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Millennial mortgage problem: Down payments and expensive cities buff.ly/2xF4nWe #realestate #Homeowner #Economy #Investing

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Real Estate - Mortgage

The 5 Most Expensive States for Homeowners

If you want to live near the coast, according to a report, you should be prepared to work some overtime. According to the report, to afford the median mortgage in Los Angeles, San Francisco, and Miami, if the head of the household is earning median pay, they would have to work more than 100 hours a month to afford their mortgage. The top 5 cities were Los Angeles (112 hours), Miami (109 hours), San Francisco (107 hours), Boston (95 hours), and Oakland (83 hours). “That’s right—you don’t need to work past lunch on Wednesday to earn enough money to make a mortgage payment in [such locations]. According to the above data, it doesn’t come as a surprise why California would be No.1 on the list of most expensive states with the median home value prices at $449,100. In the 5 least expensive states, No. 1 was West Virginia ($112,100), Mississippi ($112,700), Arkansas ($120,700), Oklahoma ($126,800), and Kentucky ($130,000).

Millennial mortgage problem: Down payments and expensive cities

Contrary to popular opinion, which says Millennials are city-worshipping vagrants, 80% of respondents said they plan to buy a house or apartment. And when it comes to the reality of home mortgages, most Millennials probably aren’t going to like what they see. Apartment List determined how long it would take the average respondent to save for a 20% down payment based on how much they’ve already saved, how much help they anticipate receiving, and how much they’re saving each month. Based on those factors, Apartment List says it will take Millennials between five and 23 years to save up enough money to afford a condo in 31 popular cities. At this rate, Millennials in 16 cities will have to wait more than a decade before they can afford a down payment — and in three cities, they’ll have to wait more than 20 years! FHA loans: With the backing of the Federal Housing Authority, first-time homebuyers with credit scores of 580 or above might be able to put as little as 3.5% down. To see what’s available in your area, search for “down payment assistance” or “first-time homebuyer grants” in your state.

4 types of PMI: which one is right for you?

Thanks to private mortgage insurance, or PMI, U.S. home buyers have a number of low, or even no downpayment options available to them. There is no upfront cost to this type of PMI, and no waiting period to cancel it via a refinance or lump-sum payment to your principal loan balance. Home buyers who choose lender-paid mortgage insurance might have a lower mortgage payment than if they paid PMI monthly. Single premium PMI results in a lower monthly payment compared to paying PMI monthly, which helps the buyer qualify for more home. If rates drop and you refinance in a few years, for instance, you lose that upfront payment, or have a higher loan amount because of it. For instance, a home buyer purchases a home for $250,000. Generally, home buyers who plan to stay in the home and don’t plan to refinance might consider buying out their mortgage insurance via LPMI or a borrower-paid single premium.

FHA loans allow 100% down payment gifts

Home buyers are enjoying the popular USDA home loan and VA mortgage program, neither of which require any money down. Under the 203(k), the home buyer can finance up to $35,000 for necessary repairs. The home buyer will obtain a gift letter from the gifting individual or organization. Make sure your gift donor is comfortable including their bank statement with the gift letter, and that the transfer amount matches the gift letter and the deposit into your account. Also check to see if your state and employer offer a program called employer assisted housing (EAH). Mortgage rates for FHA loans are low, and FHA does not require higher rates when you use a downpayment gift.

Does the mortgage interest deduction help or hurt homeownership?

After President Donald Trump announced his new tax plan, some experts from the mortgage industry responded that the mortgage interest tax deduction is at risk. One reasons for this sentiment is the following statement: “People don't buy homes because of the mortgage deduction,” Trump’s Chief Economic Advisor Gary Cohn said. NAR and other experts fear that by raising the standard deduction, less people will itemize, and the mortgage interest deduction will have less value. In fact, one expert says that while she would prefer to revise it, if she had to choose between keeping the deduction or getting rid of it, she would rid of the mortgage interest rate deduction. In addition to increasing the standard deduction, the tax plan also eliminates many itemized deductions. “By lowering the pass-through rate, the plan will reduce the tax bill of thousands of small businesses and help to spur job and economic growth,” said Granger MacDonald, National Association of Home Builders chairman.

First-Time Home Buyers Guide: Picking The Right Mortgage Program

You can buy a home and use a mortgage. Mortgage loans aren't all the same, either. When you make a large down payment, you'll need to borrow less money from the bank, which will reduce your monthly mortgage payment. However, when you make a large down payment, you risk depleting your bank accounts of their savings. With a credit score of 620, you can get access to most available mortgage loans. However, with conventional mortgages, borrowers with lower credit scores pay higher mortgage rates. Therefore, borrowers with lower credit scores may be better suited for FHA, VA, and USDA loans -- none of which penalize home buyers for having average or below-average credit scores. Via HomeReady™, home buyers in gentrifying districts can usually get access to a discounted mortgage rate, regardless of household income.

Do People Really Buy Homes For The Mortgage Interest Deduction?

As the debate continues on proposed tax reform, one of the issues that has attracted attention is the deduction for mortgage interest. Although the tax framework under discussion wouldn’t cut the deduction, the plan proposes a potential doubling of the standard deduction, which could make the mortgage interest deduction a moot point for many people who claim it—they wouldn’t have enough in deductions to warrant itemizing. Is that a big deal? The president of the NAR, William Brown, said in a statement, ‘There’s a reason our nation has incentivized homeownership in the tax code for over a century. And only about a quarter of tax returns claim the MID overall. “The mortgage interest deduction is often an incentive for prospective homeowners, particularly here in the Northeast where housing prices are considerably higher than the national average,” says George Gagliardi, a financial planner in Lexington, MA. “Even if the current standard deduction were to double, there would still be a significant incentive for higher earning families who are buying more expensive homes,” says Abe Ringer, a financial planner in Boston. And in the end, the reason many people buy a home is because they’d rather build equity than continue to pay rent forever.

2 million California homeowners live mortgage-free

New census stats show 29 percent of all owner-occupied residences in the state were mortgage-free last year, up from 23 percent a decade ago. Now, 2016’s share of California owners living mortgage-free runs below the U.S. norm: Nationwide, 27.7 million homeowners have no mortgage or 37 percent of all ownership situations. Other borrowers today choose to eschew debt as lenders made it more difficult to borrow. Those owners lived in homes with a median value of $603,100 in 2016. In Riverside County, there were 130,000 mortgage-free owners, up 22 percent in a decade, in homes valued at $265,600. The decline in the number of mortgaged homes isn’t just a California issue: they’re down 9 percent in a decade nationwide. Please note the significant wealth, at least on paper, these mortgage-free owners control. My trusty spreadsheet’s rough estimate — multiplying the count of debt-free owners by the median value of mortgage-less homes — shows eye-catching unencumbered home values worth $211 billion in L.A. County; $101 billion in Orange County; and $60 billion in the Inland Empire. 1 with 52 percent of its owner-occupied homes mortgage-free.

Pros and cons: Should you get a reverse mortgage?

Because Davis failed to get needed paperwork filed on time, the forecloses on his home of 45 years on Friday, Sept. 29. A reverse mortgage isn’t due until the borrower sells, moves or dies. Interest and fees are added to the loan balance. But borrowers can lose their home if they fail to pay property taxes, insurance and homeowners association dues, fail to adequately maintain the property, move out for a year to live in a nursing home, or violate any other loan terms. Taking out a traditional forward mortgage or home equity line of credit, if the borrower can qualify and can afford the payments. Last week Duane Davis joined those losing their homes because of a reverse mortgage. In 2006, he wrote a letter relinquishing his interest in the Chula Vista duplex he had shared with his wife since 1972.

New mortgage pays off student loans, too

Borrowers who purchase newly-built homes from Eagle's parent company, Lennar Homes, can get up to 3 percent of the purchase price for paying their student loans. According to Lennar, it will contribute up to 3 percent of the purchase price of a new home for paying down student loans. According to Eagle Home Mortgage, the Student Loan Debt Mortgage Program is being offered on a trial basis with new Lennar homes nationwide. So students that buy homes today may use tr increasing value to whittle their student loan balances down the road. It also created policies to help borrowers with student loan debt qualify for mortgages. What are today's mortgage rates? Buyers with student loans could use the home they purchase today to pay off their loans -- either through a program like Eagle's, or a refinance like Fannie Mae's once their property appreciates a bit.

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What Do You Do if Your Tenant Dies?

What Do You Do if Your Tenant Dies?. If you are a landlord for long enough, odds are you will have to deal with a tenant passing away while in a lease at one of your properties. We’ve had it happen several times. I can tell you that it’s an odd space to be in: You’ll have to deal with the human side of it when working with the tenant’s heirs, but you’ll also have to do what’s right for your company. I also identify how to handle the tenant’s relatives — who may request to access the unit and the tenant’s possessions — because there are rules dictating who can have access to the space. Lastly, I address who is responsible for the rent and removal of the tenant’s possessions. Once you watch the video, be sure to leave a comment here on BP! How did you find out? And how did you deal with it? I would also love to hear about different state laws, as I understand they are very different in dealing with the death of a tenant.