to buyers despite their bad credit.
These types of high-interest mortgages have proven to be the cause of the financial housing crisis of 2007 – but in today’s market, they no longer seem to be such a threat. However, the dip in mortgage rate raises uncertainty among certain types of buyers.
Before mortgage rates dipped down, they increased almost by 5% in the second half of 2018. However, now that borrowing rates seem to be falling – and will likely stay this way for a while – there is new hope when it comes to the future of the housing market. Benjamin Keys, a Wharton real estate professor, sees it as a positive thing as the borrower demand will go up.
Things are still relatively uncertain – with brokers attempting to temper their cheer. House demand looks good, but at the same time, they might be brought down by the “shallow unemployment rate and the booming labor market,” as Keys says. Additionally, the positive signal of a lower mortgage finance rate has yet to show up in the latest buying trends.
Real estate economists are not yet sure which direction the U.S. housing market will take – for some, observing the ups and downs alone will provide insight. So far, this U.S. economic expansion seems rather promising for the housing market.
Navigating the home mortgage maze can be challenging, particularly for first-time home buyers. Adding to the confusion is the fact that several types of mortgage loans can fit into multiple categories used to define home finance.
To sort through the types of home mortgages available to you and ensure you understand the terminology, here is a quick primer on types of home mortgage loans:
Every mortgage can be defined by the type of interest rate it involves, whether fixed, adjustable or a combination. Choosing whether to pursue a fixed rate or an adjustable-rate loan will be one of the first decisions you will likely encounter as you apply for financing.
Many borrowers prefer a fixed-rate mortgage because they wish to avoid any surprises.
Even with long-term loans of 30 years, the monthly home payment remains the same, year after year, unless you decide to refinance your loan for a more favorable rate down the road.
By contrast, the interest rate for an adjustable-rate mortgage, or ARM, will change every year. In many cases, loans will have a limit as to how much it can adjust up or down over the lifetime of the loan.
Often, a loan’s interest rate will not change until after a period of time has passed following the loan’s initial rate. For this reason, such ARMs are often referred to as a hybrid product.
FOR EXAMPLE, A MORTGAGE MAY CARRY THE SAME INTEREST RATE FOR THE FIRST FIVE YEARS OF THE LOAN, THEN ADJUST ON AN ANNUAL BASIS.
The main advantage of a fixed-rate mortgage is the consistency of payments. However, your interest rate will be higher than the initial interest rate of an adjustable-rate mortgage.
On the other hand, the interest rate of your ARM could later move upward to a point higher than the rate of a fixed-rate mortgage.
You’ll also have to decide whether you want to use a government-insured home loan or a conventional type of loan.
By contrast, the three types of government-backed mortgages are insured by a federal government agency. While it may be easier to qualify for a government-backed loan, there may be greater insurance cost added to your monthly payment.
Government-insured loans include:
One additional set of terms you are likely to hear in conjunction with home financing is conforming versus non-conforming loans. This differentiation simply refers to whether a loan meets underwriting guidelines of Fannie Mae or Freddie Mac, the government-controlled corporations that purchase and sell mortgage-backed securities.
If a loan is non-conforming due to size, it is known as a jumbo loan. Because these loans represent a greater risk to lenders, they typically have higher interest rates and require greater down payments and higher credit scores.
Understanding these different categories of home mortgages can help you understand your available home loan options. Keeping in mind the combinations of mortgage types, such as fixed-rate FHA loan or an adjustable-rate conventional mortgage, will help you to better analyze your options when financing your next home.
Unless you have been living in a cave all year, you know that the Federal Reserve is about to raise interest rates, which might affect your pocketbook as you prepare to apply for a mortgage loan or a refinance.
However, the way it has played out isn’t quite what experts predicted. Here are three things you need to know about the current state of mortgage interest rates:
Despite predictions since the last quarter of 2014 that interest rates are going to rise at any time, interest rates have stayed about the same for the past several months.
At present, Bankrate notes that the current interest rate for a 30-year fixed mortgage is 3.84 percent. That is almost exactly where it was six months ago.
Although there was a minor fluctuation in July, with average interest rates expanding to about 4.2 percent, August and some low sales reports from the National Association of Realtors brought numbers back down.
Last year, experts predicted a rise in interest rates this past spring, as a means to curb inflation. By the time spring came around, experts predicted again that rates would go up in June. When June came and went, folks at Fannie Mae and Freddie Mac changed their minds to September.
Now, people just aren’t sure when rates will go up. The Fed will only raise interest rates if it seems that housing prices are spiraling out of control, and if applications for loans will not entirely plummet as a result.
You know it’s going to happen, you just don’t know when.
Of course, every time there’s a rate hike, people sometimes panic. They choose not to apply for a mortgage refinance because they don’t want to pay a tenth of a percentage point more, or they decide that they have to apply right away because they think they will lose the opportunity otherwise.
The truth is that rates usually don’t rise or drop precipitously. So even if you miss out on getting a rate under 4 percent, you probably won’t be paying 6 percent at the beginning of next year. This means that you can and should take the time to research and apply for the best mortgage with the right lender for you. You’ll save a lot of hassle in the long run.
When mortgage interest rates rise, buyers pay more for their mortgage payments.
However, despite expert predictions that rates would already have risen significantly, they remain low. Although it is likely that rates will eventually increase from these near-historic lows, it does not mean you have to make a hasty decision about your mortgage needs.
If you are preparing to buy a home or refinance your mortgage sometime in the next year, you will still have time to do so.
New closing forms are designed to make home buying less confusing and better protect home buyers. Here’s what you need to know as a prospective home owner from the new “Know Before You Owe” rule going into effect October 3, 2015.
According to the Consumer Financial Protection Bureau, the U.S. government’s agency responsible for consumer protection related to the financial sector:
The most important component of the new rule is an easier-to-understand closing document, known simply as the Closing Disclosure.
Under the new rule, home buyers will be given three business days prior to closing for review of this important document. This added time is to provide you with additional time to get all questions answered, and gain a more thorough understanding of the mortgage terms and the costs involved.
The new rule is designed to address a number of problems consumers have identified as hindering the closing process:
Inadequate document review time. Gone will be the days when consumers first saw closing documents at the closing table, and were then expected to rush through the paperwork and sign without always understanding what they were signing.
Mistakes in closing documents. In the past, errors found in documents at the closing table, even simple misspellings of names or forgetting to add spouses, have caused closing delays while the entire package was redone. Under the new rule, these mistakes can be caught days before the closing date.
Too much paperwork all at once. A popular consumer complaint is that being bombarded by too much paperwork at the closing table leaves them feeling as though they could have overlooked something important in the rush to sign.
Difficult to understand. The new rule will allow consumers time to consult with experts for clarification of terms to ensure a thorough understanding prior to the closing date. New documents will also be more straightforward.
Naturally, anything that provides additional time for review or revision raises the question of whether the home buying process will cause a closing date to be put off. In most cases, you won’t need to worry about delays.
The new rule, while it does offer additional protection, will only impact your closing date if there is a change to any one of three very specific items related to your closing disclosure. In those cases, your lender must allow you to take an additional three business days to review an updated version of the disclosure documents. Depending on how early you receive your disclosure documents and whether you take your full three days each time, this could impact your closing date.
Those three changes that will allow an additional review period include:
Other changes in your disclosure documents, such as typos or minor wording errors, issues discovered during a final walk-through or even changes in payments unrelated to the above scenarios will not affect your initial three-day review or delay your closing. This includes changes resulting in additional seller credits.
That’s not to say, of course, that one or both parties might not agree to delay a closing for other reasons unrelated to changes in your disclosure documents.
As the housing market headlines of the last few years read, some home buyers forgot about the great financial responsibility of purchasing a home to their own demise.
If you have been contemplating buying a home with financing, here are a few tips for dealing with borrowed dollars that will help you take down that “for sale” sign with confidence:
We all know the feeling of wanting to buy something out of our price range. That being said, you’ll likely want to look at or be shown homes you can’t actually afford. Try to resist this temptation as this is where the mortgage stress starts.
To avoid heartache and hassle get pre-approved for a home loan before you buy.
As a pre-approved home buyer, you can save yourself the agony of dreaming about houses you can’t comfortably afford. Better to put yourself in a strong negotiating position and make the right offer with zeal when you find the right priced house.
Unlike a quick pre-qualification, which is based on an online application and light review of your finances, a home financing pre-approval is based on your actual income, debt and recent credit history as reviewed by a reputable lender.
By doing a full underwriting analysis of your current spending power, you’ll be less likely to get in over your head with monthly payments, and more likely to enjoy a stress free purchase process.
A 15-year mortgage typically offers a lower interest rate, but because the term is half as long as a 30 year mortgage, the monthly payments can be significantly higher.
Not that long ago, paying off a mortgage as fast as possible was popular.
These days however, the average debt a person will accumulate due to student loans, car notes, credit cards etc. means it may make more sense to opt for a 30-year mortgage. In this regard, you will have a lower fixed monthly house payment, but have the option of paying additional principal when your finances are more abundant.
Traditionally, when picking a mortgage, a home buyer would have the option of buying “additional points” which is basically a portion of the interest that you pay at closing in exchange for a lower interest rate.
Recently, with mortgage financing rates being so low, many banks rarely offer mortgagors the option to pay points up front.
That being said, if your home lender makes the option available to you, and you plan to stay in the house for a long time – paying the points now will save you a considerable amount of interest over the life of the loan.
Not all mortgage lenders are created equal. It is strongly recommended to do a little bit of comparative shopping for your home loan with a few different mortgage banks.
Some lenders will take advantage of your excitement to purchase a home and fail to properly explain all the loan terms to you in a way that you truly understand.
READ EVERYTHING BEFORE YOU SIGN.
Before you make that offer on a home, do research on all of the lender’s requirements and be sure that you can follow through. If you are utilizing the services of a licensed real estate professional to help you buy your property, this is where they can earn their keep.
Mortgage related financing stress is common when buying a home, just remember that YOU are in control of the purchase process and following these quick tips may help you enjoy the mortgage experience just enough to help someone else when it is there time to buy.
Bad credit can trigger all sorts of financial stress and issues, especially having trouble buying a home and getting a mortgage.
If your credit is shaky, the safest and best route to purchasing a property is to save money and wait for your finances to improve. While that is not always feasible, there are a few options to consider when it comes to paying for a home with a loan.
Here are four ways a home buyer can possibly obtain a mortgage to buy a home:
If you are lucky enough to have a good friend or better yet a close relative with great credit and extra cash, you can apply for a co-signer home loan.
With this type of mortgage arrangement, the home buyer’s interest rate and loan approval are basically determined by the credit score of the co-signer, which means you will likely get loan terms that you otherwise wouldn’t be able to.
Even though a bankruptcy has negative associations attached to it, it usually signals the possibility of a new start with your credit profile.
A few years after you file for bankruptcy, mortgage lenders will likely focus less on your credit history and more on the rest of your financial portfolio such as: your annual income, your recent ability to pay reoccurring bills on time, and the ability to make a sizable down payment.
Save as much money as you can, pay your bills timely and consistently, always keep a steady job, and bad credit or not, you’ll likely qualify for a traditional loan after a few years.
Interest-only home loans allow home buyers to pay only the interest on the loan for a specified length of time (usually 1-5 years.) This is a great borrowing option if you expect to earn have a substantial increase in income or, or if a large portion of your annual income in the form of commissions or bonuses. Either way, plan to refinance or pay off the balance of the mortgage at the end of the agreed upon loan term.
The Federal Housing Administration (aka FHA) sponsors home loan programs that offer mortgage loans to home buyers with low market based interest rates. Take for example the FHA’s 203(b) program for first-time home buyers, which allows a down payment as low as 3.5% of the purchase price.
In may instances, some or most of your closing costs and processing fees can be included in the final loan amount.
FHA loans usually look less at specific credit ratings as long as the borrower can demonstrate a regular income that ensures consistent monthly payments.
It is wise to remember that regardless of your credit history, buying a home with a mortgage comes with the commitment to pay it back. Even if you have had credit troubles in the past, it is still possible to find a lender who will work with you to realize your dream of home ownership.
Now that you have decided to buy your dream home, it’s time to consider how you will pay for it. You could always just write a check for the total purchase price and be done with it…
While paying cash may be a possibility for some, the reality for most is that buying a home will require a home loan or mortgage.
Before we begin, it is important to note that mortgages can be extremely complicated, and selecting the wrong loan type could seriously jeopardize your home and financial future.
Without further delay here are a few plays to help you choose the right mortgage like a pro:
Find a good friend or close relative who may have recently gotten a home loan if they would recommend their mortgage lender – and how there experience went.
Do you know a realtor or someone else who deals with mortgage lenders regularly (a financial adviser, attorney, etc.) who could help you create a list of local lenders?
It almost goes without saying that even with a recommendation, you should search online and research the mortgage lenders extensively. But be sure to push past the fancy advertising campaigns and always investigate the fine print, loan fees, lock-in periods, and every mortgage qualification requirement.
The age old adage used to place an emphasis on paying a mortgage as soon as financially possible. These days however, the average debt that a home buyer accumulates due to credit cards, school loans, etc. means it might be better to opt for a 30-year mortgage instead of the traditional 15-year. In this regard, you will have a lower overall monthly mortgage payment, and still have the option of paying additional towards the loan principal when finances are good.
When selecting the right mortgage type for your family, you may find that you have the option of paying additional points at closing in exchange for a lower interest rate.
Do it. If you plan to stay in the home for a considerable amount of time (7 years or more) and given the current real estate market, you should seriously consider buying down your interest rate. Paying a little extra in closing costs now will save you a lot of interest payments down the road.
For example: a one percent interest rate reduction may cost you up to $5,000 today, but save you $35,000 over the life of the mortgage loan. Essentially, that equates to hard earned money in your pocket to save for early retirement or even invest elsewhere.
If researching and interviewing mortgage lenders sounds a bit overwhelming to you, consider hiring a mortgage loan broker to help you.
A mortgage broker is basically an independent contractor who pairs purchasers with a variety of different home lenders by scouring available loans and finding the one that best fits your financial needs.
As with a realtor, be sure to research your mortgage broker first, an ALWAYS get everything in writing. Do these things and you will feel like a pro when it comes time for you to choose the right mortgage loan for your home purchase.
Short-term rentals have become quite a common occurrence nowadays, particularly for people that no longer see the appeal of hotels and wish to obtain the privacy of their place.
Platforms such as Airbnb have become quite popular – and have grown quite a lot in the past few years. The application now offers more than 4.5 million listings all around the world – the places either being entire apartments or just one rented room at a self-established price.
Since Airbnb allows people to list their spare rooms (or apartments) to potential guests from all over the world, this type of business has become quite attractive as an alternative source of income. It also adds as an excellent opportunity for the visitors, since they can get more affordable prices for their stay.
The popularity of these platforms is bringing benefits in certain areas – and drawbacks in other. It led to strong oppositions, mainly because of decreasing affordability for housing, unfair competition, illegal utilization, as well as other building drawbacks.
Local governments around the world have a different response to the regulation of short-term rental platforms. Many cities did not regulate these platforms significantly, but they may be required to submit to specific restriction. For example, in Berlin, a host is required to occupy the house at least 50% of the year. San Francisco, on the other hand, allows only a maximum of 90 days of rental every year, along with a 14% hotel tax.
The effects of these regulations are relatively straightforward. From basic economic theory, we know that the lack of negative externalities (i.e., controls) leads to the reduction of house prices (rent included) as the most efficient housing use is restricted.
This reduction will be more pronounced in locations that are particularly appealing to tourists. However, due to these negative externalities, one more drawback may come forward: the increase in prices on the housing market. It may be surprising considering that, as Airbnb claims, “it brings more money into these cities – money that includes both rent and the money people spend during their stay.” Therefore, the money is going to the communities – improving the economy of a particular city or country.
Areas that are attractive to tourists and feature a fair number of Airbnb listings have a higher chance of experiencing a rise in house prices and rent. One example has been the city of Los Angeles, whose prices have increased by 10% due to the presence of short-term rental platforms. This phenomenon does not apply to areas with smaller tourist demands, which experienced relatively small effects.
To conclude, one cannot know for sure what the net effects of short-term rental platforms are on the long term. However, with the prices of general housing and rent continuously rising, it is expected that the real estate market might go through a substantial decline eventually. For now, investors may have to pay much more than they anticipated, considering local housing market prices.
There are many reasons why you may choose to rent instead of buy a home. YOLO!
Whether you are renting for a short term before you purchase a place of your own, or you have decided to make renting your long-term option, there is no reason why your rental house, condominium or apartment should not feel like home.
Here are five simple ways you can perk up any rental unit and give it that inviting, homey feel that everyone desires:
As you can see, just because you are renting does not mean that you are stuck with a boring place that doesn’t feel like it belongs to you.
Give one or more of these ideas a try and make that rental feel like it is all yours!
When people rent a home, they might expect that the homeowner’s insurance policy will cover them in the event of damage or disaster. How many of them have actually seen the policy to make sure?
These four reasons show that renter’s insurance is vital for a tenant’s health and sanity:
It is plain to anyone who has ever read a news article in the aftermath of a disaster that many people are unaware that their homeowners insurance had limits.
In fact, there are many types of coverage and causes of damage that the standard homeowners insurance does not cover. The biggest problem is that many homeowners are not aware of the stipulations made by their coverage.
For example, the Insurance Information Institute notes that most policies do not cover against flood damage.
Renters who rely on the homeowner to provide adequate coverage for:
may be left out in the cold.
Understanding what a landlord’s homeowners insurance covers is a matter of practicality, and one that many tenants overlook.
When a person decides to rent out a home, they will often keep up the insurance on the property and the structure itself.
However, they may also take down coverage inside the home to the bare minimum, expecting tenants to get their own insurance for possessions.
To avoid a nightmare of claims and mistaken expectations, renters should obtain insurance to cover their own possessions. This includes riders for any items of special value as well as possessions that are often taken outside of the home (e.g. laptops, cameras).
To establish how much the possessions are worth, renters have to evaluate what they have and what it may be worth.
The National Association of Insurance Commissioners highly recommends that tenants consider what they would rather receive in a claim: the replacement cost of the item or the actual cash value.
For items that maintain their value or even appreciate, actual cash value may be acceptable.
Most belongings depreciate, and may not be worth anything after several years.
When they get renter’s insurance, tenants should consider all their possessions for current value and make a list to give to the insurance agent.
This way, they have written evidence that they owned an expensive painting or diamond ring before it comes time to make a claim.
The world of insurance is based on estimates.
In that case, it is generally easier to plan to need more than to avoid getting enough. Disaster is never a good time to find out that the coverage was highly inadequate.
The best solution is to get recommendations from an insurance agent about the most common types of damage and disasters in the area, and make sure that coverage in those areas is comprehensive.
Living in a rented house or apartment can feel mundane and bland. Landlords typically don’t like renters to make alterations to the rental that are permanent or stylistic, since they need to keep the rental looking in a way that will appeal to nearly everyone.
Here are four ways to achieve a customized living environment in a rental without damaging the structure or losing your deposit:
The joys of using a luxury shower head versus a standard shower head are hard to dispute.
A shower head with all the bells and whistles can be purchased for less then $50, and you can take it with you when you leave your rental.
A shower head is one of the easiest things to replace in your rental. Just unscrew the old one, and screw in the better model that offers different flow settings. Store the old one under the bathroom sink so you can easily put it back into place when you leave.
You don’t have to be stuck with town drinking water. An under-the-sink reverse osmosis water filter will get rid of a whole batch of chemicals and water additives depending on how many stages you put the water through.
Buy a water filtration system online and follow the setup instructions.
The water will be dispensed through a mini faucet that you install in place of the hand soap dispenser. If you don’t have a soap dispenser, that’s okay.
That little round hole next to your main kitchen faucet is just a cover for the hole where your reverse osmosis water faucet will go.
When you leave, just put the cover back on, or re-install the soap dispenser.
Many rental units come with holes in the wall in the living room where the television is supposed to go. Often there is an ugly, long, putty-colored cable wire protruding from the hole, and you are meant to connect this to the back of your television set.
But why should you have to arrange your television set and furniture according to someone else’s ideas?
Get yourself a wireless router and modem from your cable company and have them send a technician to set it up for you. They’ll run their wires behind the walls and in the attic out to their own infrastructure on the roadway. Meanwhile, you’ll have TV and Internet wherever you want in your home, and your router and modem are yours to keep when you move.
Many rental homes are situated quite close to the next house, making privacy an issue. Instead of keeping the curtains shut all the time, you can increase your privacy and make a stylistic change to your rental.
Window cling film comes in a wide assortment of decorative designs. You can choose from abstract art that mimics stained glass, beautiful landscape motifs, or just plain shaded cling film. All of them offer enhanced privacy, and they don’t damage the window glass at all.
When you move out, just peel off the cling film and go.
All of these ideas will help you to put your personality stamp on your rental. The best part is, you can still return your rental to your landlord in the same condition as when you moved in.
of these ideas will help you to put your personality stamp on your rental. The best part is, you can still return your rental to your landlord in the same condition as when you moved in.
The American dream is to own a home, and it’s still a wise idea to do so – eventually. There are certain situations and times in life, however, when the best option is to keep renting.
Here are five smart reasons to keep renting:
Once you’ve got that diploma in your hand, you might be tempted to officially enter the world of adults by buying your first home.
Hold that thought.
As a new college grad, your skills and degree are highly marketable, and you’ll want to be able to take advantage of the most lucrative job offer that comes your way. Your dream job might be in a city – or even a country – far away from where you live now.
Make it easy on yourself to pack your bags and be on a flight to career heaven within days.
Once you’ve emerged from the joyous whirlwind of getting married, the next obvious step is to buy a house together, right? Wrong.
If you’re like most newlyweds, you’ve already got a ton of debt left over from college, grad school or even your extravagant wedding.
Hold off on signing for a mortgage loan until you’ve got a good grasp of your budget and how long it might take to pay off what you already owe. When you do buy a house, you’ll feel better knowing you don’t have old debt weighing you down.
The freedom of being able to put your things into storage to go and travel the world can’t be overstated. As long as you have wanderlust, you’ll never feel settled being pinned down to one location.
Take advantage of no mortgage payments to satisfy your inner adventurer.
There will be plenty of houses left on the market for you to choose from when you get back. We promise.
If your life is subject to change at any moment, this isn’t the time to go house shopping.
To reap the best value from your house, you’d want to be able to commit to living there for at least five years, but longer is preferable. Keep renting until you know where your life is headed.
Did your credit score take a beating while you were in between jobs last year?
If you don’t have a handle on your finances, you won’t be able to get a decent rate on your home mortgage. You’ll save thousands of dollars by waiting just a little bit longer to get your credit score into shape before applying for a mortgage.
When the optimum time comes for you to buy a home, you’ll be glad you waited.
Following these four confidence boosting tips will help first time renters feel in control when renting a home for the first time:
A good rental agent generally has your best interests at heart, but ultimately real estate professionals and property landlords want the same thing: to get their property rented.
You, on the other hand as a first time renter are looking for a fair deal on a quality home to lease. As such, you’ll need to be your own advocate and watch your back.
Here are 4 ideas to help you keep focused and on track:
Show them you’re someone to be taken seriously and chances are they will.
Depending on your desired location, the rental market can be pretty hectic. Some properties move quickly, and others take longer to lease. Knowing which describes rent homes in your area can help you determine on how fast to move through the process and can help you time your move appropriately.
Be sure you gather all the necessary documents that you’ll need to finalize a rental before you actually go to view it. This will show the property manager that you are serious.
The items often needed to secure a rent home include:
Be confident and ready to answer questions about your recent pay and credit history, especially if it isn’t perfect.
Unfortunately, these days there are plenty of rental scam artists who target unknowing renters, particularly renters searching online.
Take care when looking for a rent home on sites like Craigslist and the local classifieds. Remember, don’t hand over any personal or financial information before you meet with a qualified landlord or licensed rental agent in person.
Home ownership is often touted as being smarter (or cheaper) than renting.
While it does have its advantages such as stability, freedom, etc. buying a home isn’t always the best option for everyone at all times.
Here are five good reasons to remain renting instead of buying:
Unlike home ownership, when you rent a home your landlord is mostly responsible for all of the property’s maintenance and potential repair costs. Depending on the particular age and condition of the property, along with any unforeseen disasters, these costs can add up to be quite significant.
One obvious benefit that home renters have over homeowners is that they usually don’t have to pay additional real estate taxes.
Depending on the state, county, and municipality you live in, these taxes can pose a significant burden on top of a mortgage payment and other costs.
Things can change, particularly when you’re a young professional…
If in six or eight months you’re offered a fantastic job opportunity on the other side of the country, you might not want to be “stuck” with a house and mortgage that you can’t easily get rid of.
Alternatively, if times get tough, renting also allows you to downsize more quickly.
A rental security deposit of one or two months’ rent can sound pretty steep, but it’s nothing in comparison to the potential down payment you’ll have to make when purchasing a home.
If you don’t currently have enough savings to make the monthly payment with enough left over for a few months’ additional mortgage payments, renting may be a better option.