Buying a Home, Summer 2015

Buying a Home Summer 2015 by Lori Koschnick

7 Mortgage Loans For Today’s Low- And No-Downpayment Buyers (Updated For 2015)

You Don't Need A 20% Down Payment

Housing is on the mend.

Since the start of 2012, home values are up nearly thirty percent nationwide. Unfortunately, rents are rising just as fast. In many U.S. markets, it's more economical to own a home today than to rent one, which is one of the reasons why first-time home buyers represent 30% of today's home purchases.
This is higher market share as compared to recent years; a figure buoyed by three key factors.
First, mortgage rates are ultra-low, which has boosted home affordability across the country. Rates continue to troll near 4 percent and remain firmly below last year's levels.

Second, according to mortgage-software provider Ellie Mae, U.S. lenders are approving more purchase loans than during any period this decade. A few years ago, banks barely approved even half of all purchase loans. Today, they're approving more than two-thirds.
That's a huge turnaround.

And, third, there are more low- and no-down payment mortgage programs available to today's home buyers than during any period in the last 10 years.
No matter how much or how little you want to "put down" on a home, there's a mortgage program which can help you. Rates are low and it's easier to get approved.

What follows is a preview of seven popular loans available to today's first-time and repeat home buyers. Each is commonly available with rates which can be previewed anytime online.
Click here to see today's rates.

2015's Low- And No-Down Payment Mortgage Loans

FHA Loan (3.5% Down Payment)

FHA loans allow for a 3.5 percent down payment. Insured by the Federal Housing Administration (FHA), these loans are among the flexible and forgiving for today's home buyers.

FHA loans are typically best-suited for low-down payment buyers with average or below-average credit scores; and buyers looking at multi-unit homes (e.g.; 2-unit homes, 3-unit homes, and 4-unit homes) as a primary residence.

FHA loans require mortgage insurance premiums (MIP) but, in January 2015, those FHA MIP costs were reduced to help keep FHA loans affordable for buyers using the program.

Noteworthy: FHA loans are assumable, which means that a future buyer of your home can purchase your home with its FHA loan -- and its mortgage rate! -- still attached. You can actually pass today's low rates on to tomorrow's buyer of your home.
Click to see today's rates.

Conventional 97 (3% Down Payment)

The Conventional 97 is a special program which was recently reinstated by the Federal Housing Finance Agency (FHFA), which is the parent of both Fannie Mae and Freddie Mac.
The Conventional 97 requires a down payment of just 3 percent and, among other benefits of the program, the Conventional 97 allows a buyer's down payment to be gifted by a third-party. The only requirement is that the gifter has a blood or marriage relation to the buyer of the home; or is a legal guardian, domestic partner, or finance/fiancee.

The Conventional 97 mortgage is limited to $417,000, regardless of your local mortgage loan limit; and multi-unit homes are not allowed. The program is also restricted to fixed-rate mortgages only.
Noteworthy: The Conventional 97 program is often more costly on a monthly-basis than a comparable FHA mortgage. However, because the program's mortgage insurance can cancel in as few as 12 months from the date of purchase, its long-term costs are often much less.

USDA Loan (No Down Payment Required)

The USDA loan is guaranteed by the U.S. Department of Agriculture and allows for 100% financing. Formally known as a "Section 502" loan, lenders sometimes call the USDA loan a "Rural Housing Loan", which is a bit of a misnomer.

USDA loans are available in non-rural areas as well, including within many U.S. suburbs.
The big draw of the USDA loan is that its mortgage rates are often the lowest of all the low- and no- down payment mortgage programs; and its mortgage insurance requirements are quite low, too.
As compared to FHA loans, for example, USDA mortgage insurance costs are half which is why many of today's buyers will opt for a USDA loan over an FHA one -- even if they plan to put 3.5% down. Simply, USDA loans are more economical.

In order to qualify for a USDA loan, the income of a home buyer's household may not exceed the local media by more than fifteen percent. However, large households are granted certain exclusionary rights.

You can look up this year's USDA income limits here.

Noteworthy: The USDA loan program is among the few low- and no-down payment mortgage programs which can be used to purchase manufactured homes and modular homes. 

VA Loan (No Down Payment Required)

VA loans are loans which are guaranteed by the Department of Veterans Affairs. Generally speaking, VA loans are available to active duty members of the U.S. military; honorably-discharged service members; and many surviving spouses.

Review the complete VA mortgage eligibility guide here.

VA loans are unique among low- and no-down payment mortgage programs because they require no downpayment whatsoever and never require the buyer to make a mortgage insurance payment.
VA loans can be used for homes of any type -- single-family, condo, multi-unit, and more -- and are assumable by future VA home buyers. Furthermore, the VA loan can be used to finance energy-efficiency improvements to a home.

Noteworthy: Interest rates for a VA loan are typically the lowest of the three "major" loan types -- VA, FHA, and conventional. According to Ellie Mae data, VA mortgage rates beat FHA rates by about one-eighth of a percentage point and can be as much as forty basis points (0.40%) lower than a comparable conventional loan.

Click to see today's rates.

"Special" Low-Down Payment Loans

Good Neighbor Next Door ($100 Down Payment)

The Good Neighbor Next Door (GNND) program is a special HUD mortgage program which allows home buyers to purchase homes with just $100 down. The program is available to members of law enforcement; firefighters or emergency medical technicians; and, teachers of pre-K through 12th grade.

Buyers in the program also receive a home purchase discount of 50% -- yes, 50 percent! -- in exchange for agreeing to make the home your sole residence for 36 months, at minimum. Via Good Neighbor Next Door, then, a $100,000 home can be bought for $50,000.

The Good Neighbor Next Door program allows buyers to use FHA, VA, or conventional mortgage financing which helps to ensure low interest rates.

Noteworthy:The Good Neighbor Next Door program allows you up to 180 days to move in to your new home so, if you plan to make repairs prior to Moving Day, there's no reason whatsoever to have the house work done hastily.   

Home Construction Loan (3.5% Down Payment)

Of all the low- and no-down payment mortgage programs available to today's home buyers, only one can be used for home construction -- the FHA 203k loan.

The 203k loan comes in two flavors. The first is the Streamlined 203k, which is used for less-extensive projects and which is limited to $35,000 in total repair costs.

The more common 203k loan is the "standard" 203k, which is used for projects which involve moving walls or replacing plumbing; or doing anything else which would prohibit you from living in the property while the work is being performed. The standard 203k can also be used for landscaping or converting a home with more than 4 units into a 4-unit, owner-occupied home.

Noteworthy: Because the 203k loan is backed by the FHA, home buyers using it remain eligible to use the FHA's popular refinance program -- the FHA Streamline Refinance. The FHA Streamline Refinance is widely-viewed as the simplest, fastest program for refinance an existing mortgage loan.

Piggy-Back Mortgage (10% Down Payment)

The "Piggy-Back" Mortgage is a not really a mortgage at all -- it's two mortgages, one mortgage "piggy-backed" on top of another in order to borrow 90% of a home's purchase price.

Sometimes called an "80/10/10", the Piggy-Back Mortgage has the buyer bring a 10% down payment to the closing table and, to avoid having to pay mortgage insurance, two mortgages are issued instead of one. The first mortgage is typically a conventional loan, issued for 80% of the home's purchase price.
The second mortgage is typically a home equity line of credit (HELOC), issued for 10%.
Piggy-Back Mortgages are often used by home buyers who plan to pay down or reduce the balance on their second mortgage within the first 24 months of homeownership.

Noteworthy: The second mortgage of a Piggy-Back Mortgage is often adjustable and tied to Prime Rate, which is tied to the Fed Funds Rate. When the economy is expanding, the Fed Funds Rate can jump unexpectedly, substantially raising your overall monthly housing payment. Be careful when selecting a mortgage linked to Prime Rate. 

Home Selling Process

Go Home . . . and Bring Home that Dog!

#HomeRocks.  Home Rocks with even more gusto when you adopt a pet and bring home a dog.  My dog is part of the family and my greatest fan -- his big face is in the window watching me pull away from the garage when I leave home and it's there again to cheer on my homecoming at the end of the day.

"Belly-Boy" (short for Bellamie, which I'm told is French for "beautiful friend") is my buddy, gives great hugs, and is the cover-dog for this video pictured above .  The breed comes from the Pyrenees Mountain range along the border of France and Spain. Belly-Boy pops up again at the tail end of the 30 second video with my son.  The photos were taken just moments after we adopted this Great Pyrenees puppy. 

You'll see our first Great Pyrenees love, "Champ" (short for "Sir Woolly Britches" -- my husband refused to call out "Sir Woolly Britches!" in public) at the end too.  He keeps watch over the new pup with his boy, "Luke."

Finding and procuring a home of your own, just like finding the perfect pet, is a process that requires a bit of waiting.  Often it involves plans to fulfill dreams of bringing home a 4-legged furry pet.  When you find a house that's "home" for you and you get the keys in your hand . . . finally, you can bring home the dog or cat you've always wanted.  They're waiting to go home too! 

Aa a friend of Adopt-a-Pet and home buyers, I'd like to help you find a home to call your own and a forever home for a dog or cat waiting to be adopted.  Coldwell Banker Real Estate is on a mission to help find forever homes for 20,000 dogs! 

Direct questions to Realtor, Lori Koschnick, independent agent for Coldwell Banker The Real Estate Group Inc.  Coldwell Banker offices are independently owned and operated.

Infor@LoriKoschnick.REALTOR  or  Lori@HomewardBoundPro

Where are Mortgage Interest Rates Heading?

Where are interest rates heading?

    http://goo.gl/zVmMTP

When do most homes come on the market?

When do most homes come on the market?  WHY is knowing when most come on the market for sale important for Buyers and Sellers? MORE homes is great news for home buyers.  MORE homes is bad news for home sellers. Discover when home inventory is highest here and plan accordingly.

Zero Net Energy Real Estate

Zero Net Energy: Homes consuming only as much energy as they produce by renewable means.

A Hardworking-House Term to Know

Zero Net Energy is a goal for builders; learn what ZNE means for you.

If you have not yet heard the term “zero net energy,” or ZNE, you will soon be hearing it everywhere. Most simply it means that a building consumes only as much energy as it can produce by renewable methods. Since buildings consume about 25 percent of our nation’s energy, the savings and implications of ZNE are enormous. For several years the U.S. Department of Energy has supported innovation in this area by sponsoring the Solar Decathlon. The biannual competition invites contestants to design and build a house that runs primarily on solar power and produces as much electricity as it consumes.

California building codes have already mandated implementation of ZNE by phasing in complete compliance by 2020 for all new homes, and remodels and additions that significantly upgrade a house, constructed in the state. Since California has at least 10 percent of the nation’s population and the ninth largest economy on the planet, its influence in this area is quickly scaling and spreading across North America. However, California codes prioritize renewable energy production last on the list of requirements that can assist with a home’s compliance. Energy consumption reductions and improved building design performance standards and technology are being phased in first.
 
Here are a few things that can be and already are being addressed by innovation to achieve this goal.

Caddis Architecture

Financing the investments. When ZNE applications show a return on investment in a relatively short amount of time, financial entities are keenly interested in supporting them. California has built incentives into its programs to promote them. Yet the savings on energy consumption alone has propelled lending institutions to support them, as they clearly see the payoff. The trend is spreading. The Colorado residence seen here, by Caddis Architecture, was designed to be ZNE. While its progressive and innovative design embraces a contemporary aesthetic in conjunction with achieving ZNE, vernacular home design, as illustrated in the Florida home below, can be adapted to meet this goal just as easily.

Energy Smart Home Plans

Crisp Architects

Reducing consumption. Probably the most obvious energy-saving consideration is doors and windows. In the past the glass-enclosed sunroom seen here, by Crisp Architects, would have been impractical during New York’s winter months. Dual- and triple-paned glass, along with other techniques and advances in window design, allows configurations to reduce energy use. In the Seattle house below, awnings with automated systems that sense rain and shading requirements provide a more passive solution to energy consumption at doors and windows.

Mohler + Ghillino Architects

Divine Design+Build

Regulating consumption. The incandescent bulb is gradually being phased out. First, compact fluorescent lamps took their place, which cut energy usage significantly. Lately, LEDs, or light-emitting diodes, have been cutting energy consumption even more. These compact and long-lasting fixtures not only greatly save energy, but they also allow innovative and dramatic lighting effects to be achieved.

The flush and elegant undercabinet fixtures seen here have been mounted snugly, keeping the crisp, clean lines in this modern kitchen. Dramatic lighting effects define the contemporary bath design below. In addition, LEDs can be designed to change color, adding another dimension.

Brilliant SA

Paragon Kitchens

Managing consumption. If you think all of your home electronics and mobile devices that need electricity are contributing to a larger electric bill, you are correct. Utility companies estimate that about one-third of an average home’s juice is consumed by such equipment.

Most appliances and electronics with power cords plugged in draw some electricity even when their power button is off. One of California’s goals is to require switches on all electrical outlets so that electronics that normally stay plugged in can more easily and conveniently be switched off.

Even if you just can’t live without the soft yellow glow of the incandescent bulb in your favorite lamp, you can save energy by installing a dimmer switch on that light fixture or on a hardwired light switch that controls it. Dimmers can save half or more of the energy of a bulb’s full capacity.

Legrand, North America

Another California requirement is that lights in certain rooms, such as baths and garages, be connected to motion sensors. This helps, for example, to keep the kids in check when they go around the house turning on the light in each room they enter without turning if off when they leave. In addition, depending on the type of room, incandescent fixtures are not allowed to be installed. The state requires that any hardwired fixture be “high efficacy.” This can be types with compact fluorescent bulbs or LEDs.

Greenstar Technologies

Usually on the higher end, there are systems with control panels, like this one, or ones that can be coordinated with a smartphone application. The ability to manage systems throughout the home will allow consumers not only to monitor their own habits, but to coordinate with peak energy demands in their regions. Utility suppliers place a premium on consumption during the hottest days of the year, for example, when demand surges. Being able to use less air conditioning on those days and planning to spend time out of the house can be a strategic method to lower your bills and help the system meet demand where it is needed most.

Norocom Smart Home

In addition, lighting that can respond to daylight, building designs that allow in sufficient daylight to minimize or eliminate the need for artificial lighting, and windows and ventilation that can be automated to respond to desired interior conditions are other features that can help to reduce and manage energy consumption.

Nest

Employing technology. A good example of such technologies is the Nest thermostat, which works with smartphones to assist in the management of a home’s climate. A good example of how Nest can save you energy is to consider a time when you are out of town for business. Let’s say you are in Los Angeles for three days, and a heat wave has enveloped Dallas, where you live. You set the temperature in your house to 82 degrees Fahrenheit while you are away, which keeps your electricity consumption down. When you board the plane in L.A. to return to Dallas, you open the app and set the temperature in your house to 72 degrees. By the time you get home, the temperature in your house will be just right.

Nest

Daedalus Design Build

Daedalus Design Build

One of the best advantages of California’s implementation of energy codes is that the price of photovoltaic technology is falling dramatically. While California will always have abundant sunshine, it is likely that future household mechanical systems will use several technologies in unison to achieve a home’s energy demands and climate control. The urban Philadelphia residence seen here employs geothermal, solar electric and solar thermal systems to provide comfort. The Montana home below uses geothermal and solar systems for a large and sprawling design.

Teton Heritage Builders

Teton Heritage Builders

Solar panels double as shade devices and overhang protection for the doors of this Seattle house. Traditional architecture, as seen below, can include solar panels just as easily. Look for a future in which any house can be retrofitted with a myriad of technologies, as the solutions likely will be fluid and flexible.

Albertsson Hansen Architecture, Ltd

Energy storage. Probably the biggest challenge at this time is energy storage. It is currently difficult to achieve on an individual scale. Our public energy grids are still primarily dependent on power generated by fossil fuels, which can be readily adjusted based on demand. There are already problems with utilities wishing to maintain control of the energy grids and how they will handle the influx of individually generated supplies. Flexibility, on both the individual and public levels, will probably solve all of the challenges. Zero-net-energy homes may sound complex, but imagining zero dollars for electric bills, for at least a couple of months a year, seems simple enough.

Steven Randel, California licensed architect & contributing writer at HOUZZ

Will You Buy Your Next House On Your Smartphone?

Feb 18, 2015

 

We know that the mobile revolution is well underway and is becoming a major player in ecommerce. The Starbucks app, for example, has become very central to the coffee purveyor’s success.

However, mobile ecommerce is beginning to impact far bigger and pricier purchases than a Venti Caramel Brulée Lattee. According to aBankrate survey, almost half of everyone who surfs the mobile web has already made a “major financial commitment” like acquiring a car, insurance, stocks, or a mortgage on their mobile devices.

If you watch live television and aren’t able to zip past all the commercials, you have probably noticed how heavily TrueCar is promoting itself. And if you check out the company’s website, you’ll see that they put a huge emphasis on their mobile app.

The money trail

Watching where ad dollars are going is one of the best ways to get a handle on trends and TrueCar is investing heavily right now. (By the way, when Amazon experimented with online car buying back in 2000, it didn’t work out for them.)

Although about half of all mobile users say they have made at least one major purchase in this way, only 12 percent say they use their phones or tablets “always” or even “most of the time” for these big-ticket items. We can expect that number to go up dramatically as mobile device sales continue to outpace desktop and laptop sales.

Further, in the 30-49 year age group, 58 percent reported making a major purchase via some kind of mobile device. On the other hand, more than 60 percent of those age 65 or above said they neverbought a big-ticket item through a mobile device.

We can also expect these numbers to increase when Millennials get north of 30 years old. Right now, many Millennials aren’t heading up households, so they are less inclined to be the persons who make these buying decisions. When they become homeowners, have families and start building up investment accounts, we can expect them to rely heavily on their mobile devices.

The mobile app alternative

Normally at this point, I’d put in a pitch for creating a mobile app for your business – and I do think that’s a good idea. However, we’re finding that mobile users spend 80 percent of their time on just five apps. In other words, many specialized apps are seldom used. They often end up living on deeply buried screens or deleted entirely.

This highlights the importance of your mobile website. You may not be able to convince a mobile user to keep your app on his or her device, but if you have a great mobile website, you may be able to capture those eyeballs anyway.

As you review and test your mobile website, put yourself in the position of a mobile user and make sure the site is useful, functional and friendly. Ask yourself this question: If a mobile user was about to buy a big-ticket item on a mobile device, does my website make that purchase easy?

Full Story

75 Dead (Occupation: Real Estate)

A Vacant house, a Stranger, an Urgent request to Meet there Immediately . . . Absurd? It happens all the time to Realtors. In the hyper-competitive real estate profession you know if you don't jump, the buyer will find another Realtor who will. You know this kind of call is unlikely to be fruitful . . . but the eternally hopeful optimistic adrenaline junkie inside you starts cheering from the back of your mind, "What if this is the exception? Go! Go help Buyer...Go get it sold..." As Realtors, closings feed our families.

63 Dead in 2013:  38 Accidental . . . 25 Homicides.  The Bureau of Labor and Statistics reports an occupational average since 2003 of 75 fatalities per year industry-wide (real estate for sale, rent, lease).

As an industry, perhaps it's time Realtors re-educate the the buying public on the home buying process and implement professional courtesy standards requiring buyers to meet Realtors at their real estate offices for a Buyer Consultation prior to showing appointments and obtain from buyers a written pre-qualification/pre-approval for financing or proof of available funds for purchase prior to scheduling property showings. Perhaps the National Association of REALTORS® can amend the Realtor Code of Ethics to include a professional courtesy Article like this to promote Realtor safety, professionalism and productivity, buyer education and preparedness, and increased seller satisfaction by limiting showings to only buyers who have provided Realtor with a written verification of their ability to buy.  

Is expecting buyers to verify their ability to purchase what a seller has prepared for them, Realtor has researched and will devote their workday to showing them . . . too inconvenient for real estate buyers . . . or too radical to implement?  Or would serious buyers, sellers, local real estate boards/associations, state organizations like the Wisconsin REALTORS Association and Realtors across America benefit if such an Article is added to the National Association of Realtors' Code of Ethics? 

Until we take a stand together as Realtors and make such a pledge to each other, there will always sellers preparing their properties for "buyers" who cannot buy and Realtors who will feel the need to sacrifice professionalism, jumping to the urgent call and placing their personal safety at risk so they don't lose the potential sale to another Realtor.  

Certainly there are occupations far more dangerous than "Realtor."  Aside from cases where clumsiness and slippery walkways are involved, we shouldn't see any fatalities in this industry.  Homicides resulting from stranger-danger in our workplace can be avoided. 

This is an industry of professionals dedicated to helping people find and acquire "Home" -- a place of safety and security, where treasured memories are made, dreams come true and love abounds.  Can't we keep fear of occupational fatalities out of real estate by implementing a simple safety rule into the Realtor Code of Ethics?  

Maybe if the job description demanded we climb columns and peek in windows to avoid soiling sellers' carpets and save fuel by leaving the car at the office and hopping rooftop to rooftop to rooftop to show properties . . . then it might be difficult to avoid occupational fatalities.  Opening a door . . .  Homicide?

Let's stand beside each other and our seller-clients and take an oath to protect our professionalism, our safety, and our selling clients from the horrors and heart-ache that we create when bringing buyer prospects with unknown purchasing capabilities, unknown motives, and unknown histories into neighborhood properties.

http://www.bls.gov/news.release/cfoi.t02.htm

to Dream Fearlessly . . . The American Dream Lives

To dream fearlessly . . . to pursue our dreams with determination and courage . . . to believe we will successfully transform our dreams into our reality . . . to pick ourselves up when we fall, continuing the pursuit of our dreams . . . to overcome obstacles with creativity, sweat, faith . . . and persevere until we are living the dream (which inspires us to new dreams/goals) . . . is the heartbeat of America.


Home - Family - Career - Health - Joy - Love - Friendship - Education . . . The American Dream lives.  Pursuing my dreams while helping others pursue and achieve their dreams is my career as an independent real estate agent for Coldwell Banker The Real Estate Group Inc., an affiliate of Coldwell Banker Real Estate LLC.  More than profession, being a Realtor is an amazing experience.

To those who have given me the honor of helping them pursue their dreams during these seven years, Thank You!  You who are ready to pursue your dream of home -- be it the dream of your first home or vacation home or larger home or smaller home; be it a dream of extravagant luxury, the extravagance of "downsizing" and simplicity, and anywhere in between -- you can call on me to be your advocate and help you achieve your dream.

American Family Insurance, like Coldwell Banker, inspires us to Dream Fearlessly.   Enjoy the music video.  Be inspired.  Dream.