Tag - 2021 housing market

Buy First, Sell Later

Buying a new home after your current home has gone under contract and only having less than a week to find a new home can be an extremely stressful situation. One way to make the process of buying a new home easier is to buy first and sell later. Meaning buy your new home, move into it at your leisure, then once your old home is empty, list and sell it. There are many benefits to this strategy. Firstly, this makes it so you only have to move one time and won't have to deal with expensive storage fees or doubled moving expenses. You’ll also have a cushion in case something goes wrong during the process of purchasing the new home. Like in the unfortunate case of a deal falling through, you’ll still have your old home to stay in. It also gives you time to make improvements or repairs on your old home before listing, which can help ensure you receive top dollar offers from interested buyers. To make this type of financing happen there are two major considerations to work out: your down payment AND qualifying for both mortgage payments. Qualifying for both payments can be tough. If you qualify for both payments right away, it’s smooth sailing. If by chance you don’t qualify for both, there is still an option for you. You can convert your existing home to a rental property and use 75 percent of the home to a rental property and use 75 percent of the rental income to offset the existing payment. This strategy works great if you are wanting to acquire rental properties and grow your real estate portfolio. Figuring out the best strategy to purchase and sell your home can be a bit complex and difficult at times. So, you never want to go at the process alone! It is always better to have a trusted mortgage professional on your side. There is never any harm in discussing your situation with a mortgage lender, like me, who will be able to tell you after running a few numbers whether you can make the buy first, sell later strategy work. If you think this is something you would like to look into, give me a call and let's discuss it further.
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Low Mortgages Rates are Propelling Wave of Cash-Out Refinances

The continuation of favorably low interest rates has propelled a wave of cash-out refinances, the most we have seen since the financial crisis of 2008. Many think this is cause for concern, but its not; at least not yet. Given the rapid growth in the home process in the last year, the share of cash-out refinances isn't terribly high. There were more during earlier housing booms, including the housing crash 15 years ago. A cash-out refinance allows a borrower to swap their current loan for a new one with a higher balance. So, homeowners can pay off their old mortgage and still have cash left over. A recent report found that in 2020 the amount of equity tapped into through cash-out refinances increased by 42%. These days, it appears that most borrowers are using the funds to pay down other debt and to update their homes. Home improvement spending sky-rocketed during the pandemic. Homeowners are sitting on a lot of home equity right now and what a lot of people are doing is taking this money, getting a cash-out refinance, and using the cash to make renovations to their home. Many projects from adding a screened-in porch, updating a bathroom, creating a home gym or adding an official home office all add to overall value of a home. These are smart moves to make as the improvements are actually going to help their home sell for a significantly higher amount of money in a few years. It's important to do home improvements that are low cost but add the biggest value to your home. Interested in looking into the amount of equity you could tap into? Reach out about a cash-out refinance. Whether you are looking to pay off some debt or complete a home remodel, we can help guide you ever step of the way. Call today! 801.206.4343

*Source: Kiplinger Letter: Vol.98, No.10**

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What to Expect from 2021 Housing Market

It’s safe to say there will not be a lot of people sad to say goodbye to 2020. With new vaccines being developed it seems the days of the pandemic will soon be behind us, while it seems the increasing home prices may be here to stay. The demand for housing and the housing market are expected to remain strong in 2021. Prices are expected to decrease through the spring and summer, and then gradually increase toward the end of the year. Sales of existing homes are projected to increase 7% in 2021. This increase is expected to come from younger millennials who are competing with older members of Generation Z for starter homes, baby boomers who are looking to downsize and many renters are seeking to buy their first home. The demand is being fueled by mortgage rates at record lows, and from the pandemic making many households realize they need more or different housing than what they have needed in years past. We just finished helping a family buy a new 4,400 sq. foot home who was in this same boat. Their previous home was 1,800 sq. feet which was perfect when they bought it 5 years ago. At the time they bought it, it was just them with a baby on the way. Now they have 2 kids and thinking that there could be one more. Prior to the pandemic they felt their house was cramped, but they were rarely in it and it did not bother them that bad. The husband worked days at an office and the wife is a nurse who works nights. The pandemic shifted their life. The husband is now working from home in a cramped corner of his bedroom and kids running around everywhere. Their weekends are spent at home stepping over each other all day instead of being out and about. They decided it was time to sell and buy a new house. They found a bigger house for sale in their neighborhood because they didn’t want to leave their neighbors. They went under contract and then listed their 1,800 sq. ft. house which sold in a couple of days. Their 1,800 sq. ft. house was the perfect starter home for them. They quickly outgrew it but continued living there due to convenience. The pandemic changed everything, and it was no longer convenient to stay in the cramped space. They love their new 4,400 sq. ft. home. They love that they were able to stay in the same neighborhood. They love that the kids have their own play area, and they are no longer stepping on toys throughout the entire house. They also feel with the extra space they can get more serious about having baby #3. If 2020 taught us anything it is that everything can change in an instant. There is only so much we can make predictions about for the new year. If you are in the same situation where your house used to fit your family and lifestyle but due to the pandemic you have quickly realized it does not due to not having a dedicated home office or enough space to stay sane with everyone being in the home, give us a call.
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