Hope Leitner, Realtor®, CRS

This time of year, many people eagerly check their mailboxes looking for their tax return check from the IRS. But, what do most people plan to do with the money?  GO Banking Rates  recently surveyed Americans and asked the question -  “What do you plan on doing with your tax refund?” The results of the  survey  were interesting. Here is what they plan to do with their money: 41% - Put it into savings 38% - Pay off debt 11% - Go on a vacation 5% - Make a major purchase (car, home, etc.) 5% - Splurge on a purchase Upon seeing the research,  The National Association of Realtors  (NAR) wondered if this could help with a constant challenge cited by many people who wish to purchase a home –  saving for the down payment . In a recent post in  NAR’s Economists’ Outlook Blog ,  they explained: “With a sizable tax refund, the average American would have a decent down payment depending on which region or market you live in.” ...

Homeownership will always be a part of the American Dream. There are advantages to owning your own home ( educational ,  health ,  social ) that far transcend any economic impact. However, we want to look at several of the financial advantages of homeownership in today’s post. 1. Buying is Cheaper Than Renting The results of the latest  Rent vs. Buy Report  from  Trulia  show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The report reveals that: “Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation…Nationally, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.” 2. Homeownership “Forces” You to Save According to  SavingAdvice.com , homeownership ...

If you thought about selling your house this year, now may be the time to do it. The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market. Jonathan Smoke,  Chief Economist  at  realtor.com , revealed in a  recent article  that: “The biggest challenge to buyers this spring will be simply finding a home to buy and getting it successfully under contract. That’s because the supply of homes for sale is at an all-time low, and yet demand is strong and getting stronger.” Smoke goes on to say: “We started the year with the lowest inventory of homes available for sale that we’ve ever seen on realtor.com. While we did see inventory grow 2% in February, total inventory was down 11% over last year.” I...

Buying a home can be intimidating if you are not familiar with the terms used during the process. To start you on your path with confidence, we have compiled a list of some of the most common terms used when buying a home. Freddie Mac  has compiled a more exhaustive glossary of terms in their “ My Home ” section of their website. Annual Percentage Rate (APR)  – This is a broader measure of your cost for borrowing money. The APR includes the interest rate, points, broker fees and certain other credit charges a borrower is required to pay. Because these costs are rolled in, the APR is usually higher than your interest rate. Appraisal  – A professional analysis used to estimate the  value of the property . This includes examples of sales of similar properties. This is a necessary step in getting your financing secured as it validates the home’s worth to you and your lender. Closing Costs  – The costs to complete the real estate transaction. These cost...

Many Americans got some depressing news last week; either their tax return was not as large as they had hoped or, in some cases, they were told they owed additional money to either the Federal or State government or both. One way to save on taxes is to own your own home. According to the  Tax Policy Center ’s  Briefing Book   -“A citizen's guide to the fascinating (though often complex) elements of the federal Tax System”  - there are several tax advantages to homeownership. Here are four items, and a quote on each, from the  Briefing Book : 1. Mortgage Interest Deduction “Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage. The deduction is limited to interest paid on up to $1 million of debt incurred to purchase or substantially rehabilitate a home. Homeowners also may deduct interest paid on up to $100,000 of home equity debt, regardless of how they use the borrowed funds. Taxpayer...

When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase a home with a down payment below 20%, you can never have too much information about Private Mortgage Insurance (PMI). What is PMI? Freddie Mac  defines  PMI as: “An insurance policy that protects the lender if you are unable to pay your mortgage. It's a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%. Once you've built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.” As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary.  Freddie Mac  goes on to explain that: “The cost of PMI varies based on your loan-to-value ratio – the amount you owe o...

Some Highlights: Interest rates are still below historic numbers. 88% of property managers raised their rent in the last 12 months! The credit score requirements for mortgage approval continue to fall.