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What’s Up With Housing?

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Quartz countertops, induction cooking, and single-level islands are among the design trends that have the potential.
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If the expectations about housing in 2019 can be summed up in one word, it’s this: balanced. After months and months on a runaway track, home prices have started to temper, and will continue to moderate in the upcoming year.
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The administration wants to eliminate professional appraisals on home sale transactions less than $400K.  Critics say the change could push the country back toward the see-no-evil days of mortgage lending that preceded the housing crash.
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Privacy, flexibility and accessibility need to be at the top of the list when planning a household for aging parents or adult children.
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The recklessness that accompanied the build-up in equity prior to the last crash does not exist today. That makes this housing market much more secure than the one we had heading into 2008.
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Naturally, after years of transforming beach homes into their best selves, Marnie Oursler has learned a lot about what works and what doesn’t—and what the next big thing in coastal design really is.
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Though ONE St. Petersburg is not yet finished, some buyers hope to flip their units for hefty profits as Tampa Bay’s luxury condo boom continues unabated.
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The Compound Effect: Building Your Household’s Wealth

 

Building Household Wealth

Wealth is within reach for many people; however, according to a recent study, 63 percent of Americans said it’s not likely they’ll become rich.1 While younger people are more likely to say they’ll achieve wealth one day, only 34 percent of people aged 30 to 49 and 21 percent of people aged 50 or older say the same. There is no secret to becoming rich: it takes time, sacrifice and good financial sense. Here are a few ways to build your household’s wealth.

Let Compound Interest Work for You

Compound interest is your interest earning interest. While the concept may work against you when you take out a loan to buy a car or use your credit card, it works in your favor when you’re saving money. For example, if your savings is growing at a rate of four percent, your investment will double in eight years and quadruple in 16 years. Your money will grow exponentially the longer you save: the more money you’ve saved, the more your money will grow.

Tap into Your Home Appreciation

Experts expect home prices to appreciate 3.24 percent and grow by 21.4 percent cumulatively.2 If a homeowner purchases a home this year for $250,000, they could earn more than $40,000 in equity over the next five years. Although the home value of the average American family’s home is $165,000, home values vary by market.3 If you’re curious about the value of your home, give us a call!

Build Equity in Your Home

One of the most compelling reasons to own a home is it allows you to build wealth over time. According to one study, the average homeowner has a net worth of $200,000, which is 31 to 46 times the net worth of the average renter.4 Saving for a down payment, especially if you plan to put down more than 20 percent, helps you adopt good financial habits. The more you put down when you buy, the higher your share of equity when you close. Although for the first five to seven years, the majority of your payment will go toward interest, over time more money will be applied to the principal. There are many tools online that calculate your current and future equity in your home, including this one here.

Build equity sooner by choosing a shorter amortization term. While your payment may be higher, you’ll likely qualify for a lower interest rate and will pay less interest over the life of the loan.

Build Equity Faster in Your Home

Mortgage Term 30 Years 15 Years
Loan amount $118,000 $118,00
Months to pay 360 180
Annual percentage rate 4.0% 3.0%
Monthly payment $563 $815
Total interest $84,806 $28,680
Interest savings $56,126

Source: Federal Reserve Bank of Dallas, Building Wealth: A Beginner’s Guide to Securing Your Financial Future

Pay Down Your Mortgage…or Not

Many homeowners grapple with whether or not to pay down their mortgage. On one hand, if you pay it down, or pay it off early, you’ll save money on interest, which you can use to make other investments. On the other hand, if your goal is to be debt free, it’s better to pay off your higher-interest debt, such as credit card debt, first before paying down your mortgage debt. Additionally, if you’re saving for retirement, putting extra cash toward your retirement accounts will help you build a nice nest egg to enjoy later on.

If you decide to pay off your mortgage sooner, here are a few ways to do so:

  1. Pay more money at the beginning of your amortization period and apply it to your principal.
  2. If you receive a tax refund or other windfall, apply it toward your principal.
  3. Make one extra payment each year. You’ll save money on interest and pay your loan off sooner.
  4. Add an extra $50, or another amount you can afford, to the principal of your payment each month.
  5. If you locked into a 30-year fixed loan, refinance to a shorter, 15-year fixed loan. Your payment may be higher, but you’ll pay it off sooner.

Your financial advisor can help you decide if paying off or paying down your mortgage is right for your goals.

Purchase Investment Property

Investment properties provide passive income to your growing financial portfolio. More than 25 percent of Americans say real estate is the best way to invest money you may not need for the next 10 years.5 While many people flip houses to make money—that is, they buy a home at a low price, fix it up and sell it quickly—others purchase multifamily properties to create monthly cash flow to save or to reinvest in other properties.

The longer you own a property, the better investment it becomes as you’ll continue to build equity. While rental costs rise with inflation, your mortgage will remain the same. The best part? Once you pay off the mortgage, your cash flow will increase. Remember to create a budget for maintenance each month, between 10 to 20 percent of the rent you receive, or more if the home is older. This will help you save more money in the long run and allow you to prepare for unexpected repairs.

There are tax benefits to owning investment property as well. You may be able to claim deductions for depreciation, as long as it fits within the guidelines; repairs, travel expenses, interest and more. If you’re thinking of purchasing investment property, talk to your tax professional to get the details.

Achieve More Wealth by Creating Financial Goals

Setting a goal will help you achieve your desired level of wealth. Once you achieve one goal, reassess and set the bar higher.

  1. What is your idea of wealth? Your idea of wealth will change as you earn more money. That’s why it’s vital to set goals along the way. What do you want your net worth to be in 5 years, in 10 years and in 20 years?
  1. Write down your short-term and long-term goals. Once you have determined your goals, write them down. This is the first step towards getting your desires out of your mind and into motion and it will be easier to refer to them later on.
  1. Develop a budget to help you reach these goals. A budget not only helps you understand where your money goes each month, it may also prevent you from overspending. That way you can have more money to save and invest.

 

Your Budget

Income
   Earned    $
   Investments + $
Total Income = $
Daily Expenses –       $
Monthly Bills –       $
Total Available for Investment =

To increase the amount you can invest, make adjustments to your daily spending and monthly bills, if possible. Look for opportunities to save money and transfer that savings into your accounts.

It’s never too late to begin building your family’s wealth. Whether you’re interested in buying a first home, upgrading to a larger home or are thinking of renovating, Title Security has your closing process covered. In the meantime, give a reputable Realtor a call and they’ll answer all of your real estate questions and offer suggestions to help you increase the value of your home.

Sources: 1. BankRate.com

  1. Pulsenomics, Home Price Expectation Survey Q4 2016
  2. Statistic Brain, August 1, 2016
  3. National Association of REALTORS, Economists’ Outlook, September 8, 2014
  4. The Motley Fool, July 30, 2016


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What’s Up With Housing This Week?

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Mortgage RejectionWhen it comes to mortgage rejections, Florida is No. 1
Almost 1 in 5 mortgage applications (17.1%) gets turned down in Fla., according a NerdWallet’s “Homebuyer Reality Report” that studied buyer experiences.

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Florida LegislatureFlorida Legislature 2017: Where do Realtors’ priorities stand?
The annual legislative race began this week, and Realtors will be impacted by a range of bills that will be discussed, debated and voted on over the next 60 days.

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Healthy BuildingsAn Interesting Look at the Future of Healthy Buildings.
The WELL Building Standard is the first building standard that focuses exclusively on the health and well-being of the people inside buildings, impacting the way occupants sleep, eat, and feel.

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Interior Design TrendsWhat Homeowners Want…
From statement kitchens to bold finishing touches, here are 8 trends today’s homeowners are looking for.
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Short SalesThousands of Tampa Bay residents gain equity in homes.
Will this prompt more people to put their properties up for sale, relieving the tight inventory that has been driving up bay area prices?

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http://www.TitleSecurityFL.com


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Recent Housing News

Where Are The Sellers?Where Have All the Sellers Gone? 6 reasons for low inventory.  Factors influencing the lack of homes on the market include homeowners who are still underwater on their mortgages and not enough new-home construction.

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Housing CrisisHas Housing’s Crisis Ended?  Supply of entry-level homes continues to plague the market.
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Home Equity PostHome equity surges by more than $1 trillion.  CoreLogic: American homeowners now have about $1.2 trillion dollars more than they had a year ago thanks to rising home values – double the amount since 2011.

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Mortgage Interest RatesMortgage Rates Continue Falling…  30-year drops to 3.83%; jumbo down to 3.76%.  At the current average 30-year fixed mortgage rate of 3.83 percent, the monthly payment for a $200,000 loan is $935.33.

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Millennials are showing signs of financial prudence.Millennials Saving More than Older Cohorts.  Only half of adults 30 and older save more than 5% of their income annually, but 3 in 5 millennials are doing so, according to a study… Millennials are showing signs of financial prudence.

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http://www.TitleSecurityFL.com

 


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Housing News: A Week In Review

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Retiree housing wealth: Battered but still significantRetiree housing wealth: Battered but still significant…  Many retirees will be able to tap their home equity for income.

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Nest Thermostat  New Data Shows the Nest Thermostat Can Cut Your Cooling Bill by 15%. Claiming an average savings of $131 to $145 per year.

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Sell Before SpringNo Matter What Punxsutawney Phil and His Buddies Say… You Should Sell Your Home Before Spring!

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Consumer Confidence Lifting Home SalesConsumer Confidence is Lifting Home Sales…
The housing market has been disappointing in the past year, with sales essentially flat. But there are signs that the market is starting to stir.

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Youthification vs. Gentrification... Changing NeighborhoodsIs Your Neighborhood Changing? It Might Be Youthification, Not Gentrification.

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http://www.TitleSecurity.net


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Housing News: Week In Review

Here are last week’s top  posts from our Facebook page to help keep you in the housing loop.  We invite you to visit and Like our Facebook page or press the button in the right margin. Hope you have a wonderful weekend.

NAR actionheader_2012Do No Harm to Housing

Remind Congress about our position on any proposed changes to the mortgage interest deduction

http://www.realtoractioncenter.com/realtor-party/act/calls-for-action.html

Do you know your rights when canceling PMI?Do you know your rights when canceling PMI?

Under certain circumstances, having sufficient home equity isn’t enough.

http://www.inman.com/buyers-sellers/columnists/bennyinmancom/know-your-rights-canceling-pmi

Condo LoansAre some lenders making your condo buyers with pristine credit feel like rejects?

Could be the building’s fault.

http://www.marketwatch.com/story/condo-loan-denied-blame-the-building-2012-12-07

Where Do You Think Home Prices Are Heading This Winter?The Experts Have Their Opinion… Where Do You Think Home Prices Are Heading This Winter?

http://bit.ly/XK1GOY

 

Break on mortgage forgiveness shaky…

http://www.tampabay.com/news/business/realestate/the-nations-housing-mortgage-forgiveness-tax-break-up-in-the-air/1264602

www.TitleSecurity.net