You’ve found your dream home and now it’s time to cross all your T’s and dot all your I’s before it’s all your own. And one of the first items on your closing checklist the home appraisal. So, what exactly is that?
The home appraisal is essentially a value assessment of the home and property. It is conducted by a certified third party and is used to determine whether the home is priced appropriately.
During a home appraisal, the appraiser conducts a complete visual inspection of the interior and exterior of the home. He or she factors in a variety of things, including the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. An upward adjustment is generally made if the home has a deck, a view, or a large yard. The appraiser will also compare the home to several similar homes that were sold within the last six months in the area.
The final report must include a street map showing the property and the ones’ compared, photographs of the interior and exterior, an explanation on how the square footage was calculated, market sales data, public land records, and more.
After it is complete, the lender uses the information found to ensure that the property is worth the amount they are investing. This is a safe-guard for the lender as the home acts as collateral for the mortgage. If the buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed.
“Risk Rating 2.0” now goes into effect Oct. 1, 2021. Rather than rely heavily on flood zones to determine policy premiums, Risk Rating 2.0 will consider more variables and charge premiums that vary by home.
WASHINGTON – The Federal Emergency Management Agency (FEMA) has postponed the roll-out date of Risk Rating 2.0 – its plan to update and extend the National Flood Insurance Program (NFIP). The original effective date of Oct. 1, 2020, has been moved back one year to Oct. 1, 2021.
This federal program, which is crucial to the Florida real estate industry, helps keep insurance affordable. Take a look at why the NFIP is so important.LEARN MORE ►
“Some additional time is required to conduct a comprehensive analysis of the proposed rating structure, so as to protect policyholders and minimize any unintentional negative effects of the transition,” FEMA said in a prepared statement. The extension will also allow “all National Flood Insurance Program (NFIP) policies – including, single-family homes, multi-unit and commercial properties – to change over to the new rating system at one time instead of a phased approach.”
Although the Risk Rating 2.0 program is still being developed, it’s expected to change the way NFIP calculates flood-insurance rates. As a result, it could save some homeowners money and raise the coverage cost for others.
Rather than levy premiums based on the dollar amount of insurance a homeowner wants, NFIP could operate more like traditional property insurance by weighing a roster of risk variables. Currently, rates are generally based on the amount of coverage a homeowner wants and the risk of flood their home faces – largely whether the home is inside or outside a FEMA-designated flood zone.
FEMA originally said the plan would consider multiple variables, such as the potential for hurricanes, a home’s distance from a body of water and its risk from coastal surges. It would also consider using new “loss-estimation technology” that predicts a home’s risk from climate change. It could also offer replacement cost coverage.
Florida – home to about 35 percent of all NFIP policies – could be impacted, though it’s not yet clear how a specific homeowner might be affected. However, it’s likely that some homeowners in FEMA flood zones would see flood insurance costs increase, and that potential for higher costs led some lawmakers to push for a Risk Rating 2.0 delay.
“We’re encouraged that FEMA is listening to Congress’s concerns about the impacts of Risk Rating 2.0. FEMA’s promise to protect policyholders and minimize any unintentional negative effects in the transition is vital to ensuring the NFIP remains successful,” according to a joint news release issued by six lawmakers, including three from Florida: Reps. Charlie Crist, Debbie Mucarsel-Powell and Francis Rooney.
NFIP currently expires on Nov. 21, 2019, and Congress is working on a solution to extend it for at least a few years. Should lawmakers reach agreement, it’s unclear how a legislative fix might impact FEMA’s Risk Rating 2.0 regulatory fix.
Under U.S. law, FEMA is limited in its ability to raise rates. It’s also unclear how those limitations might impact increases under NFIP’s new risk model.
An evacuation plan is a necessity for every home, especially if you live in an area where fires, earthquakes, hurricanes, flooding, and other disasters are a possibility. Many homeowners create evacuation plans for their homes and practice them with their kids, but far fewer have considered one for their pets. Take these steps to add your pets to your evacuation plan.
Assign pet evacuation to an adult. Everyone should know how to act during an evacuation, and that includes assigning one parent or adult to the pets. This allows the other parent and the children to focus on their part of the evacuation plan, so there’s no confusion during a high-stress moment when time is of the essence.
Keep evacuation maps and pet carriers readily accessible. If you need to evacuate, you should know exactly where every important item is. If you pets require carriers, keep them in a place that you can access easily.
Practice your plan. Include your pets in your home evacuation drills. It’ll help you see how they will respond and make changes to your plan if necessary. Getting your dog out of a window may not be as simple as you think!
Be prepared in case you get separated from your pets. No matter how much you drill your evacuation plan, it’s possible that a dog or cat will run off while you’re focusing on keeping your family safe. A microchip or a GPS-compatible tag can help you find your pets once it’s safe to return to the area.
BOSTON – April 8, 2019 – Here’s some good news for anyone whose credit scores aren’t quite as high as they’d like them to be: Three new financial tools have come to market – or soon will be available – that could give your scores a shot of adrenaline when you need it most.
All three tools come from well-established players: FICO, developer of the ubiquitous FICO score; Experian, one of the national credit bureaus; and CreditXpert, a financial technology company whose products are used extensively in the mortgage arena.
FICO’s Ultra score is expected to be widely available from lenders this summer. It raises scores by importing data from your checking, banking, savings and money-market accounts into your credit report when calculating your score. If you have some savings, maintain your bank accounts over time and avoid negative balances, you’ll likely get a higher score.
Seven out of 10 consumers who exhibit good banking and savings behavior should see increased scores using Ultra, according to FICO.
Experian’s new Boost option, introduced in March and now becoming available nationwide, offers another score-enhancement approach. It imports your on-time utilities and telecom payments and includes positive data into your score calculations, raising scores in the majority of cases.
According to Experian, three-quarters of consumers with scores below 680 saw an increase in their scores from Boost.
The new Wayfinder, from CreditXpert, is different. Working with their loan officer, borrowers select a target credit score they’d like to achieve to qualify for a loan or get the best interest rate and terms possible. The Wayfinder software then runs dozens of scenarios to get the borrower that score within a designated time period by taking steps to modify accounts in their credit reports.
Say you have a 640 score but need at least a 680 to get a lower interest rate. Your loan officer plugs your 680 target into the software, and the program delivers specific steps you can take to achieve that score within days or weeks. Plans might call for a partial paydown of one or more accounts that are needlessly depressing your current score.
But since you may not want to spend the money, Wayfinder offers alternatives that won’t cost as much but might take a month or more to complete. Score improvements average around 27 to 30 points but have ranged as high as 179 points, according to CreditXpert.
All three of these tools could be practical if you find yourself in a score pinch. You simply need to ask your loan officer about them.
But Fico’s Ultra and Experian’s Boost come with a crucial handicap for anyone seeking a home mortgage: Under current regulatory restrictions, the two biggest sources of mortgage money cannot accept the FICO scores they produce.
Fannie Mae and Freddie Mac both confirmed to me that at least for the time being, their underwriting systems don’t permit either UltraFICO or Boost. Both can be used for most other credit purposes using Experian credit reports, such as applying for credit cards or auto loans – but not for mortgages destined for purchase by Fannie or Freddie.
Wayfinder, by contrast, is designed for the mortgage market. The higher scores it leads to are acceptable because they reflect credit report changes that can be incorporated into scoring models that Fannie and Freddie have used for years. So if you’re seeking a mortgage and need a higher score, Wayfinder is worth mentioning to your loan officer.
Another key fact you should know about Wayfinder: It’s not free. It costs about $15 to $18 if you want to run it on your files at each of the big three credit bureaus. Plus, it typically involves “rapid rescoring” of your credit reports by a vendor working with your loan officer, and that can cost an additional $75 to $150.
But if the process lands you a loan that costs thousands less over the years, the small upfront expense should be worth it.
If you are looking to buy or sell your home Jennifer is just a phone call away. Call today to get started. Jennifer Bailey, REALTOR®, e-PRO® Dale Sorensen Real Estate Locally known….Globally Connected…
NEW YORK – Jan. 4, 2018 – Forget fevered bidding wars and snap home-buying decisions. Slower and steadier will characterize next year’s housing market.
That follows a 2018 that started off hot but softened into the fall as buyers – put off by high prices and few choices – sat out rather than paid up.
Affordability issues will remain a top concern going into 2019, exacerbated by rising mortgage rates. But some of 2018’s more intractable issues will begin to loosen up. The volume of for-sale homes is expected to rise and diversify, while the number of buyers is forecast to shrink.
“For home sellers, they need to recognize those days of frenzied market are over. They must price competitively to sell their home,” said Lawrence Yun, the chief economist at the National Association of Realtors. “For buyers, there will be challenges when it comes to rising interest rates, but they don’t have to make hurried decisions anymore.”
Still, some cash-strapped first-time buyers will simply be priced out, while a cohort of potential move-up buyers will decide to stay in their existing home, make renovations and enjoy their current low mortgage rate. Price increases will moderate, and everyone in the market will need to adjust.
Finally, more homes to choose from
One of the biggest complaints among buyers in the last several years is that there weren’t enough homes for sale. In fact, the supply of houses hit historic lows in the winter of 2017 and has yet to rebound substantially. That fueled bidding wars, price increases and frustration.
The supply crunch is expected to ease some in 2019 with inventory rising 10 percent to 15 percent, according to Yun.
But the increase will be skewed toward the mid-to-high end of the market – houses priced $250,000 and higher – especially when it comes to newly built houses, said Danielle Hale, chief economist of realtor.com. That’s good news for move-up buyers, but not so much for the first-time millennial buyer. “There’s still a mismatch on the entry-level side,” she said.
Houses in all shapes and sizes
If you’re a first-time buyer, you won’t be completely out of luck if you stay open-minded. If a single-family home is out of the question, consider a mobile home or townhouse as a starter home, both of which are on the rise.
The volume of shipments for manufactured houses – also known as mobile homes – is expected to finish above 100,000 this year, up from 93,000 in 2017, according to Robert Dietz, chief economist of the National Association of Home Builders. The trend is expected to continue next year.
These homes are also significantly cheaper than other home types. Not including land costs, the cost to buy a mobile home averages $70,600, compared with $257,900 for an existing single-family home and $309,700 for a new home.
You may also consider a townhouse, an attached single-family home located in a community of homes. Construction of townhomes also is experiencing year-over-year growth and is outpacing the single-family detached home market, Dietz said.
“The market is being supported by millennials moving from renting to their first-home purchase,” he said. “If you’re in a high-cost area with wage and job growth, townhouses are appropriate for entry-level. And they still get that suburban feel with their own front door.”
Affording a home remains hard
Housing values are still expected to increase next year, but not at the gang-buster pace seen in recent years. NAR’s Yun forecasts modest price growth between 2 percent and 3 percent, down from close to 5 percent this year and over 5 percent in 2017.
At the same time, mortgage rates are expected to hit 5.5percent by the end of 2019. Both factors make it more expensive for buyers to purchase a home. Hale estimates that the expected increase in prices and interest rates translates to an 8percent rise in the average monthly mortgage payment.
Interest rate trap
Shrinking affordability will convince some buyers – especially first-timers – to sit out the market altogether next year because they can’t make the numbers work. Homeowners considering selling their home may also stay put because of rising mortgage rates – a so-called interest rate trap. Most outstanding mortgages have an interest rate of 4.5 percent or less, according to a report this year from Black Knight, a data analytics firm.
“They have a nice low mortgage rate, lower than the current rate, so there’s no reason to move,” said Mark Fleming, chief economist of First American Financial Corp.
Tax worries linger
The first few months of 2019 will reveal how the new tax changes affect homeowners. One key rule is the new cap on the mortgage interest deduction.
Before, homeowners could deduct interest they paid on up to $1 million in mortgage debt – including interest on home equity loans and lines of credit – reducing their taxable income.
Now, you can only deduct interest on up to $750,000 in mortgage debt. Interest paid on home equity loans and lines of credit is deductible only if the funds were used to pay for home improvements or renovations.
The only taxpayers who will exceed those limits are high-end homeowners and buyers and those with multiple homes with mortgages.
The bigger question mark is if and how the $10,000 limit on state and local taxes deduction – known as SALT – will affect housing markets in high-tax states such as New Jersey, New York, Connecticut and California.
Buyers may be reluctant to purchase homes in those states – or choose a smaller house – if they calculate they will pay too much in non-deductible taxes. “These states may see softer housing markets compared to the rest of the country,” said Yun, if the SALT cap hurts enough homeowners.
The bottom line
If you’re a seller: Price realistically and be ready to cut the listing price or offer other incentives to get a deal done. “It’s still a seller’s market, but not like it was,” Hale said. “Sellers need to be mindful of competition, especially for more expensive properties.”
If you’re a buyer: Don’t worry about going slow when making decisions. “There is less buyer competition and more inventory,” Yun said. “Buyers can take time to find the home that fits into their budget.”
Copyright 2019, USATODAY.com, USA TODAY, Janna Herron
Television channels like HGTV and DIY have truly changed residential real estate for the better. Thanks to these channels, buyers and sellers today are more educated about their homes’ structures, décor, and remodeling costs. Everybody’s expectations are higher and most buyers and sellers’ creativity is too. Have you wondered about how these shows are made? What is real and what is not? Here are some fun facts.
First, for the remodeling or fix and flip shows, the remodeling budget is truly the homeowners’ remodeling budget. If the homeowners have wanted more than their budget will allow, the producers usually bring the buyers back to reality long before the remodel is started. If there is some unforeseen cost, other changes are omitted or downscaled.
The inspections are real inspections, too. When you see a show host presiding over a sewer inspection (yuk!), they are really checking it out.
The programs need true action in addition to just on-camera interviews. (Ever notice how each of these shows has at least one homeowner hitting a wall with a sledge hammer?) When you see a show host or a new owner actually doing work, they are not faking it – they are really doing the work that you are seeing. Those are real nails in those nail guns. All of the show hosts and all of the buyers get involved in at least some portion of the decorating or remodel.
Now for the dirty little secrets. Here is the big one for the house hunter shows. Although it is really fun to try and guess which house a buyer will pick, these programs are shot in reverse. That means the show is filmed after the buyers buy – and close on – their home. The other homes are “decoys” that are filmed after the transaction concludes and were never seen by the buyers during the actual search.
Ever notice how much the buyer or house remodeler couples argue and disagree? A lot of the drama on the shows is fake. Conflict, like action, makes a more interesting television show. The producers will encourage the magnification of buyers’ and sellers’ fears and dilemmas because it is believed – correctly or incorrectly – that it makes for better ratings.
And even though the host and home owners get involved in some of the work, most of the work is done off-camera by professional contractors and (sometimes) large crews. The projects can take much longer than they usually would as well; the contractor’s schedules and stages have to work with the production crew’s schedules and availability.
Nevertheless, these shows are really fun to watch, and offer lots of general education about homes and house hunting.
You’ve got more options than ever when mattress shopping these days with no shortage of brick-and-mortar and online-only retailers to choose from. Here are the factors you should consider when you’re shopping for a perfect night’s sleep.
1. Mattress construction: The most popular mattress types are inner spring mattresses, memory foam mattresses, and adjustable air mattresses. Each has pros and cons when it comes to durability and comfort customization.
2. Firmness: Mattress firmness plays a huge role in the quality of your sleep. Mattresses that are too firm or too soft can cause aches and pains, so it‘s recommended that you test a mattress for 10- to 15 minutes in store before making a purchase.
3. Sleeping position: Your mattress should match your sleeping style (side, back, face-down, etc.). You want a mattress that keeps your spine in proper alignment. For example, some mattresses are better for side sleepers, while others are better for back sleepers.
4. Size: It’s not quite as simple as choosing between a king and a queen mattress. You should also consider your height, as some mattresses are a better fit for shorter people while tall people will want a longer mattress so their limbs aren’t hanging over the edge of the bed.
5. Stability: For couples, you should consider how the mattress reacts when one person moves, so the other person’s sleep isn’t disturbed in the middle of the night.
Deciding to buy a home can be a stressful and often scary decision to make. How much is it going to cost? Is my credit good enough? Where do you start?
Well good news! I’m here to help.
First, if you are buying a home – did you know that it doesn’t cost you anything to use a REALTOR®? Most of the time our real estate commissions are paid by the seller so it’s always a good idea to find an experienced real estate specialist to help you along. A REALTOR® can offer a variety of tools and resources to make the home buying process smooth and easy for you.
Here’s some quick facts:
You don’t HAVE to have 20% down to purchase a home
You don’t HAVE to have “perfect” credit to purchase a home
Getting a mortgage is now so much easier than it has been in a long time. We have some great local lenders in Indian River County that will work hard to get you financed
It is NOT cheaper to rent. Rental rates have skyrocketed lately. Buy something now, save money and invest that savings for yourself and your family
If you’d like to just call a lender and see if it’s possible here’s a list of a few of our local lenders that you can call. Click Here to See Lender List
Rates are still GREAT and the time is right to buy now!
Also, did you know that “First-Time Home Buyer” doesn’t necessarily mean that you have never ever purchased a home before.
According to HUD a first-time home buyer is an individual who meets any of the following criteria:
An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers).
A single parent who has only owned with a former spouse while married.
An individual who is a displaced homemaker and has only owned with a spouse.
An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.
An individual who has only owned a property that was not in compliance with state, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure.
Did you say yes to any of the above questions? Then you are a “First Time Home Buyer”.
Oh, and did you know working with a REALTOR® is FREE to buyers? Our commissions are typically paid by the seller. So take advantage of our expertise, don’t go it alone.
REALTORS® also take an oath to uphold the strict REALTORS® Code of Ethics. What does this mean to you? It means that any REALTOR® with whom you work has voluntarily agreed to abide by a Code of Ethics, based on professionalism and protection of the public. The Code is your assurance of dealing with a professional who has your best interests in mind.
I would be delighted to be your REALTOR® and help you and your family with the purchase of your new home. I have a ton of great resources to share with you many of which you can find on my website to help you get started. You can visit veroluxuryhomes.com for more information or to begin your home search. Want something more mobile? Go to searchinvero.com to download my mobile app to get listings via GPS, works great on iOS and Android phones and tablets.
Just starting to think about it? Have some more questions? Ready to get it started? Or just need some help? Give me a call today, I’ll be standing by 772-559-5524