Thursday, March 28, 2019

See? Your Home Is An Investment AND A Roof Over Your Head Too!

How to Put Your Housing Cost to Work for You

How to Put Your Housing Cost to Work for You | MyKCM

There has been a lot written about the benefits of homeownership. One benefit that continues to rise to the top is the added wealth homeowners gain simply by paying their mortgage while their home increases in value over time.
The National Association of Realtors (NAR) recently broke down the equity gained from price appreciation and principal payments in their Economists Outlook Blog. Homeowners who purchased their homes five years ago have already gained almost $80,000 in equity over that time with 80% of the gains coming from price appreciation.
For a homeowner who purchased their home 30 years ago, they have gained nearly $250,000 in equity with 70% coming from price increases. The full results can be seen in the chart below.
How to Put Your Housing Cost to Work for You | MyKCM
According to the Home Price Expectation Survey, a family who purchased a median priced home this January can expect to gain more than $42,000 over the next five years simply from price appreciation alone.

Bottom Line

Your home is one of the only investments you can live inside as you pay it off over time. If you are ready to use your housing costs to build wealth, let’s get together to discuss how to make your dream a reality.

Tuesday, March 19, 2019

What Credit Score Do You Need To Buy A Home?

What Credit Score Do You Need To Buy A House?

What Credit Score Do You Need To Buy A House? | MyKCM

There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!
Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:
  • 16% Very Poor (300-579)
  • 18% Fair (580-669)
  • 21% Good (670-739)
  • 25% Very Good (740-799)
  • 20% Exceptional (800-850)
Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,
Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”
There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640Veterans Affairs (VA) loans have no credit score requirement.

As you can see, none of them are above 700!

It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:What Credit Score Do You Need To Buy A House? | MyKCMAs you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!
One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. confirmed that only 57% of individuals sought out their credit score at least once last year.
FICO® reported,
Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”
Here is the increase in the average US FICO® Score over the same period of time as the graph earlier.
What Credit Score Do You Need To Buy A House? | MyKCM

Bottom Line

At least 84% of Americans have a score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream!

Friday, March 15, 2019

Home Sales Activity March 15, 2019

Go ahead, guess? What's our active inventory in our lovely Santa Clarita Valley and surrounding neighborhoods? Can ya guess? Don't fret...I'm obviously going to tell you!!!

Well, needless to say...we are obviously not in Honolulu, but I thought it was a pretty cool pic with the active number of listings in my specialty area!

So, yes, homes for sale. 454 under contract, buyer and seller have agreed to purchase price at least. 260 sold, aka closed escrow, in the last 30 days.

Just keeping you current on the happenings with homes. I include Acton, Agua Dulce, Canyon Country, Saugus, Valencia, Stevenson Ranch, Newhall, Castaic, and Val Verde.

Got a Val Verde, Newhall, and Saugus listing coming soon so I'll be adding to those numbers!

Wednesday, March 13, 2019

HUGE Don't Do's After Applying For A Home Loan!

7 Things To Avoid After Applying for a Mortgage!

7 Things To Avoid After Applying for a Mortgage! | MyKCM

Congratulations! You’ve found a home to buy and have applied for a mortgage! You are undoubtedly excited about the opportunity to decorate your new home! But before you make any big purchases, move any money around, or make any big-time life changes, consult your loan officer. They will be able to tell you how your decision will impact your home loan.
Below is a list of 7 Things You Shouldn’t Do After Applying for a Mortgage! Some may seem obvious, but some may not!
1. Don’t change jobs or the way you are paid at your job! Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.
2. Don’t deposit cash into your bank accounts. Lenders need to source your money and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
3. Don’t make any large purchases like a new car or new furniture for your new home. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher debt to income ratios… higher ratios make for riskier loans… and sometimes qualified borrowers no longer qualify.
4. Don’t co-sign other loans for anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payment against you.
5. Don’t change bank accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer money between accounts, talk to your loan officer.
6. Don’t apply for new credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.
7. Don’t close any credit accounts. Many clients have erroneously believed that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.s 

Friday, March 8, 2019

Um, I'm Not So Sure About This New Look!

Houzz peeps went to the Kitchen & Bath show of 2019 in Las Vegas. The came back with some interesting items to consider in your next remodel!

Entire article is here: Cabinets & Counters ~ New Looks for 2019!

It's almost completely opposite from another article I read on Houzz in the last few months though.

Which means, as always, whatever remodel you it for you. Well, sort of. Do what gives you joy, but don't go crazy wild. Don't remodel in some way that it's just obvious you did it in 2019. Remodel in ways that stand the test of time...with a 2019 touch.

See? This is so obviously modern. But, will it be attractive to someone 10-15-20 years from now? I don't think so. There were a few that were 'wrap-around' type islands. I'm not a fan.

There is one from Corian....a bendable wood-look surface. I'm in escrow with some buyers that love the butcher block in the kitchen. I let them know they will have to sand it down routinely or never cut on it. The Corian material would probably work great!

Oh, by the cabinets are apparently still in!!

Tuesday, March 5, 2019

Keep, Donate, Sell ~ Preparing to Move

I read through everything I had in my 'Blog Topics' folder. A lot was about if we were going to have a crash, or if we're not going to have a crash. Maybe a recession, maybe not a recession. Since I don't have a crystal ball, I'm refraining from further opinions on these subjects!

But, one from Houzz was about organization, which papers to keep, which to toss.

So, that reminded me of a conversation I just had with first time buyers over the weekend. And, how frequently I have the same conversation with sellers when getting ready to list their home.

It's all about the dreaded move.....and, it's so much better to get everything sorted than taking it with you in hopes you'll sort it once you're in your new place.

Trust me, you won't. You'll find many other things to occupy your time at a new home than sorting through old, dusty, yucky papers & possessions.

So, all you people anticipating a move from one house to another.....Do This:

Create 3 'piles'. Call them whatever you want. But, when you're going through stuff to pack....find things you must have. What is that new lady saying? Things that bring you joy. If they don't, are they dumpster worthy or are they donate worthy? Don't donate what should be dumped, and vice versa.

When you start the sorting process, you may have piles that look like this picture. That's okay! Get through it, you'll be glad you did. It will help tremendously on moving day & then unpacking in your new home.

Heck, I can even get you boxes or tell you good places to donate! If I haven't worn something in a year? Donate. If it's collecting dust in a closet? Donate. If it's a cherished photo of my children? KEEP!!! And, if it's a broken frame I thought I'd repair.....dump!

Friday, March 1, 2019

Should You Co-Sign A Loan?

I saw this more often when I first started 17 years ago. I don't see it that much anymore, but I read something that made me think I should 'talk' about it.

Your kid/sibling/friend wants to buy a place, you want to help them, so you consider becoming a co-signer on their home purchase.

Things to consider:

* You are responsible for that loan if the other person fails to pay the mortgage.
* Co-Signing will affect your credit, not just the main borrower. See comment above.
* It can harm your chances of another purchase. That mortgage you co-signed on counts against your debt-to-income ratio.
* You have to submit alllll of your paperwork, just as if you were the primary borrower.
* This one really is the most important......should you really co-sign so a person can stretch for their purchase? That's a personal decision you'll have to make.

Being a co-signer can be a great, or not so great, thing. Just make sure you know what you're possibly getting into with your generosity. Talk to your trusted financial adviser before taking the co-signing plunge.