The Home Seller?s To-Do List for 2020
As the new year takes its first steps, the real estate business is closely analyzing 2019 to see what 2020 will bring. There were some pretty exciting developments last year, and they?ll definitely play a major role in the future. In fact, some trends, like those that SpendMeNot?s real estate market research noted, will be pivotal for anyone looking to sell this year.
So what will it take to turn the real estate market in your advantage as a property seller in 2020? Here?s a useful and to-the-point guide to tell you exactly that.
Prepare for Slow Growth of Home Prices
In line with the growth we?ve seen thus far, house prices should be increasing somewhat in the current year. This growth probably won?t be all that radical, measured at 2.8% by some estimations, but it will nevertheless impact the way you go about your job.
One consequence that you can look forward to is the fact that you?ll probably be making more of a profit. Though not an amazing rate, a bit shy of 3% is nothing to scoff at.
That said, you won?t be overjoyed when you hear that you probably won?t see as many offers as you could have in 2019. An increased price will unavoidably narrow down the amount of people that can afford to make an offer you?ll be satisfied with.
Overall, it?s a bit of a give-and-take situation where you need to take advantage of both the good and the bad. The best way to do that, in this case, would be to make your house stand out as much as you can. In the highly discriminating market we?re looking at right now, a property with more to offer will get a lot more attention from buyers.
Facts About?Housing Data
- 50% of buyers?found their home on the internet
- 5.34 million existing homes were sold in 2019
- The US housing market was worth?$33.3 trillion?in 2018
- Sales of existing homes will fall?1.8% from 2019
- The cost of renting has gone up by?66%
- 6% of younger millennials were first-time homebuyers
Cater to Today?s Main Buyers: MIllennials
Millennials (people born roughly between the 1980s and 2000s) currently represent the majority of home buyers. How large a majority? As many as 67% of all buyers come from this generation.
What does this mean for you? Well, it means that, if you want results, you will need to adjust the way you sell. Here are a few pointers to help you do that.
Highlight certain features that they?re on the lookout for. Garage storage, patio, laundry room, and hardwood front exteriors are among the popular home features for millennials, but there are plenty more, so don?t worry if your property doesn?t have those. Highlight the ones that it does have, though, and you?ll quickly see more interested parties.
Make sure that your online listings are high-quality. Practically everyone (especially millennials) relies on the internet to find whatever they need, and homes for sale are no exception. Therefore, anything you have about your property online should be updated and looking sharp - high-quality photos and a video recording of the place will get you a long way.
Emphasize qualities other than square footage. Nine times out of ten, given a choice between a large house and one that?s near good schools or has a good commute, millennials will choose the latter. As long as you make these perks a priority to emphasize, you?ll do great.
Expect Low Mortgage Interest Rates, but Don?t Count on Them
Last year, mortgage interest rates fell under 4% for common kinds of loans. For 2020, the trend will likely remain the same, and this rate shouldn?t go anywhere above 3.7%. That said, interest rates can fluctuate depending on economy shifts, so it isn?t a prophecy set in stone.
For you, a low interest rate will translate into more interest from people. It?s only logical, after all, since they will have to pay less overall in these conditions. But there?s little guarantee that the rate will stay as is, so be prepared for the opposite.
Should the interest rate rise, you?ll see plenty of prospects beginning to hesitate, so you?ll likely be in a bit of a bind if you?re pressed for time to sell that house of yours. It could theoretically swing either way, but the chances are that the rates will stick to their current estimates.
Buying a Home can be Overwhelming.. But You Have a Friend in the Business
YES? it is possible to buy a home for your family, even if you do not know where to start! We are here to guide you.
Buying a home can be overwhelming and there are so many things you have to do before you can get your keys to your home.?
The very first thing you should do is find out what your credit score is. If you do not know what your score is you can get a copy of your report for free from annualcreditreport.com
Once you have your report look at the following items:
- Locate and know your score
- Are there any errors? For example Payment history, balance, date opened/closed
- Do you have any collection, charge off or judgment accounts?
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If there are any errors in your credit report you should dispute them to the credit bureaus. We found a free app that allows you to dispute your errors all in one place. The app is called UpTurn. We are still testing this app, but thus far we are quite pleased with the app. And you cannot go wrong with FREE!
If you?d like to talk to us about purchasing your first home, just leave a comment or send us a message!?
Why Credit is Your Secret Weapon in Getting a Mortgage
Do you know how important your credit is in obtaining a mortgage? It is the secret weapon that will put you at the top of the lender?s list to approve your mortgage. But you have to do some work to ensure that your credit is ready to take on a mortgage. Before you start the house-hunting process you need to have your ?Credit House? in order.????
There are three critical aspects of obtaining a mortgage; your credit report, the money you have allotted for the down payment as well as closing costs, and your income. Lenders want to paint a picture that encompasses all these aspects to make sure they minimize their risk and ensuring they are setting you up for success.
According to the American Bankers Association, less than half of all U.S. consumers know their credit score is or have reviewed their report in the last 30 days. Your credit score is the first thing a lender reviews and it determines if you get to go to the next step of the application process. TIP: Your credit score will determine your interest rate on your mortgage and what type of loan you will be offered.??
The next item is your down payment and monies you have saved for closing costs on your mortgage.? The more money you have saved towards both these will make the lenders? decision much easier to approve you. Yes, there are loans, such as FHA loans that only require 3.5% as a down payment. Closing costs typically run between 2% and 4% of the loan amount. For example, on a loan of $100,000, there could be between $2,000 and $4,000 in closing costs. On that $100,000 loan, you would have to have $3,500 saved for your down payment. TIP: There are down payment assistance programs available for first-time homebuyers.
The last but not least important item in obtaining a mortgage is your J-O-B. The lender is looking for the following: how long have you worked at your current employer, do you earn enough to pay the mortgage and your bills on a monthly basis, lastly are you able to save money after all your bills are paid. These are basic items lenders look at, but the lender could ask for additional financial documents. TIP: The more you can save the better your application looks to the lender and the better your loan terms could be.?
Once you have all these items to your lender they will then produce a pre-approval letter that you can use to find a home. The pre-approval letter will explain all the terms of your loan and the all-important dollar amount you are approved for your home purchase.? At this point, you are ready to go out and start looking for a home. TIP: Your pre-approval has a 90 to 120-day expiration, meaning if you do not purchase a home during that time the lender will have to pull your credit again.??
If you are ready to be a homeowner the first thing you need to arm yourself with is your credit score. Get your free annual credit report and know where you stand with your credit. If you need assistance or have questions feel free to reach out to us by email or call us at (812) 777-5850.??
How To Purchase a Home When You Have Less-Than-Perfect Credit
How To Purchase a Home When You Have Less-Than-Perfect Credit
While not having such a great FICO Score does make it a little trickier to purchase a home, but there are alternatives out there to help you become a homeowner. Keep reading to discover what you can do to become a homeowner even if your FICO Score is less-than-perfect.
Research government-backed funding programs
While standard financing programs normally have a minimum FICO Score of 620, government-backed mortgage programs - such as FHA, VA, and also USDA - tend to have looser credit qualifications. In each case, the Federal Government is the entity that backs your loan if you default, which assists lenders with their losses.
The minimum FICO Score for each loan type are below:
FHA: 500 - 579 FICO Score with a 10% down payment or 580+ FICO Score with a 3.5% down payment.
VA: VA loans have no official FICO Score requirements. Instead, each application is evaluated on a case-by-case basis. All though, the mortgage provider you select could have a minimum FICO Score requirement.
USDA: Like VA loans, USDA loans have no defined FICO Score requirements. While a FICO Score of 640 is required for a streamlined approval process, homebuyers with lower FICO Scores could be approved based upon extenuating circumstances.
Keep in mind that if you're looking at one of these options to purchase your home you should determine if the lender you are wanting to work with has extensive experience. Take your time and research the lender, and do not be afraid to ask questions.
Saving More Can Help You Get Approved
Keep in mind, your FICO Score is only one of the elements that are taken into consideration when obtaining a mortgage. Your yearly earnings, work history, as well as the amount of money you have saved - or the funds you have for your down payment and closing expenses - will certainly also play a role. If you have a lower FICO Score one of the best ways to get a mortgage is by showing your lender your savings. Tip: The larger percentage of your down payment to your purchase price equals LESS risk to your lender.
Take a Look at Portfolio Lending (Owner Financing)
If you don't qualify for traditional lending, your lender could offer you another option that is called Portfolio Lending. With portfolio lending(Owner Financing), your lender does not sell your loan to a third-party company like Fannie Mae or Freddie Mac, the lender will maintain your loan as part of their in-house portfolio.
Because your lender is not selling your loan to a third party, they can establish their own underwriting criteria. Additionally, be cautious about the terms the lender offers you. Lenders that provide portfolio lending typically offer higher interest rates, and could also charge more origination fees (Which have to be disclosed).?
Work with a Non-Profit that Provides Credit Services
If all else fails, you can always find a local non-profit to work with to improve your FICO Score. Do not be afraid to ask for assistance! With all the different pieces of information that go into your FICO score, it is hard to know what piece(s) will improve your score. Design a plan with your counselor that works for you, and provides clear milestones.
BONUS TIPS:
- Know your credit! Get a free copy of your credit report
- If you need help understanding your Credit Report?.Get Help
- If your FICO Score is at or above 620...Great
- Find a Lender that you want to work with. There are some great 1st-time home buyer programs out there. Here is a list of them by State
- Understand how much you can afford and what costs are part of your mortgage payment?
- Save for a Down Payment. As little as 3.5% of the purchase price (Grant options are available)
- Know what Closing Costs will be on your loan and have those monies set aside
- Start researching homes in your budget?
- Attend open houses and THINK?..Long Term
- Prepare to close on your new home and move
?BONUS BONUS TIPS:?
?FICO Scores below 620...Here is what you can do to supercharge your Score!
- Pay off any collection accounts. If you cannot pay off all at once start with the smallest balances. The others work with the creditor on a payment plan that works for your budget.?
- Judgments/Liens- Contact the Creditor to work out payment terms. The longer they are unpaid the more accrued interest you will have to pay.?
The Good, The Bad, and The Ugly About Contract Sales!
This is your opportunity to learn how a typical real estate investing in underserved communities does social good, by generating multiple revenue streams for investors. TruPodcast series host and investor Ryan DeMent candidly shares his personal experiences and current industry insight that you won't find elsewhere. Let's get right to it. Ryan DeMent here from TruVest.
Hope you're having a great day. Today's topic owner financing contracts. I have to say I'm fired up because I get anywhere between five to 10 calls a week on contracts and guess what? They're worthless. And the reason why is because they're not recorded. They don't give you any type of home ownership. If that contract that's put in writing and it's not recorded with your county assessors office and you become the actual owner of the property, you're getting no benefits. And the other piece of it is probably 90% of the contracts that are recorded or put together don't even get reported to your credit.
So that balloon came that you have 12 to 24 months down the road. Guess what? You have to go get a real mortgage from a bank that potentially is not going to actually finance you because your credit is not good. So why do you want to do a contract? Good question. I don't have an answer, but I can tell you this. If a contract is done right, it should benefit you. It should one list you as the owner. Two, it should be serviced by a mortgage entity to where you send your payments to three, it's reported to the credit bureaus. So you get positive and negative tradelines for your payment history and the fourth, you should be able to write off the mortgage interest on that property when you're making those payments annually.
There is How Much in Closing Costs?
Hey guys, Ryan DeMent here from TruVest hope you guys are having a great day on this podcast we are going to talk about closing costs for a mortgage and this example is going to be on an FHA loan for $80,000 the reason why I'm doing this is we get a lot of people telling us that they think buying a home with a mortgage, you're going to come zero out of pocket.
Well, there are some loans that are that way. There's a VA and there's a USDA that I know of and guess what? You have to be a veteran to get that or USDA is you basically live in a rural area. Well everywhere we're working at right now is not rural and the individuals that are coming to us right now are not veterans.
The veterans that we are working with totally understand this process and willing to work through it, but most people that we're talking to and we educate them upfront that they literally need to have 4.5 percent of the purchase price in their bank today to make this purchase work. If you have any questions, comments, please feel free to reach out to me. Look forward to talking to you guys. Have a great day.
Travel Updates, Connections, and Market Insights!
Hey guys, Ryan DeMent from TruVest hope you're having a great day. Third installment of the Vlog. Got Three things to talk about my trip to Indiana last week and the good people that I met, some things that are going on with us and last is a little bit more of a general market overview of what I'm seeing with the tools I'm using.
Some of the things that, that I'm coming across and how we're going to look at them. Because as much as we don't want to say it, there is a market correction coming. It's out there, it's brewing, we're looking at it, but we've got to do something with it. So I'm going to talk a little bit about it, put it out there up front, talk about what we're doing. So let's get started. So last week I was in Indiana, had a great time. I met some great people. I got to meet Stephen Ralph, the director of antipoverty initiatives at the Evansville Christian Life Center. They've got a great educational program that we're going to jump on board with and refer potential home buyers to that need some extra help with financial literacy and then also their credit. So I'm really excited about that.
So I'll share a little bit more about that. Met Two individuals that are fed up and ready to be homeowners, and the beautiful thing about it is they're ready to make that leap in themselves, in that change to where they can be able to make a difference in their own life and become a homeowner. They're not looking to rent, they're not looking to hang around, they're looking to be able to push forward. And they finally have hit a point in their life where they said, hey, guess what? I want to make a change and I'm here and it's refreshing
Affordable Housing Project Aims to Revitalize Jacobsville Neighborhood on 44 News
Our affordable housing collaboration officially launched in?Evansville, Indiana?with Mayor Lloyd Winnecke?and?Evansville Promise Zone. We are thrilled to have such amazing coverage by?44News?on how we are making an impact on families quality of life by owning a TruHome.
The Promise Zone and a company called TruVest are partnering to not only create affordable housing in Evansville but also create homeownership opportunities for the people living there.
Instead of knocking down homes, and building new ones, TruVest is renovating blighted homes in the Jacobsville neighborhood. At the same time, those who need affordable housing will have the opportunity to actually own homes instead of renting them.
This partnership will help provide first-time homeowners with the tools they need to keep their credit up, continue to pay mortgage payments and all the other things that go into owning a home.
TruVest co-founder Peter Bordes says, ?We?re going to find a balance between what we renovate, and then what we do helping the land bank taking those empty lots, and then developing new homes on them, but always with the idea that we?re not looking to gentrify neighborhoods, and we?re not looking to make the prices go up. We want to be able to keep them in line with the integrity of the neighborhoods.?
Mackenzee Pagett and her two children will be moving into this first house within the next few weeks. She tells 44News Evansville she?s very excited being a first-time homeowner.
Evansville Promise Zone Partnership Announcement
If you are available please join us on Monday, February 11th at 1:30 pm CST to announce our new affordable housing partnership. The Promise Zone has formed a partnership with TruVest to rehab 25 homes in the Promise Zone in 2019. They are working with local realtors, the Evansville Land Bank and the Promise Zone to locate houses suitable for rehab. People with credit scores of 600 or more will be eligible for mortgages through Old National Bank (other qualifications may apply). If a person does not qualify for a conventional mortgage, TruVest will provide financing based on each individual situation. The press announcement will be at 723 East Oregon Street. Hope to see you there?
How to Build a Mountain of Wealth Outside of the Stock Market-Part 2
Another week has come and gone and the Markets finished on a downward slide. I am sure some of you are experiencing some heartburn with your investments. Are you being proactive with moving your investments in and out of the Market, or are they tied up in your 401(k)? The one thing that I wanted to make sure for myself that I had full control of my investments as they are my retirement nest egg. In my last post I provided an overview of real estate note investing niche and the two types of investments that are available to you and me. In this post I want to discuss the ins and outs of performing notes.
A performing note A.K.A. is a mortgage that you or I can get from our local bank. Once your mortgage is funded by your lender or broker it either is serviced by that entity or it could be sold to another financial institution. Mortgages are sold in what is called the primary market. The major players in this market are banks, credit unions, and mortgage brokers. Now you are asking yourself where to do I come into play? You come into play in the secondary market. Before, I go into too much depth on the secondary market I want to give you an overview of Mortgage Backed Securities(MBS). Mortgage Backed Securities were created by President Lyndon Johnson when the Charter Act was passed in 1968. The original concept of MBS was to allow banks to sell off mortgages that would in turn allow them to free up funds to lend to other homeowners. The simplest MBS is called the pass-through participation certificate. This MBS pays the holder principal and interest payments that have been collected on the mortgage. This MBS is the most common you and I will invest in the secondary market. The creation of MBS also allowed non-bank institutions to enter into the mortgage business, and lenders were able to get their cash back in the secondary market instead of waiting for 15 to 30 years for the mortgage to mature. This brings us to the 2000s when the industry decided to become creative in offering complex MBS to entice new homeowners. We all know how this finished! I am not willing to rehash history, but if you want to read more about MBS here is a great website.
With all that out of the way lets talk about how you and I can invest in the secondary market. There are numerous ways to invest in the secondary market, but I am going to cover the three options I have experience with. First, purchasing directly from banks, lenders, hedge funds, and mortgage brokers. This choice is for a person that is looking to be a full-time investor, and he/she will have to build relationships with these financial institutions. Specifically as I have done in my career many times one has to "Dial for Dollars" to Asset Managers. These individuals control multi million dollar portfolios for their respected banks, and their job is to make sure these loans are sold and off the books before the end of the banks' fiscal year. The 2nd option is to purchase directly from private sellers. This option too has some full-time aspects as in you have to market your business to potential sellers in the form of phone calls, website presence, email marketing, and direct mail campaigns. A private seller is typically an individual/couple that has sold their home to a buyer on Contract/Owner Financing, which is another form of a MBS. Another nuance of contracts/owner financing transactions is that you need to ensure the loan was originated per Federal and State Laws. The biggest challenge I have experienced with these MBS is the contract violates State usury laws. When that is discovered the contract has to be re-written like a new loan. All terms stay the same except the interest rate on the loan is lowered and the home buyer will sign the new loan documents. The 3rd option is to be a private lender. Simply put you are the bank and you are lending funds to investors with an ROI expectation. This option by far is the easiest way to start investing in MBS.
There are endless investment vehicles that one can choose from, but there are not many investments that have a greater impact on society as a whole like MBS. When you invest in a contract/owner financing transaction you are providing financing to home buyers that otherwise would not be able to obtain a mortgage due to some credit challenges. In turn, you earn a healthy ROI and your investment is backed by real estate. I will leave you here for this post, and in my next post I will talk about non-performing notes (MBS), and how they too can be a great investment vehicle for your portfolio.
About the Author:
Ryan is an Executive Level Manager with over 20 years of progressive management experience in all aspects of; finance, compliance, divisional & product management, operations, advanced technology development, and real estate related investment opportunities. TruVest, infuses cutting-edge technology to identify non-performing assets that will generate multiple streams of revenue. Utilizing proven models and processes, TruVest consistently turns non-performing assets into performing, resulting in consistent solid returns.