Felise Eber News

Updated: Thursday, June 24, 2021

Automated Underwriting Systems Explained

Automated underwriting systems, or AUS, have been around for a while now. For those not familiar with the term AUS, it might take a little explanation. Is it important to know? Well, maybe not critically so but for those who want to get some behind-the-scenes info on how mortgage loan applications are ultimately approved, this article will tell you how.

Underwriting is the activity that makes sure a submitted loan application meets all the guidelines for which the loan was submitted. Underwriting used to be a completely manual undertaking. Your loan officer would ask for pretty much everything an underwriter might ask for during the approval process. Its the underwriter that makes the final determination. When a loan is so deemed, the loan is then eligible for resale. Selling a mortgage frees up credit lines needed in order to continue making mortgage loans. Many times, the complete file would be inches thick by the time it made it to the underwriters desk.nbsp;

It could take a couple of weeks before a loan would be ready to transfer over to the underwriter. Tax returns, Pamp;L, paycheck stubs, bank statements, appraisals, title work and more would be stuffed into the final package. The underwriter would then take over to make sure the file compiled with secondary resale requirements. This entire process would take 30 days or even more due to the way loan files were submitted, processed and ultimately approved. It wasnt uncommon for a loan to take from 45-60 days before funds were finally >

Instead of packing a loan file with pretty much everything an underwriter might ask for, the process is basically reversed. The file is approved first and then documented later. This approval is reached by submitting the digitized loan application through an AUS. The findings or the results of a AUS submission arrive within moments, itemizing exactly what is needed. The loan processor and loan officer review these findings and then begin building the file. Nothing more and also nothing less.nbsp;

A loan file might only need the previous years W2 to verify income and employment. Or a full appraisal isnt needed but a drive by will suffice. A drive-by appraisal is exactly that. Instead of a full blown appraisal where the appraiser makes a full physical inspection of the home, going from room to room taking notes, the appraiser literally drives by the property and takes a picture.

Once the file has been documented it is then sent over to the underwriter at the mortgage company. The underwriter reviews the findings and makes sure that what the findings say and what was provided in the file match up. In this fashion, loan files were physically smaller. The AUS would only ask for the minimum amount of documentation needed. Less documentation means files that are much thinner compared to its ancestors. And the time it takes to get a loan from submission to final approval takes much less time.





What Does ‘Fully Amortized’ Mean?

Mortgage loans come in most shapes and sizes such as different interest rates, loan terms and others. One term you may have heard of is fully amortized. Its sort of a mouthful but its an important feature of most loans today. A fully amortized loan is one where the loan is eventually paid off at a predetermined period of time while making regular monthly payments. This is in contrast to so-called interest only loans or negative amortization loans. Neither of which is hard to find in todays lending environment.

That used to not be the case. In fact, there was a period not too long ago where interest only loans were all the rage. Negative amortization, or neg-am was also a financing option. How do those loans work? An interest only loan is fairly easy to figure out. An interest only loan is one where only the interest on the loan is paid each month. This of course results in the loan balance never being paid down unless the borrower makes an extra payment each month towards the loan balance.nbsp;

Because in the monthly payment where both principal and interest are paid, an interest only loan will logically have a lower monthly payment. The downside? Unless the borrower actively pays down the loan balance, not only will the original loan be untouched but when it comes time to sell the home, its possible the selling costs associated with the transaction mean the borrower has to come to the closing table with money instead of receiving proceeds from the sale.

A neg-am loan is a bit more complicated. A neg-am is opposite a fully amortized loan. Instead of the loan balance being paid down each month, it could actually grow. It amortizes in the opposite direction. If the borrower fails to make a fully indexed payment which includes both principal and interest, the unpaid portion gets added back to the loan amount. This means the loan balance would be higher than when originally issued. This takes an interest only loan to an enti>

Both of these two loan types contributed to the mortgage and housing collapse in the late 2000s. Loan balances grew instead of getting smaller. Borrowers who tried to flip a property using these loans soon discovered some programs were no longer available. Programs such as not having to provide verification of employment or so-called sub-prime loans designed for people with damaged credit. This contribution to the financial collapse caused the federal government to issue new guidelines. These guidelines required loans to be fully amortized. No more interest only or neg-am. There were and still are a few loan programs that offer interest only, but neg-am loans are no longer around. The introduction of the fully amortized feature provided a safer lending environment and contributed to the financial recovery in June of 2009.

When you first speak to your loan officer about a new mortgage, all the features of the available loan programs will be provided. But a stated or neg-am loans wont be one of them.





Peel-And-Stick Countertops and Other Band-Aid Fixes for Your Home

Band-Aid solutions" are considered quick fixes; They might not provide an ideal or permanent solution in the way that a kitchen renovation would but theyre designed to be done faster and be easier to accomplishand easier on the wallet.nbsp;

Whether youre getting ready for company and want your home to look its best without making a huge commitment or are looking to sell your home and want it to show nicely for small-dollars, there are a few ways to go.

Peel-and-stick wallpaper

Peel-and-stick wallpaper is great for trend-lovers who dont want to commit to a specific look for decadesor who fear having to take the dreaded permanent wall covering down someday.nbsp;Graphic patterns,nbsp;florals, evennbsp;faux wood grainnbsp;can create a focal point or transform a room.nbsp;

Peel-and-stick backsplash

Peel-and-stick works for backsplashes, too, and its not just for renters looking to add some >

Get the look ofnbsp;Carrera marble, make your kitchen look like its been draped in >

There are a number of other ways to dress up your backsplash without turning it into an expensive project.nbsp;The Sprucenbsp;has a rundown of several options including an eye-poppingnbsp;herringbone backsplashnbsp;that was created using a Sharpie oil-based paint marker and removable tile stickers.nbsp;

Floating floor

A floating floor, which is a floor that goes in over another floor, is a higher-maintenance endeavor than throwing some peel-and-stick materials up on the wall, but its still far easier to accomplish than most other flooring options. And, if you have some skill and the desire to DIY, you might be able to do it on your own, and really affordably.

The floating process was originally invented for laminate flooring, saidnbsp;Networx. In fact, a major reason why laminate floors have become so wildly popular is that theyre simple enough to install as a weekend warrior DIY project.

However, both natural hardwood and engineered wood floor planksnot to mention cork, ceramic tiles, and vinylare now also widely available in floating versions which the aspiring home handy person can easily assemble.

Peel-and-stick countertops

Heres something you may not have thought of: peel-and-stick countertops, which use a PVC vinyl base that can make your home look more updated at a fraction of the cost. While they might not be best for high-traffic areas because of their durability or lack thereof, these countertops can serve as a low-cost, temporary lipstick makeover in spaces that you either dont own, dont use often, or cant afford to rehabnbsp;just yet,nbsp;saidnbsp;HomeAdvisor.

Thisnbsp;faux countertopnbsp;from EZ FAUX DECOR looks like marble and claims to be heat and waterproof, scratch- and tear-resistant with a smooth surface that is environmentally safe, easy to remove with no sticky residue.





4 Ways to Save When Selling Your Home

Selling your home can be a thrilling and very lucrative experience. But for the first-time home seller, it can also be nerve-wracking and deflating.nbsp;

Thats because selling the largest investment of your life can be counterintuitively expensive. Getting your home ready to be scrutinized by strangers takes a lot of cash and elbow grease.

As the saying goes, it takes money to make money.

However, there are some easy ways to cut down on your front-end expenses to make your home sale more profitable. Lets look at five of the best.

Stage Your House Yourself

Professional home staging is expensive. The average cost of staging a home is just over 1,000, and renting furniture can add more. Thats the bad news. The good news is, you can do a lot of home staging yourself.

At base, the art of home staging is simply making a home as appealing as possible to prospective buyers; theres a reason that real estate agents say that people buy with their eyes. You want to show your home in the best possible light, and help buyers envision the potential of your living space. Thats easier for a trained, objective expert to do, but you can get a great result if you follow a few general rules.

If you hired a professional stager, theyd likely deep clean your home before they staged it, so start with that. Clean the floors, walls, windows, appliances and trim; if your home needs a lot of work, hiring a professional cleaning crew might be a good investment.

Next, consider that the key to a beautiful photo or film is the lighting. Remove all window coverings, like blinds or drapes, to admit natural light.nbsp;

Now consider your furniture. If its out-of-date or in poor condition, put it in storage or throw it out. Even if your furniture is up-to-date and in great condition, keep in mind that having too much furniture crammed into a space is just as bad as not having any at all. You want to have enough furniture in your home to make it warm and inviting, but keep enough open space so that prospective buyers can project their own tastes onto the home.

The less is more rule definitely applies here; above all, make sure your home doesnt look cluttered.

Pre-Sale Inspection

A pre-sale inspection can save you money and a lot of potential stress. If you wait until the buyers inspection to discover problems with the house, that could mean choosing between a price reduction, or paying for a list of repairs on the buyers timeline.nbsp;

The average cost of a pre-sale inspection is just over 300, and covers everything from the roof, foundation, plumbing, HVAC systems, the chimney and fireplace, and exterior features of the home like sidewalks.nbsp;

Discovering problems with your home ahead of time allows you to perform repairs at your own pace, shopping around for the best contractor rates, instead of having them done in a panic.nbsp;

Its also a great marketing advantage. Telling prospective buyers that your home has undergone a pre-sale inspection, followed by repairs and remediation, encourages them to bid with confidence.

Low Cost Repairs

Even if your home doesnt require any major repairs, freshening it up a little can pay huge benefits when it hits the market. And were not talking about a new roof or an in-ground pool; some of the most effective repairs are also some of the cheapest.

A Fresh Coat of Paint

A new paint job can make a home look warmer, cleaner, and brighter; its also a job that can be done in a weekend, for the cost of paint, some drop cloths, and a few rollers.

If you decide to paint the interior of your home before you put it on the market, choose your colors carefully. Though white may seem like the obvious choice, it can seem harsh and institutional, and shows dirt easily. Opt for a softer, off-white tone for more aesthetically pleasing walls.nbsp;

White does work for ceilings, though. Painting the ceiling a lighter color than the walls makes the ceilings seem higher, which makes the entire room seem larger. Just remember to invest in high-quality paint; the smoother, more uniform texture makes a big difference.

Clean Carpets

Carpets can take a beating in a busy, family home, and worn or stained carpets can make a hugely negative impression on prospective buyers. But a lot of staining, matting, and apparent wear can be cured by a thorough cleaning.

Even if your carpet still looks good, it might have a faint odor that youve become nose-blind to, so a deep cleaning is always a good idea.

The easiest way to thoroughly clean your carpets is to rent a steam cleaner. Make sure you follow the directions, and dont use too much cleaning solution, which can leave unsightly residue. Afterwards, opening windows and using fans can speed up the drying process.nbsp;

Fixing the Roof

A new roof isnt exactly low cost, considering it can be the single most expensive home repair of all, but if you do have roof problems, its better to deal with it before you put your home on the market, rather than let it become an issue down the road.

In 2017, the U.S. Census found that Americans spent an average of 6,800 to replace their roofs. Considering that 50 of that cost is labor, you could assume that the materials for replacing your roof cost about 3,400.nbsp;

If its a >

List with a Flat Rate Agent via Referral Network

One of the biggest single expenses of selling your home is the commission, which traditionally comes to 6 of the final sale price, split between the listing agent and the buyers agent. For the median American home valued at just under 230,000, that comes to about 13,800.nbsp;

Selling with a flat fee agent from a referral network ensures that youre working with a pre-vetted, top agent, unlike if you worked with an in-house agent from a discount brokerage, and gets you a full-service experience for a low, flat fee, instead of a big chunk of your profits. That can save you thousands of dollars in commission, and youll be sacrificing nothing on the service end.

nbsp;





HOA Meetings That Soar!

Celebrate Your Success.

The annual meeting should be a chance to celebrate successes, hand out recognitions, join members in a common cause and become better acquainted with each other. Use this venue to launch new initiatives or announce good news like awards.

Invest in Success.

If your annual meeting budget is bare bones, only those with a bone to pick show up. Since the event only happens once a year, splurge a bit. To pull this off properly, some money should be invested. If you dont have a clubhouse large enough to accommodate all the members, obtain the best and closest alternative. Local libraries, churches and community centers often have large meeting rooms that are reasonably priced or free. And if the budget permits, reserve a room at a banquet facility.

Cast Your Bread Upon the Water.

While the business of the meeting might be a bit dry, the wrappings do not need to be. Offer food, beverages, door prizes, comfortable seating and a good sound system if its a large room. If the budget is modest, host a potluck and award prizes for the best entree, salad and dessert.

Lay Out the Welcome Mat.

Make the attendees feel welcome and comfortable. Make sure there is adequate heat or air conditioning. Plan periodic breaks if the meeting is long. It will allow the participants to socialize and refresh their perspective on the business at hand.

Let Them Eat Cake.

Serve food and beverages following the meeting so there is a reason to conclude the business meeting and to encourage attendees to stick around. This is a positive way to end the meeting and leave a good taste in their mouths literally.

Draw for a Prize.

Make returning proxies and attending the meeting fun by including a drawing for, say, a Dinner for Two certificate. Add the names of those that return proxies and also those that actually attend the meeting. That way, those that return their proxy get two chances to win if they show up. Either way, youve encouraged members to help satisfy quorum requirements.

Pump it Up.

Cast your annual meeting as the do-not-miss event of the year serves several purposes. You get business done with more members participating and they get to know each other better.

While the business of meetings can be rather somber, the tone need not be. Use these suggestions to at the wings it needs to soar





How Long Should A House Stay on the Market?

When you put your house on the market, you obviously want it to sell as fast as possible. Thats not always what happens, though. In 2020, homes spent an average of 25 days on the market, which was down from 30 days. Compare that to 2010, when the average number of days to sell a home was a whopping 140.

Its a sellers market right now, especially since inventory is low and building materials are incredibly expensive.

While the time on the market has, on average, gone down, there are a lot of individual factors that play a role in how long it takes to sell a house.

For example, demand, seasonality, and local market factors all play a role. So how long is too long, and why does it matter?

The DOM Metric

DOM stands for days on the market, and its a >

The more those days tick upward, the staler your listing gets.

The Effects of a Home Being On the Market for Too Long

If your home stays on the market too long without being sold, there can be serious consequences. First, a buyer will know that, and theyre undoubtedly going to use it as a negotiating tool. That means you may have to sell your house for significantly lower than you intended.

When your home seems like its a good property, but it stays on the market for too long, especially in a hot market, buyers are also going to start to worry theres something wrong with it.

Inevitably a home generates the most interest when its fresh on the market. Thats when youre going to see a buzz and sense of activity that will include more showings and phone calls. Then, over time interest will decline.

Once all the buyers who are currently looking have seen your home, youre going to have to wait for new buyers to enter the market.

How Long Is Too Long?

You have to look at local conditions in your market to figure how long is too long, but right now, if youre in a pretty popular area, if your home has been on the market for more than a couple of months, it might be time to rethink things.

If you arent sure, talk to your agent about the average time other homes in your neighborhood are staying on the market. You dont want to reduce your price too soon, which is why its key to have a good idea of whats happening with houses around yours.

Should You >

A common way to drum up interest in a home thats been listed for a while is to lower the price.

Another option is to take it off the market and then >

>

Better than trying to work against the market is getting your pricing right before you list your home the first time, which is why you need an experienced realtor. You also need to listen to their advice on things like staging and preparing your home to go on the market, because otherwise, a couple of months out you may find your home isnt seeing much action, and youll have to do these things anyway.





Part 2: Questions Protect You...Keep Asking!

[Part 1: Suddenly Construction Looms posted May 4 ]

The renovation or new-build project next door can leave you with all the headaches of construction without any of the benefits.

The owner of the neighboring property will probably move out and rent in quiet comfort until construction is over.

Construction noise will be your new alarm clock. Noise and vibrations will disrupt your daily life and may even continue into the evening or over the weekend, depending on local noise and construction bylaws and how rigorously they are enforced.

Wood and concrete dust will settle over and in everything you own. Hours of cleaning and vacuuming will keep you busy.

Deliberate or accidental damage to your property may be a continual and expensive aggravation depending on local bylaws and how rigorously they are enforced.

The owner may me>

Ask a lot of questions before work begins and problems start. Getting accurate answers is the best way to save yourself trouble in the long run.

Conversations with local zoning and building departments, as well as your local elected representative, will help you understand your rights as well as gaps in how thoroughly your property is protected. Knowledge is power here, so expect to invest time learning as much as you can before building begins.

Take notes and collect phone numbers and email addresses so you know who to contact for help, especially in an emergency. Meet as many of the players in advance so your calls and emails will be answered quickly. Concisely document your concerns with respect to each department involved and ask for your letter to be added to the file to alert inspectors. This helps your concerns receive the attention they require, but expect to follow up by phone or in-person to be sure.

Asserting your rights and protecting your home are not unfriendly or unneighborly actions. If the owner leans on your friendship as a reason to let them have their way at great cost to you, be very wary of them. Self-interest is more powerful than friendship to most people.

Speak up pleasantly and firmly to learn what the owner, contractor, and designer have planned so you can head-off anything that can turn into a negative for you and your property. Dont be shy about being firm if they dodge questions. After the fact is too late.nbsp;

What Could Possibly Go Wrong?

As an adjacent property owner, you have a lot to lose including sanity, and your peace of mind. Resulting disadvantage or damage to your property could undermine its value. If you work from home, the noise and disruption may impact your income.

A written construction or encroachment agreement is recommended before permits are granted or work begins. This agreement or contract will make taking the owner and/or contractor to court more effective if that becomes necessary. Keep in mind this document says exactly what it says, not what you hoped it would say or meant it to say. Consulting a lawyer who is recommended for successfully representing clients in situations like yours may be advisable.nbsp;

The sample questions below can help you understand the depth and breadth of issues that may arise, but they do not represent a comprehensive list. There may be significant concerns >

Here are the types of questions you will benefit from having the owner, designer, and contractor answer accurately before construction begins. Keep written or audio proof of their exact answers. Beware of assumptionstheirs and yours

1. Scheduling amp; Protection

a Who will be in charge on-site every day? What hours will they be there?nbsp;

What time will construction begin and end each day? Will work continue on weekends?

How often will the contractor and designer visit and how can they be reached in emergencies?

b What is the overall construction sequence or schedule and when will the project be complete? May I have a copy of the construction schedule?nbsp;

c During demolition and throughout construction, how will my garden, trees, decks, roof, chimney, satellite dish, driveway, and any other >

How will my windows, walls inside and out, foundations, fixtures, and chattel be protected during construction?nbsp;

If something is damaged on my property, like a fence, window, or retaining wall, how quickly will it be repaired or replaced at the owners or contractors expense?

d When will demolition begin and what will that involve?

What measures will be taken to protect my home and its foundations, walls, and windows from damage, dust, and debris during demolition?

What heavy equipment will be used and how experienced are the operators?

e How will the owner and the contractor ensure workers, equipment, and material stay on the owners land and do not trespass across the property line?

f What insurance do the homeowner and the contractor carry and how does the insurance cover damage to my property?

How does my property insurance protect me?

2. Construction amp; Excavation

a If some or all of the adjacent exterior walls remain intact, how will they be braced so they dont fall across the property line?

b How will the excavator know exactly where to dig >

c Who decides if shoring or protecting supports are necessary? If required, what type of shoring will be used, who will install it, and who pays for this? Will all of this equipment be on the owners land?

d What is the plan to ensure there is no movement of my building or the soil at the foundation wall, footings, and weeping system?nbsp;

How deep is the excavation? At what depth will the footings be poured? Will excavation go below my footings and foundation?nbsp;

What and who guarantees that all the work can all be done safely and there will be no long-term negative impact on my property?

e How will my foundation, walls, weeping tiles or drainage system, and interior be protected from water drainage during excavation and the construction project? What is your plan if my building is compromised by flooding or in any other way and how quickly can and will you act?

f How many discharge and exhaust vents will be along our shared property line?nbsp;

Where will the sump pump discharge water? What fumes will come out of the furnace, fireplace, and other vents and how will those fumes be directed away from my windows and doors?nbsp;

Where will gutters discharge and what will prevent water draining onto my property or into my home?nbsp;

If exterior hard surfaces like artificial grass are installed, how will drainage be kept on the owners property and not run onto mine?

g Is there any reason why heavy equipment or workers could or would travel along or over the property line? Will our written access or encroachment agreement include specific times and limitations for clearly-defined work taking place on my property?

The closer your two buildings are to each other, the greater the potential for long-term or permanent problems and aggravation for you.nbsp;

Think ahead. You will be the only one committed to doing that for your property

More on protecting your real estate in Part 1: Suddenly Construction Looms





How Are Soaring Materials Cost Affecting Real Estate?

There are some factors converging in the real estate market right now that are putting home prices at an all-time high. In fact, home prices are so high and bidding wars so common that a lot of buyers are waiting for things to settle down a bit, although we dont know when thats going to happen.

So whats behind the increasing home prices around the country?

Theres limited supply and increased demand, coupled with extremely high costs for building materials. Thats putting a limit on what new home builders can do right now, and a lot of current homeowners arent willing to sell.

Home Price Inflation

Home price inflation peaked last year at 11.4, and the estimates for anticipated average price growth were recently revised upward to 8.1 in 2021 and 5 in 2022. By 2023, price growth is expected to reach 4. Thats below the 20-year average but still is moving faster than other measures of inflation.

That does mean there will be a slowdown at some level as far as home price inflation based on analyst expectations, but not all that much.

The Price of Lumber

One of the big issues affecting the availability of new homes and the real estate market is how expensive products like lumber are, as well as being hard to find. There was a lumber shortage triggered by the pandemic. According to the National Association of Home Builders, lumber prices have gone up more than 200 since April 2020.

The price per thousand board feet went up past 1,100 in April, while it was less than 500 in June 2020.

Experts in the lumber industry dont know when the prices might come down. For example, representatives from Capital Economics recently said they think lumber prices will fall over the next 18 months. The demand for lumber should hold for a while, but the supply should, according to their analysis, go up, and prices should go down by the end of 2022.

The reasons they believe this could be the trend include increased domestic production of lumber and fewer quarantine measures. There could also be more truck drivers because of increased hiring and wages, which would help take care of some of the logistical issues affecting lumber.

How Lumber is Adding to Home Prices

The rise in lumber prices has now added almost 36,000 to the price of the average single-family home. Its added nearly 13,000 to the market value of a new construction multi-family home.

Lumber isnt just used in the framing of a home. Its also used to make doors, flooring, windows, and cabinets, meaning that the shortage and high prices affect almost every aspect of home construction and, by extension, the real estate market.

Some home builders have to slow production because of the high costs of materials, but at the same time, they also want to keep up with demand.

Along with lumber, the price of gypsum is up almost 7 from last year, which is drywall.

Steel prices are up 18 year-over-year, which is used for beams and wiring. Copper is up 27, which is used for wiring.

Then, theres the price of land.

To buy a single lot is 11 higher this year compared to last. New lot supply has gone down 20 from last year. Theres a huge land grab as builders are trying to keep up with demand.

What all of this meansnbsp; is that buyers are going to continue to see extraordinarily high prices for at least the foreseeable future unless theres a major shift.





May Real Estate Roundup

Freddie Macs results of its Primary Mortgage Market Survey shows that "Mortgage rates are down below three percent, continuing to offer many homeowners the potential to refinance and increase their monthly cash flow. In fact, homeowners who refinanced their 30-year fixed-rate mortgage in 2020 saved more than 2,800 dollars annually. Substantial opportunity continues to exist today, as nearly 2 trillion in conforming mortgages have the ability to refinance and reduce their interest rate by at least half a percentage point"

30-year fixed-rate mortgage FRM averaged 2.97 percent with an average 0.7 points for the week ending May 27, 2021, down from last month when it averaged 2.97 percent. A year ago, at this time, the 30-year FRM averaged 3.15 percent.

15-year FRM this week averaged 2.27 percent with an average 0.6 points, down from last month when it averaged 2.29 percent. A year ago, at this time, the 15-year FRM averaged 2.62 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage ARM averaged 2.59 percent this week with an average 0.2 points, down from last month when it averaged 2.83 percent. A year ago, at this time, the 5-year ARM averaged 3.13 percent.





Single Homeownership Is at Record Levels. Is It for You?

According to the National Association of Realtors, single individuals made up 25 of home sales in 2019. A whopping 17 of that 25 was single female buyers, many of them older. However, new data shows that single homebuying may be an even more substantial number.

The share of U.S. homeowners who are single hit a record 38.4 in 2018, the latest data available, according to annbsp;analysisnbsp;of Census Bureau data bynbsp;Haus, said USA Today. The trend largely reflects rapid growth in the portion of Americans who are single. It also highlights an improving economy and job marketnbsp;and the willingness of buyers to set up households in untraditional ways to overcome sharply rising housing costs.

Filter the single homebuying trend down to millennials and the number is even more eye-popping. At a time when a lot of young adults are postponing marriage, the number of Americans buying a house on a single income is substantial, said Investopedia. Ellie Mae says that as many as 47 of millennialnbsp;homebuyers last year were unmarried.

If youre considering buying while single, here are a few things to think about.

How much can you really afford?

Those who dont even consider the possibility of buying a house as a single person may be waiting because they want to be more settled in their life firstmarried, starting a family, in a job with a solid trajectory, etc. But many people may also think they need more money set aside for a down payment or more income to support a monthly mortgage payment than they actually do.nbsp;

According to NerdWallet, Most lenders require that youll spend less than 28 of your pretaxnbsp;incomenbsp;onnbsp;housingnbsp;and 36 on total debt payments. If you spend 25 of yournbsp;incomenbsp;onnbsp;housingnbsp;and 40 on total debt payments, theyll consider the higher number and the amount younbsp;cannbsp;qualify fornbsp;willnbsp;be lower as a result.nbsp;

When you break down those numbers, it may be that youre already at or above that percentage with rentespecially if youre in a market where its escalating quickly. This new report from Apartment List shows that rent is up 1.7 over last year. This is a modest increase and rent growth is lagging behind the growth in average hourly earnings, they said. However, when renters are paying top dollar for a place that isnt even theirs, and that will likely continue to become more expensive, it creates instability while excluding them from the advantage of equity growth.

Are you prepared for an emergency?

According to experts, qualifying for a mortgage as a single person shouldnt be any more difficult than it would be if you were married, as long as you have the credit, income, and employment history necessary to get approved for your loan. The main challenge of homeownership on a single income is the potential of job loss or some other financial hardship that could put your home at risk. On two incomes, it might be easier to absorb a financial hit. This makes a substantial emergency fund even more crucial.

While the size of your emergency fund will vary depending on your life>

Look to your friends

Just because youre single doesnt mean you have to live aloneor even buy alone. Many singles team up with partners or friends, said USA Today. Unmarried couples made up 9 of home purchases last year, up from 8 in 2018, according to an NAR survey. Other arrangements, such as roommates, comprised 3 of purchases in 2019, up from 2. In some cases, both occupants own the home. In others, one owns while the other pays rent or contributes to household expenses.





What Should You Know About IKEA Kitchens?

Kitchen remodels are a popular but pricey project for many homeowners. With people spending more time at home right now because of COVID-19, undoubtedly, many are considering remodels.

To save money on kitchen projects, some homeowners go the IKEA kitchen route.

You can ultimately save thousands or even tens of thousands of dollars, but is it worth it? Thats a decision thats up to the individual, but there are certain things to know about an IKEA kitchen.

Designing an IKEA Kitchen

One of the big challenges with the IKEA kitchen is the initial design process. You can go to a store location and have someone help you with the design. If you live near an IKEA, that can simplify things, and you avoid the potential of your mistakes derailing your project.

Not everyone lives near an IKEA, however. You may be planning to get your kitchen shipped.

If so, there is an online planning tool available.

The concept of an IKEA kitchen is similar to their furniture. Along with being budget-friendly, things are packed and shipped in a way thats ready to put together. You may be able to do it on your own, without a contractor.

As you start planning and using the design planner, one of the most important things to remember is to measure, measure, and measure again.

You need to account for things like outlets, window openings, and door swings.

Once you have measurements, you can start thinking about your kitchen zones, which just means where youll put everything and how it will flow.

Are the Cabinets High-Quality?

Cabinets, particularly if you go the custom route, are incredibly expensive. IKEA cabinets are significantly less expensive.

The thing about IKEA cabinets is that they are made from particleboard and then covered in laminate. Some people do prefer solid wood. Again, thats a personal decision.

Since the cabinets from IKEA dont come in custom sizes, if you have an odd space or something doesnt work out just right, you might have to use a filler piece.

The 3D planner tool again is a critical component of planning your kitchen. Its somewhat like a puzzle.

You can add features like internal organizers to your cabinets, and there are available features like drawer dampeners that give you a soft close.

There are base cabinets, which are your lower cabinets under the counter. Theyre available in two depths, and the standard depth is 24 inches.

Then, wall cabinets go above the countertops. Most wall cabinets are 15 inches, which is a standard depth.

If you want additional storage, which is somewhat like a free-standing pantry, there are tall cabinets. They sit on the floor and are available in two heights80 or 90 inches.

You can decide between exposed legs and toe kicks for your base cabinets.

What About the Countertop?

IKEA does have countertops, but you might want to go elsewhere even if you get your cabinets from there.

The countertop options are either laminate or veneer.

Putting it Together

Again, all of the different pieces and components of your IKEA kitchen wont be assembled when they arrive. You can put them together yourself or hire a contractor. You should have your kitchen delivered instead of picking it up, and you may find that if you have a larger kitchen, you have more than 100 boxes.

Putting everything together and installing the components correctly plays a big role in the durability and quality of your IKEA kitchen. If youre unsure of your skills, you should think about having someone help you.

Finally, if you have an odd-shaped kitchen or layout and you dont plan on changing it, you could be limited in your options for an IKEA kitchen. This is simply because IKEA kitchens are modular and theres not a lot of room for customization. A straight-line kitchen is a best-case scenario if youre going with IKEA.

Whether or not an IKEA kitchen is worth the cost savings depends on your preferences, the layout of your kitchen, how handy you are, and what your budget is.





Why Are Payments Higher When You Shorten the Term?

Many financial advisors recommend taking out a shorter term loan. Why? Because over the life of the loan, less interest is paid to the mortgage company. That makes sense. Less interest is always good, right? But with a shorter term loan, theres a tradeoff. The shorter the term, the higher the monthly payments. Why is that, exactly?

Monthly mortgage payments have three basic components. The first is the actual loan amount. The second is the interest rate on the loan. The third is how long the loan is actually amortized over. Amortization simply means how the loan is paid down and when. Most mortgage loan terms in todays mortgage marketplace are the traditional 30-year fixed. When you see interest rate advertisements, its usually the 30 year term thats being promoted. The second most popular is the 15 year term. Other terms fall into the 20 and 25 year category. A 10 year note is also available. There are also programs that can customize a loan term based upon how many years remain when analyzing a refinance.

Lets now compare monthly payments for a loan amount of 300,000 and an interest rate of 3.00. The traditional 30 year yields a monthly payment of 1,264. The shorter 15 year term comes out to 2,071 per month. 20 and 25 year terms provide a monthly payment of 1,663 and 1,422 respectively. Notice how even though the loan amount and interest rate are the same under each scenario, the monthly payments are different. This is due to the term of the loan. If someone is paying off a loan with a shorter term, the result is a higher monthly payment.nbsp;

Think for example taking out a mortgage with a two year term. The monthly payments would have to be high enough to pay off that mortgage in 24 months. The shorter the term, the higher the monthly payments must be. At the same time, you can also see that a shorter term loan would also result in less interest paid over the life of the loan.

Which brings up another pointwhich term is best? There really is no definite answer but instead depends upon what the borrower wants. Yes, paying less interest over the life of the loan is a good thing but youll notice the difference between a 30 year and 15 year term using the same example is 807. Thats a lot but for some the monthly payment for the 15 year term is too much. So much so that the borrowers can no longer qualify due to the higher payment. Thats where a 20 or 25 year term can be a good choice. The best loan term is the shortest loan term the borrowers can comfortably afford each month.nbsp;

Thats why when speaking with your loan officer about your financing options, ask about other loan terms besides the more popular 30 and 15 year terms. In this way, your choices are customized to your requirements.





Housing Counsel: Who's Responsible for Areas Outside Your Condo Unit

Question: What responsibility does a unit owner in a high-rise condominium have with respect to external doors, windows, balcony railings, or roof decks? Does a unit owner have any direct responsibility for other than the internal space and contents of his or her unit?

Answer: The answer to your question should be found in your legal documents. In a condominium, there are three basic legal instruments: the Declaration, the bylaws and any rules and regulations.

The Declaration is, in effect, a deed which establishes and defines the condominium and which recites the manner in which the Declarant also called the "Developer" desires to submit the property to a condominium regime. The Declaration describes such matters as the boundaries of the units, the items and areas that will comprise the common elements, including limited common elements, if any, and a determination of the unit owners percentage interest in the common elements.

Your Bylaws are the Bible as to the day to day operation of your Condominium Association. The Bylaws provide for meetings and voting, the manner in which the condominium budget should be prepared, the determination and handling of assessments including special assessments, the filing of assessment liens, the nature of insurance coverage and restrictions on the use of the units and the common elements.

The Bylaws also provide that the Board of Directors of the Association has the power to establish rules and regulations governing the use of the condominium.

Boards of Directors usually will adopt rules and regulations which cover matters which either are not contained in the Bylaws such as how and where to store bicycles, or which need further amplification. For example, the Bylaws may allow pets. The Board can enact a rule spelling out the rights and responsibilities of pet owners.

Condominiums have three components. Lets look at them separately:

nbsp;

  • Units: This is your space; this is where you live; you own it. In order to determine what is your space, you have to read your Declaration. Additionally, the units will be shown on the condominium Plat and Plans.

    nbsp;

  • Limited Common Elements: referred to as "LCE" This is a common element and is reserved exclusively for use by one or more, but less than all, of the unit owners in the condominium. Limited Common Elements may include balconies, roof decks, storage areas and parking spaces. The Declaration will define Limited Common Elements and the Plats should show where in the complex they are located.

    nbsp;

  • General common elements: This >

nbsp;

Thus, you first need to determine whether the items you are questioning are part of the unit, a limited or a general common element. Your Declaration and your Plats and Plans should provide the answer.

In general, the maintenance responsibility for common elements -- including LCEs -- rests with the Association through its Board of Directors. While you have the right to use your patio, for example, you do not have the right to make any structural changes to it. If that balcony is in need of repair, only the Board of Directors has the authority to hire contractors. However, in some associations, the Board has the right to pass the cost of repairs on to the owner or owners who have exclusive right to the use of that LCE.

The answer to your question can be found in your legal documents, and specifically in the Declaration and the Plats and Plans. Every unit owner should have a complete set of the legal documents for his/her association, and should periodically review those documents. If you do not have a complete set of these documents, ask your property manager for a copy.

Your condominium unit is your investment, and you should understand your legal obligations.

But I want to toss your question back to you: what do you mean by "responsibility"?

As an owner in your association, you -- along with all other owners -- have certain basic responsibilities. You have to abide by the associations governing documents, whether or not you like them. If your balcony or patio is a limited common element which I suspect it is, or if the windows are common elements, you do not have the right to make any changes, modifications or improvements. You cannot damage, destroy or even alter common property.

You do have the right to lobby your Board of Directors to make the necessary or cosmetic changes, but that is a decision which rests solely with your Board. If you do not like their decision, you have only three choices: try to get elected to the Board, put up with the situation or move out.





Saving for a Down Payment When You Live Paycheck-to-Paycheck

A down payment is an important component of taking a step toward homeownership. Saving for a down payment is also the biggest obstacle that you probably face when you want to buy a home.

A down payment is the cash you pay upfront when youre going to make a large purchase. If you were going to buy a 350,000 home with a 10 down payment, youd need to have 35,000 in cash.

Then, your mortgage lender provides the rest of the money to buy the home, and you pay your lender back over time. There are a few exceptions to lenders requiring a down payment, such as VA loans, but generally, it is required.

Its recommended that you put at least 20 down if youre going to buy a house, but that can be a lot of money.

How do you save if youre living paycheck-to-paycheck? It is possible, but you also might have to make some changes.

Take the First Step

Even though you might feel overwhelmed about the prospect of saving money when youre ba>

One good first step is to open a savings account where youll deposit money thats specifically meant to go toward your down payment.

You might want a savings account that pays a bit of interest as well.

Create a Budget

You may be in a cycle of living paycheck-to-paycheck that you dont necessarily have to be in.

If you can drill down into whats going out versus whats coming in, you might find that there are some ways you can save money even on your current income.

Really taking an honest look at your income versus your spending can be challenging and overwhelming because you may not realize how much youre spending on things that you dont need to be. Doing it is rewarding and valuable, though.

When you create a budget, include in it money that youre going to set aside every week or month that will go toward your down payment.

Even small contributions do add up over time if youre consistent and patient.

If youre not sure where to start with your budget, a lot of financial professionals recommend following whats called the 50/30/20 rule. This means that 50 of your income goes toward your essentials, such as your rent. Thirty percent goes toward life>

Cut Out Subscriptions

One of the best things you can do for your finances is to regularly evaluate what subscription fees youre paying and cut them out. It sounds simple, but the reality is if youre like the average American, you might be spending 237 a month on subscriptions. Thats a lot of money that could go elsewhere.

Go Over Every Bill Carefully

When youre working with a >

There are a few reasons for this.

First, you want to make sure there arent mistakes youre paying for. You might also find ways to pay less. For example, you could ask for a lower rate on your credit cards if you have a history of on-time payments, or you might be able to talk to your car insurance company about good driver discounts.

There are a lot of opportunities to save money on your bills, if you know where to look at youre willing to ask.

Add Income

Finally, once your budget is in order, its a good idea to add extra income to your life. There are so many ways to do this. When youre not working your full-time job, maybe you deliver groceries or work for a rideshare service.

It doesnt matter what it is, but when you add another stream of income, it puts you that much closer to your down payment.

Everything you earn from your secondary income source should go directly into your down payment savings account, so you arent tempted to use it on anything else.





Top 5 Plumbing Expenses Homeowners Face

When talking about something as extensive and complex as your homes plumbing system, its inevitable that there are going to be problems cropping up from time to time.

Its not a matter of if, but a matter of when

But that doesnt mean every situation that arises requires the expertise of a professional plumber. Some do, of course, but there are plenty of issues that homeowners can tackle on their own.

Many of these things should be addressed sooner rather than later, however. Because the longer they go unchecked, the greater the chance the problem is going to increase to the point where youll need to call on the services of someone much more adept at dealing with plumbing issues.

So its really best to develop some sort of plumbing maintenance schedule and stick to it. For example, perform a maintenance check on the first of every month and make sure that everything is working as intended.

If small repairs are needed, try doing them yourself to save money. But if you do need to call a professional, dont be afraid to do so.

Some of the more common plumbing expenses homeowners face include:

Dripping or Faulty Faucets

Besides the fact that a dripping faucet can drive you to the brink of insanity, it will also cause your water bill to go up. And who wants to see their hard-earned money going down the drain, right? This is by far one of the most common plumbing problemsnbsp;homeowners face.nbsp;

The good news is that most of the time, this kind of repair can be handled without calling on a professional plumber. In fact, its one of the more popular Do It Yourself DIY projects in the country, at least as it >

Its probably nothing more than a stiff, torn or dislodged washer thats allowing a tiny flow of water through and creating that annoying drip.

But youll want to take care of this as soon as you can as, like most issues, it can become worse over time if not addressed on a timely basis. If the leak has gone on long enough, other parts may become worn or corroded and youll need to call in a professional.

Low Water Pressure

If youre once healthy water pressure has been reduced and youre not getting the amount of water youd like out of your pipes, this could be a small issue or it could be something much more complex.

A common cause of low water pressure is a buildup of deposits or sediment, as the water coming through your pipes carries dissolved materials that can attach to metal surfaces.

One home remedy to this situation, at least for the shower, is to attach a plastic bag filled with vinegar to the showerhead overnight and see if that clears away the buildup.

If you still notice low water pressure after trying that, then you could have a more complex issue such as a leak or a breach in the pipes leading into your home.

If this is the case, it could be damaging your homes foundation so youll want to call in a professional right away to have a look.

Running Toilets

If your toilet wont stop after flushing, it might be time to replace the inner workings of it. You may be able to do this on your own, but it could also be a bigger issue at play that youll need professional help with.

You can try buying a toilet repair kit from your favorite hardware store to see if that solves the issue. But it could also be a larger issue like sediment buildup or issues with the pipes leading into the toilet.

Leaky Pipes

Annoying leaks can range from a minor inconvenience to a costly nuisance, so its best to stay on top of these types of issues during your monthly maintenance checks.

Leaks usually happen at joints, which can be temporarily fixed by using joint fillers. But for a more permanent solution, you may need to replace a length of pipe or its fittings.

Replacing pipes under your sink can be a messy undertaking, so you should consider calling in a professional to do the job.

Clogged Drains

If water is draining slowly in your sinks, tubs or toilets, or not at all, youll want to address this as soon as you can. You can do this either by using a plunger or by buying anbsp;drain cleanernbsp;and clog remover from the local hardware store.

You dont want to use these products for too long, however, as they can damage your pipes over time. So if youre dealing with a persistent issue, its best to call a professional.

Once the clog is cleared, you may also want to consider installing a drain screen to prevent similar problems in the future.





The Role of Scent in Selling a Home

When youre trying to sell your home, there are a lot of psychological factors that matter, but you might overlook their importance. Scent is a big one.

If your home doesnt smell good, and especially if it has some sort of detectable odor, youre going to have a much harder time selling it.

There are short and long-term scents that may be affecting would-be buyers when they walk into your home. A short-term odor might be a lingering cooking smell. A long-term odor might come from carpets that have pet urine, for example.

The following are things to know about the role of scent when youre trying to sell a house.

Why Scent Matters

There are quite a few reasons scent matters. We dont even necessarily realize how much scent influences us psychologically every day. Even a slight bad odor can make buyers associate your home with being old or dirty. Scent is a powerful way to evoke emotions, both good and bad.

How Do You Know If Your Home Stinks?

Its important to realize that you might not necessarily know your own home smells bad. You could be so used to whatever the smell is that you dont notice it. It could be a transient smell or one thats always underlying when people walk into your house.

Before you put your house on the market and also before you have any showings, try to have someone do a smell test.

If theres no one to help you, walk outside for a few minutes and then come back in.

Find the Source

If you can, find the source of what might be making your home smell bad.

For example, it could be mold or wetness inside your walls or in your basement. In this case, you need to root out what the source is and fix it rather than trying to mask it.

You might need an expert to help you, but sometimes its a quick fix, like unclogging a drain.

General Odor Elimination

If your home doesnt have any particular odor issue, but you want to make sure it smells good for potential buyers, there are a lot of things you can do.

Focus most of your attention on your kitchen and areas where your pets spend time.

Using vinegar as a cleaning product helps neutralize odors, and you can also leave a bowl of it out on the counter to absorb bad smells.

If you have pets, you may need to do a deep clean of any areas they spend a lot of time, and you should vacuum up any pet hair and dander daily when your house is on the market. Empty litter boxes often, and bathe and groom your pets regularly.

What About Cigarette Smoke?

If anyone has smoked in your house, it can reduce your resale value by as much as 30. Smoke absorbs into your walls and other fibers, so the odor can stick around even if no one has smoked in the house in years.

The best thing you can do is take everything out of your home and do a deep clean, in addition to having your HVAC system thoroughly cleaned. You will probably also need to operate a HEPA filter with a charcoal pre-filter.

Replace any carpets if there was ever a smoker in your home, and use a primer like Kilz on the walls thatnbsp; neutralizes odors.

Create a Positive Impression

Once your home is clean and you have a neutral odor backdrop, there are certain smells you can introduce that will make possible buyers view it more favorably.

The >

Dont use essential oils, candles, air fresheners, or anything like that because some people are very sensitive to these smells and it may put them off.

Just try to keep things smelling clean and fresh without overdoing it if you want to appeal to the broadest base of possible buyers and make a good impression.





How is a Home’s Fair Market Value Determined?

Theres a term in real estate thats >

We all know there are a number of variables that actually interfere with transactions, and both buyers and sellers negotiate until they can come to a price they agree on.

While negotiation is a big part of buying a home, understanding fair market value is also >

There are a few things fair market value isnt. It isnt solely what either party thinks the value of the home is, nor is it just the appraised price. Its also not the tax value. These factors can be part of the fair market value, though.

Calculating Fair Market Value

There isnt a specific fair market value formula, and homes are assets that are subject to the ups and downs of the market. Primarily, supply and demand play a role in the value of a home.

Some of the elements that can be considered when calculating fair market value are:

Current market trends
A comparative market analysis of other properties that are similar and in the same area
Having an appraiser assigning a value
Calculating the fair market value based on a price per square foot

Any one of these things can be used in conjunction with one another to start to come to a fair market value.

Figuring out the fair market value is something real estate agents are experts at, which is one of the reasons people opt to hire them rather than trying to sell their homes independently. Its important to have knowledge of the facts of the property itself but also whats happening in the local real estate market and even whats happening on a larger level in the economy.

How Is Fair Market Value Used?

Typically, once the fair market value is calculated, then thats used to determine the homes selling price, but with caveats. For example, if the homes fair market value is 250,000 based on market trends, but its in a very popular neighborhood, the asking price might go up to 300,000.

There are other ways outside of real estate that fair market value might be used, and also other applications >

For example, the property tax that you owe to your municipality is probably based on the fair market value of your home. Your FMV tends to go up the longer youve owned your home, so your property taxes go up as well.

The value of your home might also affect tax credits, your gift tax, and your estate tax.

If you were to gift your home or make it part of an inheritance, then the person youre giving it to may have to pay taxes based on the fair market value.

If that person then sells the home and they get more for it than the value it was assessed at when they inherited it, they have to pay capital gains tax on the difference between what they sold it for and the fair market value.

Fair market value is a term used in insurance as well. If your property is damaged, the amount you receive to pay to repair it can be based on fair market value.

If your home is affected by a natural disaster and its evaluated below FMV, you might not get as much compensation.

There are a lot of ways fair market value can be used, but again, its not an exact formula. Its often based on several key metrics simultaneously to figure out how much a home might be worth at any given time if it were to go on the market.





Avoiding a Nightmare Neighbor When Buying a Home

Neighbors matter: more than three-quarters of Americans say neighbors factor into their decision when choosing a new home, said mortgage company Ally. Their new survey asked more than 2,000 Americans about their favorite, and least favorite, qualities in a neighbor. More than half of Americans report having had what theyd >

So, if youre looking for a new home, how do you know who your neighbors really are? You do these three things:nbsp;

Ask

You may not get a straight answer by asking the seller about your neighbors, unless one of them has done something that needs to be legally disclosed. Otherwise, sellers dont have much reason to tell you if they dislike the guy that lives next-door or across the street. After all, they want to make the sale. And, just because theyve had issues with a neighbor doesnt mean you will.nbsp;

But, your real estate agent has a duty to you and he or she might be able to get some information from the sellers agent. It may also behoove you to ask other neighbors. See someone outside? Introduce yourself

Spy

Making multiple visits at different times of the day and on different days is always a good idea when youre buying a house. Your one brief visit wont give you sufficient information about what its like to live in the neighborhood.nbsp;

Your best bet: Get out of the car and walk around. Ideally, you should try taking a few different routes on your walks around the neighborhood and go at different times of day, said The Zebra. It takes time, but the amount of valuable information youll get from it is well worth it before making a decision this big.

Research

Your first movebefore you moveshould be to check for sexual offenders in the area on a site like Family Watchdog. You can also do a reverse address search to check specific houses in the neighborhood on a site like Spokeo. Youd be surprised how much you can learn with just a few clicks. An address leads to a name that leads to police activity or court records.nbsp;

If you can find a way to get on the Nextdoor community site in the neighborhoods in which youre looking, youll find a goldmine of information about the people who live there. Some neighborhoods also have Facebook pages that might provide you with valuable insight.nbsp;







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