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Our Economist’s Top Tips for Selling a Home in 2016

by The Apples Team

If you’re planning to sell your house this year, well, you’re in luck.

“The 2016 housing market is forecasted to be mainly a seller’s market, filled with increasing home prices, relatively low inventory, and fierce competition between buyers,” says Jonathan Smoke, chief economist for realtor.com®.

But you could still make missteps on the way to the bank. Yes, your house will likely sell, but when? Remember, time is money.

“For sellers, it’s about understanding the ins and outs of their local market so they can optimize the price of their home and close quickly,” Smoke says.

Smoke and his team analyzed market trends to distill their best advice for homeowners looking to sell in 2016. Follow these tips to get the most out of your home sale.

Price your home to the market

“What Realtors® tell me over and over again, and from the analysis that I’ve seen historically, the most important thing is getting the price right,” Smoke says.

 

In 2016, prices are expected to increase nationally 3% year over year. Local price changes are anticipated to be more dramatic, with markets such as Stockton, CA, and Las Vegas, NV, expected to increase by 10%. But that doesn’t mean those stats are true of your town, or your neighborhood.

“Making the error of going for a price that’s well above the market price is a recipe for being let down and potentially not selling the home at all,” he adds. A home that sits on the market eventually will turn off buyers, who will suspect that something is wrong with it.

Sellers who work with a local Realtor to optimize the price of their home based on its unique features and surrounding neighborhood are often able to receive the highest price for their market and sell more quickly.

List during peak season

Unlike buyers, who want to minimize competition, sellers benefit from demand. Prime home-buying season begins in April and reaches its peak in June, according to realtor.com analysis of home sales. Sellers who list their home during the prime spring and summer months benefit from a larger population of buyers and potential bidding wars, which often result in higher prices and faster closings.

Offer incentives

This one seems counterintuitive, given what we’ve said about a seller’s market, but hear us out. Last year—the best for U.S. home sales in nearly a decade—37% of all sellers offered incentives to attract buyers.

“The nature of this market is that you’re going to have more first-time buyers, who are more dependent on financing,” Smoke says. Getting a loan is one thing; coming up with a chunk of cash for closing costs, on top of the down payment, is another.

“If you’re a seller and you’re able to offer some money toward closing costs, you’re actually making it easier on that buyer, and they might be more willing to give you the full asking price,” Smoke explains. You could end up with a faster sale and more profit.

Best place to sell a home: California

This isn’t really actionable advice since if you don’t already own a home there you won’t be selling one, but FYI: California markets are accelerating past the already strong national averages and showing extremely favorable conditions for sellers.

Robust job growth, increasing prices, and limited inventory have sellers ready for big gains in the greater metro areas of StocktonBakersfieldFresno, and San Jose. Once you’ve sold, though, you may not be able to afford to buy again in the area—we’d suggest looking in the Midwest or South.

 

This article was originally posted on Realtor.com.

4 Ways You Can Borrow a Down Payment

by The Apples Team

Planning to buy a home sometime soon? It’s an expensive proposition, and if you need help coming up with a down payment, it’s important to know which sources you can tap to make your home-buying dreams come true. Here are four ways to borrow a down payment.

1. 401(k) retirement plans or liquid assets

Many 401(k) plans have special borrowing provisions that allow you to repay the amount borrowed with preferential terms. Some 401(k) plans even allow you to avoid penalties buying a primary home, while others have fewer restrictions for first-time homebuyers (defined as someone who hasn’t owned a home in the past 36 months). Every 401(k) plan is different so check for details with your Human Resources department. Additionally, if you have liquid assets, your financial institution may allow you to take a loan against your cash.

2. Home equity line of credit

If you already own a home and are looking to purchase a second home or even an investment property, you can borrow money from a home equity line of credit. This option exists so long as your income and debt picture supports repayment of the line of credit as well as the other monthly carrying costs (taxes, insurance, homeowner association fees, private mortgage insurance, etc.).

3. Cash-out refinancing

Another way to buy a home is to leverage the value of your current home. Known as cash out refinancing, it can provide you with money equal to up to 80% of the value on your primary home, and a bit less if the home is rental property (70%) or a second home (75%). Your specific scenario might present different loan-to-value restrictions, so be sure to talk to a qualified loan officer.

4. Personal loan

A cash deposit to your account acquired from a personal loan may be considered eligible only after 60 days of “seasoning.” Seasoning is a banking term that refers to the timeframe funds are in a bank account for use in a mortgage transaction.

Mortgage tip: Banks and lenders want to know that you have the financial capacity to save money for a down payment or to get it from a donor.

Banks, lenders, and mortgage brokers need to be able to verify you have the funds to buy a home, and that those funds are legitimate funds in some sort of a bankable paper trail bank account. Money sitting at home in a safe or cash obtained from side jobs can’t be used to buy a home.

Importantly, money given to you as a gift to help with a down payment must come from a legitimate source. Any repayment of gift funds is not a gift. If, for example, a relative is giving you $40,000 to buy a home, he or she will need to provide an executed gift letter stating the money truly is a gift, and provide bank statements showing the ability to donate those funds. Lenders will require this for each and every gift amount. Federal regulations require banks to document all funds used in the transaction. As long as your mortgage lender can substantiate your funds from one of the eligible sources, you don’t need to have lots of cash to buy a home. As a general rule, more income will be needed to offset the mortgage payment when a lower down payment is used to buy a home.

Remember, too, that a good credit score can help you net a competitive rate on your mortgage so you should check your credit before you apply for one. You can do so by pulling your credit reports for free each year from AnnualCreditReport.com and viewing your credit scores each month on Credit.com.

This article was originally posted on Realtor.com.

NEW LISTING: 5932 Bellflower Blvd.

by The Apples Team

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6 Stellar Reasons to Buy a Home in 2016

by The Apples Team


Is it really 2016 already?  For those of you who happen to be planning on buying a home in the new year—or even just trying to—there’s a whole lot to celebrate. Why? A variety of financial vectors have dovetailed to make this the perfect storm for home buyers to get out there and make an (winning) offer. Here are six home-buying reasons to be thankful while ringing in the new year:


Reason No. 1: Interest rates are still at record lows
Even though they may creep up at any moment, it’s nonetheless a fact that interest rates on home loans are at historic lows, with a 30-year fixed-rate home loan still hovering around 4%.


“Remember 18.5% in the ’80s?” asks Tom Postilio, a real estate broker with Douglas Elliman Real Estate and a star of HGTV’s “Selling New York.”“It is likely that we’ll never see interest rates this low again. So while prices are high in some markets, the savings in interest payments could easily amount to hundreds of thousands of dollars over the life of the mortgage.”


Reason No. 2: Rents have skyrocketed
Another reason home buyers are lucky is that rents are going up, up, up! (This, on the other hand, is a reason not to be thankful if you’re a renter.) In fact, rents outpaced home values in 20 of the 35 biggest housing markets in 2015. What’s more, according to the2015 Rent.com Rental Market Report, 88% of property managers raised their rent in the past 12 months, and an 8% hike is predicted for 2016.


“In most metropolitan cities, monthly rent is comparable to that of a monthly mortgage payment, sometimes more,” says Heather Garriock, mortgage agent for The Mortgage Group. “Doesn’t it make more sense to put those monthly chunks of money into your own appreciating asset rather than handing it over to your landlord and saying goodbye to it forever?”


Reason No. 3: Home prices are stabilizing
For the first time in years, prices that have been climbing steadily upward are stabilizing, restoring a level playing field that helps buyers drive a harder bargain with sellers, even in heated markets.


“Local markets vary, but generally we are experiencing a cooling period,” says Postilio. “At this moment, buyers have the opportunity to capitalize on this.”


Reason No. 4: Down payments don’t need to break the bank
Probably the biggest obstacle that prevents renters from becoming homeowners is pulling together a down payment. But today, that chunk of change can be smaller, thanks to a variety of programs to help home buyers. For instance, the new Fannie Mae and Freddie Mac Home Possible Advantage Program allows for a 3% down payment for credit scores as low as 620.


Reason No. 5: Mortgage insurance is a deal, too
If you do decide to put less than 20% down on a home, you are then required to have mortgage insurance (basically in case you default). A workaround to handle this, however, is to take out a loan from the Federal Housing Administration—a government mortgage insurer that backs loans with down payments as low as 3.5% and credit scores as low as 580. The fees are way down from 1.35% to 0.85% of the mortgage balance, meaning your monthly mortgage total will be significantly lower if you fund it this way. In fact, the FHA predicts this 37% annual premium cut will bring 250,000 first-time buyers into the market. Why not be one of them?


Reason No. 6: You’ll reap major tax breaks
Tax laws continue to favor homeowners, so you’re not just buying a place to live—you’re getting a tax break! The biggest one is that unless your home loan is more than $1 million, you can deduct all the monthly interest you are paying on that loan. Homeowners may also deduct certain home-related expenses and home property taxes.

 

This article was written by Kimberly Neumann and originally posted to Realtor.com.

 

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Contact Information

Apples Team
Berkshire Hathaway HomeServices California Properties
11409 E. Carson Street
Lakewood CA 90715
562-884-1863 / 562-221-2794
562-900-6761
Fax: 562-809-0841

Angie BRE# 01292393, Kathy BRE# 00853237, Cathy BRE# 01255708

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