MILLENNIALS AND REAL ESTATE

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Recently on Inman News, there was an article that focused on millennials renting vs. purchasing a home. It discussed a book written in the 1960’s about investing in real estate. Although the nature of the book is outdated, the basic concept is, if you want to become a millionaire by the age of 65, all you have to do is buy $1 million worth of real estate in your thirties, with a 30 year mortgage and then pay the mortgages off over time.

Now a millennial will most likely look at that statement and think it is absurd. With that being said, that statement is a very basic summary of the book. There are numerous ways to apply this concept. Some may require a great deal of effort, such as flipping houses, and other ways involve high risk. But another way is to just stop renting.

To say “just stop renting”, can be a lot easier said than done. However, here are three helpful tips for Millennials on purchasing a home in 2015.

 

1. If you are waiting to purchase a home because you want to save a large amount of money for a down payment, the reality is; you don’t have to. The mortgage world is changing right now, for the better. Lender standards are regaining flexibility. Requirements for down payments are going down, in many cases, a down payment is only 3% of the sales price. In 2014, underwriting for self-employed borrowers was extremely strict, but now is moving back towards a reasonable standard.

If you were disqualified by a lender last month, does not mean you shouldn’t re-engage this month. It is a new year, a new market and new guidelines. Millennials shouldn’t assume that just because they can research qualifications online, that they have the ability to self-qualify – or worse, disqualify for a mortgage. Researching qualifications online is a great start, but it is still extremely important to meet in person with a mortgage professional.

 

2. Search for a home that meets your needs today , your projected needs for a decade. Everyone goes through similar life cycles; you live with your parents/guardians, and then at some point you move out. Once you leave, you have a set of needs for housing, such as proximity to work, nightlife, transportation…etc. But then if/when you start a family, your housing needs will change. Mid-forties are considered the peak earning years, and frequently this is followed by the last move-up in housing. Mid-fifties can bring on the empty-nester era and downsizing to a smaller home. And then when retirement rolls around, a second downsizing may occur, perhaps in a different location. So when you do decide to purchase a home, you should plan ahead accordingly.

 

3. A home is not an ATM; a home is a long-term investment. The issues that arose during the housing bubble were due to the increase in the pool of buyers, and the thought that the souring appreciation would never end; so many people pulled out their equity (cash-out refinance) and used it to purchase assets, like cars and other depreciating items.

If members of the millennial generation buy appropriate homes for a decade, pay mortgages on-time, don’t do a cash-out refinance, and move-up (or downsize), once they get to a certain age, they will own their own house mortgage-free. That is something no life-time renter will ever be able to say.

Millennials most likely have large student loans, probably don’t want to take on more debt, and view renting as a flexible way to move anytime/anywhere. But as a millennial, it might be time to change your perspective, and start thinking long-term about your life. If you buy sooner rather than later, you won’t look back ten years from now saying you made a bad decision when you got the 30-year fixed rate mortgage under four-percent.

 

If you are planning on moving or know of someone who is thinking about moving, then contact your local Homesale Agent for help. For more real estate information, please visit our Homesale website.

 

MILLENNIALS AND REAL ESTATE

Holiday Recovery

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AskHomesale.com provides real estate advise and information for home buyers, home sellers, and homeowners alike. Askhomesale.com is part of the Homesale Realty Family. The Homesale Family of Companies is the leading real estate company serving the Baltimore, Maryland, South Central and Southeastern PA real estate markets.  Homesale Realty has more than 25 offices with over 1,000 REALTORS®. Homesale Realty’s footprint includes Maryland real estate offices inBaltimore City, Federal Hill, Fells Point, Westminster, and Timonium.  Pennsylvania real estate offices include York, LancasterWyomissing, Chambersburg,Gettysburg,Harrisburg, and Schuylkill Haven.

Tips for Home Buyers  |  Tips for Home Sellers | Tips for Homeowners

Holiday Recovery

2015 REAL ESTATE PREDICTIONS

What does this year have in store for you? If you’ve been waiting to sell your home, 2015 might be the perfect opportunity! This year (2014), was the best year in the U.S. economic recovery since the 2008-2009 recession. With the economy accelerating; fueling jobs and income growth, the outlook on prospects for homeowners and would-be home buyers is positive.

2015 Houising Market

 

Mortgage Rates Will Head Back Up
An improving economy means that mortgage rates will unavoidably increase again. Freddie Mac, the now-government controlled corporation that buys and sells mortgage securities, conducts a weekly survey of mortgage rates being offered by lenders in the U.S. They also make various forecasts relating to the housing industry. Their long-term outlook calls for gradually rising rates over the next 12 months. They expect the average rate assigned to a 30-year loan to rise gradually, perhaps reaching or exceeding 5.0% by the end of next year.

Granted, this is only a real estate prediction for 2015 — not an assurance. But it is based on some of the best data available, analyzed by economists who specialize in mortgage and housing trends. So it probably won’t be far off. Think of it as a well-educated guess.

 

Mortgages Will Be Easier to Obtain
According to the Federal Reserve results of its July “Senior Loan Officer Survey on Bank Lending Practices,” mortgage lenders are relaxing their standards in several key areas.

To briefly explain, lenders are allowing lower credit scores and higher levels of debt, where mortgage borrowers are typically concerned. This trend is an industry-wide reaction to lower loan volume. Traditionally, when application volume goes down, lenders try to compensate by relaxing their standards and putting more loans into the pipeline. This happened in 2014, and it will likely continue into 2015 to some degree.

 

The Impact of Millennials
Some millennials, born between 1981 and 2000, are no longer living with their parents as they struggle to pay off student loan debt. Although the job market has been a challenge, employment is improving, and older millennials are planning for the future.

Millennials between the ages of 25-34, represent about 65% of first-time home buyers. This means that older millennials (young adults) are at an age when many are getting married and starting their own families. In the next 5 years, millennials are predicted to have a major impact on the growth of the housing market.

 

Closing Out the Foreclosure Crisis
It’s been seven years since the housing bubble burst and foreclosures skyrocketed, but in 2015 we’ll see the end of that era. Already this year has seen fewer foreclosures and short sales in the mix. With foreclosure inventories down more than 30%, it is predicted that there will be a slightly greater drop in foreclosure levels in 2015.

However, the situation will differ in every market, neighborhood and individual home, which is why most people prefer working with a Real Estate professional.

Information provided by: Homebuying Institute & Realtor.com

 

AskHomesale.com provides real estate advise and information for home buyers, home sellers, and homeowners alike. Askhomesale.com is part of the Homesale Realty Family. The Homesale Family of Companies is the leading real estate company serving the Baltimore, Maryland, South Central and Southeastern PA real estate markets.  Homesale Realty has more than 25 offices with over 1,000 REALTORS®. Homesale Realty’s footprint includes Maryland real estate offices in Baltimore City, Federal Hill, Fells Point, Westminster, and Timonium Pennsylvania real estate offices include York, LancasterWyomissing, Chambersburg, Gettysburg, Harrisburg, and Schuylkill Haven.

2015 REAL ESTATE PREDICTIONS

Safest Cities to Live in Maryland

The state of Maryland is many things – it is the wealthiest state in the country with the highest median household income; it is one of the smallest states in area, yet has a high population, giving it one of the highest population densities in the USA; and, Maryland has numerous nicknames including America in Miniature, Little America, and Old Line State. Is Maryland a good place to live if you’re looking for family-friendly neighborhoods with low crime levels? If you are considering moving to Maryland, here are 7 of the safest cities to live.

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1. Dayton
Dayton is what’s called an “unincorporated community” and it’s lessthan 30 miles west of Baltimore. Around 10,000 people live in Dayton, in Howard County, enjoying the small town feel and low crime levels. Dayton has a crime index of 96, and is the third safest community in Maryland.

 

2. Ijamsville
Named for its founder, Plummer Ijams, Ijamsville is a small community in Frederick County, about 7 miles southeast of the city of Frederick. Around 3,200 people live in Ijamsville and it’s the fourth safest town in Maryland. The crime index is 94.

 

3. Clarksville
The unincorporated community of Clarksville has some of the most expensive homes on the East Coast. Set in Howard County it is also famous as the home of top performing River Hill High School. The town has a population around 9,000 people and is the fifth safest town in Maryland. It has a crime index of 94.

 

4. Jarrettsville
Jarrettsville is a census-designated place in Harford County, home to around 2,900 people. It was named for the Jarrett family who farmed the land in the 1800s. Jarrettsville is about 30 miles north east of Baltimore and has a crime index of 93.

 

5. Fallston
Set in Harford County in the north of Maryland, Fallston is a census-designated place that’s home to around 9,000 people. It’s a semi-rural community only 20 miles outside of Baltimore, and it’s the seventh safest town in Maryland. The crime index is 92.

 

6. Myersville
Myersville is a small town set in Frederick County, about 11 miles northwest of the city of Frederick. Enjoying its status as the ninth safest town in Maryland are roughly 1,600 residents. Myersville has a crime index of 91.

 

7. Brentwood
Taking the last spot in our top seven safest cities in Maryland is Brentwood. This town is in Prince George’s County, just 1 mile from Washington DC. Obviously the crime problems in the nation’s capital haven’t seeped out to Brentwood yet! Home to around 3,100 people, Brentwood has a crime index of 91.

 

If you are planning on moving or know of someone who is thinking about moving, then contact your local Homesale Agent for help. For more real estate information, please visit our Homesale website.

 

 

Safest Cities to Live in Maryland

How Much House Can You Afford?

The typical homebuyer has been browsing through properties online, eagerly looking for yard signs, and attending open houses. However, before you even go house hunting, you should know how much you are able to spend on a mortgage. You don’t want to spend months looking at homes you think you can afford, when in realty you are out of your price range.

Follow these steps to get a basic idea of what monthly mortgage payment will work for you:

 

1. Allowable Monthly Debt Payments
As a general guideline, your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance, should not exceed 28 percent of your gross monthly income. Although the percentage does vary between lenders. Even if your debts are higher than 28% of your income, that doesn’t mean you can’t get a mortgage, there are financing programs that help make homeownership a reality for people from various financial backgrounds.

To calculate your housing expense ratio, multiply your annual salary by 0.28, then divide by 12 months.

$66,000   (salary before taxes and other expenses)
 X   0.28    (debt-to-income ratio)
= $18,480
$18,480 12 = $1,540
$1,540 Allowable Monthly Debt Payment

 

2. Total Monthly Debt Expenses

Add together your regular monthly debt payments: car payments, student loans, required minimum credit card payment, and any other expenses. 

$300 (Monthly Car payment)
+ $150 (Monthly Tuition Payment)
+  $90  (Car Insurance)
  $540  Total Monthly Debt Expenses

 

3. Maximum Mortgage Payment 

Subtract your monthly debt expenses from you allowable monthly debt payment in order to find your maximum mortgage payment.

$1,540  (Allowable Monthly Debt Payment)
 - $540  (Total Monthly Debt Expenses)
=  $1,000  Maximum Mortgage Payment 

Keep in mind that your maximum mortgage payment should include mortgage insurance, homeowner’s insurance, and property tax.

If you have questions or need more information, please don’t hesitate to contact one of our loan officers at Homesale Mortgage (PA) or Mortgage Master (MD).

 

How Much House Can You Afford?

Holiday Safety For Your Home

It is the season of joy and everyone is excited for holiday celebrations! While you are eager to decorate your home, you should take some precautions as you deck the halls and start a fire in the fireplace. Here are a few helpful tips on how to maintain safety in your home and still enjoy the holiday season.

 

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AskHomesale.com provides real estate advise and information for home buyers, home sellers, and homeowners alike. Askhomesale.com is part of the Homesale Realty Family. The Homesale Family of Companies is the leading real estate company serving the Baltimore, Maryland, South Central and Southeastern PA real estate markets.  Homesale Realty has more than 25 offices with over 1,000 REALTORS®. Homesale Realty’s footprint includes Maryland real estate offices in Baltimore City, Federal Hill, Fells Point, Westminster, and Timonium.  Pennsylvania real estate offices include York, LancasterWyomissing, Chambersburg, Gettysburg,Harrisburg, and Schuylkill Haven.

Tips for Home Buyers  |  Tips for Home Sellers | Tips for Homeowners

Holiday Safety For Your Home

Happy Thanksgiving

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From our Homesale family to yours, we hope you have a wonderful Thanksgiving! As you are gathering around the table with family and friends it is important to let them know what you are thankful for.  We would like to take this time to thank you, our customers, for allowing us to service all of your real estate needs!

 

May your Thanksgiving be filled with joy and tons of turkey! If you need any last minute Thanksgiving ideas, check out our Thanksgiving Pinterest Board!

 

For real estate information please visit our Homesale website!

 

 

 

 

 

Happy Thanksgiving