NAR looks at the monthly mortgage payment (principal & interest) which is determined by the median sales price and mortgage interest rate at the time. With that information, NAR calculates the income necessary for a family to qualify for that mortgage amount (based on a 25% qualifying ratio for monthly housing expense to gross monthly income and a 20% down payment).
Here is a graph of the income needed to buy a median priced home in the country over the last several years:
And the income requirement has accelerated even more dramatically this year as prices have risen:
Bottom Line
Some buyers may be waiting to save up a larger down payment. Others may be waiting for a promotion and more money. Just realize that, while you are waiting, the requirements are also changing.
Original Post from www.keepingcurrentmatters.com
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HOW RENTERS INSURANCE WILL HELP COVER YOUR VALUABLES
Imagine a moment you’ve just returned home from a long day at work to find there’s been a fire. Everything you owned has been destroyed: your flat-screen TV, computer, furniture, books, game consoles, CDs, jewelry, collectibles and clothing. Where will you stay until your home is renovated? Who will pay to replace all your belongings? Not your landlord.
A Renters insurance policy can be the answer. It provides coverage to help you to replace your lost or damage items. If you suffer a covered loss, we’ll reimburse you for your lost or damaged items. And if the loss makes your home uninhabitable, we’ll also pay for the additional living costs for hotel, meals and related expenses.
Renters policies are affordable, generally ranging from $15-$25 each month. For less than a dollar a day, you can have valuable insurance coverage!
BENEFITS
– Personal property coverage
– Personal liability coverage
– Additional living expenses
OPTIONAL COVERAGES
– Personal articles floater
– Jewelry, furs, fine arts
Red Rock Management & Real Estate Investment
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She writes, “Just recently, a reader asked me about the difference between buying a house with cash and buying a house with a home loan. That’s a great question!
Here’s a rundown of the differences.
Buying a house with cash saves you money. You don’t have to pay for an appraisal. That doesn’t mean you can’t or shouldn’t pay for an appraisal, you just don’t have to.
Buyers using a home loan have to pay for an appraisal. The lender requires an unbiased, licensed appraiser to give a thoroughly researched and documented report on the value of the home so the lender is confident you’re paying the right price and that they are making a sound investment.
A home buyer paying cash also saves on other lender related costs including a credit report, loan origination fee, flood certification, tax service fee (the lender has to be aware of any back taxes owed) lender required title insurance and any points a borrower chooses to pay to bring down the interest rate on the money borrowed.
In addition, a cash buyer is not required to purchase home owner’s insurance.
When you get a home loan, the lender requires evidence of insurance, and you pay for a full year up front.
I’d never recommend not buying home owner’s insurance. However, when you’re buying a house with cash, you can work it out directly with your insurance carrier as to the frequency of payments.
When you are buying with cash, you also save on escrow fees including the loan tie-in fee, the loan documentation prep fee, and the notary fees (you’re not signing anything that needs to be notarized).
The more subtle aspects of buying with cash include the need to prove you have the cash up front with your offer. This means you need to submit, up front, bank statements showing sufficient funds to cover the price.
If you are flush with tons of cash, you may want to keep a bank account that only has a balance large enough to cover the cost of the house and your share of the escrow fee and a processing fee.
You have no need to show the seller how much you have overall.
You get to keep your financial status a secret, as opposed to a buyer getting a home loan. Those who buy with a loan have to provide full financial disclosure to the lender to qualify for the loan.
There’s much less paperwork required when buying with cash. You can also close escrow much more quickly. You do not have to budget time for the appraisal review, underwriting review, management review, and all the time to prepare and review loan documents.
There’s also the advantage of representing less risk to a home seller. If you show the seller the money up front, and if your offer is a figure that is acceptable to the seller, you will probably win out over a buyer who needs a loan. Cash is much easier and less risky.”
Source: OC Journal – leslieeskildsen.com.
Red Rock Management & Real Estate Investment
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For some, now is a great time to buy real estate, especially Las Vegas real estate. Home
values are poised perfectly for an upswing in appreciation. There is a demographic of people
who can really score in this market. According to Yahoo:
“Dual-income customers should definitely buy a home now,” says George Kaiser, vice president
of banking operations for Northbrook Bank and Trust and West America Mortgage Co., its
sister company. “People with assets in reserve and a credit score of at least 680 should buy
as well. Anyone with a credit score less than that will have to verify their income.”
For others it is also a great time to get involved. For some it’s not. If you need help
determining whether or not the Las Vegas real estate market is right for you now get in
contact with your Las Vegas Realtor at www.RedRockManagementlv.com.
Red Rock Management
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An article in CNN this morning was very intriguing and will likely spark some political
skirmish. As mentioned in the article:
“Under the House plan, the Department of Housing and Urban Development would dole out the
loans and grants based on the number of foreclosures and home prices in an area. Cities
could use the money to buy foreclosed homes, renovate the homes to make them compliant with
housing codes, and resell or rent them.”
The goal is to help keep neighborhoods and the city as a whole in good shape since there are
so many vacant homes on the market. They tend to be run down.
In Las Vegas we’re seeing a significant number of homes that are vacant. There has been
issues with dilapitated homes and associated values. Some Las Vegas real estate agents are
wrapped up in these properties and are able to get good deals on them. However, if buyers
aren’t available it takes some technique to sell these properties. We’ll keep an eye out to
see if the bill passes.
Red Rock Management
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The Realtor® Magazine published an article in March about real estate purchaser preference.
They claim that although incentives are attractive, lower home prices draw more interest.
Many Las Vegas real estate agents don’t oppose incentives and have found success with them.
However, one major factor that affects buyer interest is that fact that buyers who work with
Realtors® typically use the MLS home search. There is no search criteria for “incentives” or
similar terms. Potential buyers have to stumble upon incentives as they peruse and the odds
of being found are lower. However, most buyers do use price as a criteria and if a seller’s
house priced better than its competition it will draw more views. The important thing in a
tough selling market is to get as much attention as possible.
According to the article:
“The single thing that’ll drive buyers and salespeople to a property is that it must be
priced at today’s market value. If that happens, you’ll get buyers at the property, and
you’ll get practitioners there, too, because they believe buyers will buy.”
Red Rock Management
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