Is January the new April? When it comes to the real estate market, experts say yes. Regardless of whether that famous groundhog sees his shadow, a recent article on CNBC suggests spring will arrive early this year-at least when it comes to the housing market. In fact, some are speculating that January may very well...
Remember when we first got together? People didn't think we'd last. Maybe they didn't always say it, but they thought it. "You could do so much better. Why would you be a real estate agent?" "What's your back-up plan?" "You should get a real job..." I'm sure they were well-intentioned.
Posted by Mark Cabal on Wednesday, January 18, 2017 at 4:31 PMBy Mark Cabal / January 18, 2017Comment
The housing market has changed a lot in just the past few years. The old philosophy of buying the most expensive house you can afford has become obsolete. There are far more advantages to buying the least expensive house you can afford.
Consider some of the following . . . .
Lower Down Payment and a Lower Monthly Payment
Every expense and cash outlay that you have in connection with a house rises and falls with the price that you pay to purchase it. That includes your down payment. For example, if you purchase a $300,000 house, and need a 20% down payment, you’ll need to have $60,000 upfront. But if you opt instead for a less expensive house, say $200,000, your 20% down payment will be only $40,000.
That will leave you with $20,000 extra after closing on the home. This is more important than it seems on the surface too. The down payment that you make on a house can be thought of as trapped equity. That means it is capital sitting in the property, but unavailable for other purposes.
The same is true with expenses. A higher-priced home will result in higher property taxes and insurance, and if the house is also larger, you’ll have commensurately higher utility and maintenance costs.
One of the fundamental problems with both the down payment and the monthly expenses in regard to higher-priced homes, is that you essentially locked them in at the time you purchased the home. There will be no opportunity to lower those expenses after the fact.
More Money for Living Life – Avoid Being ‘House Poor’
The more money that you have tied up in the house – whether in the form of a down payment or a high monthly payment – the less you will have available for everything else in your life. At the extreme, a high-priced home could lead you to be house poor – owning a nice home, but having little room in your budget...
Posted by Mark Cabal on Friday, December 16, 2016 at 2:14 PMBy Mark Cabal / December 16, 2016Comment
This is the first time a 'shared-equity' program with no interest payments has been approved by a federal mortgage agency
Freddie Mac is piloting a program that lets homebuyers get half of a 20 percent down payment covered by a financial firm (Unison Home Ownership Investors) in exchange for home equity.
Twenty Unison-boosted loans have closed so far, with 10 going to first-time buyers, but lenders expect to generate "thousands" over the next few years.
New down payment assistance is putting homeownership within reach of more consumers and boosting the buying power of others, sometimes by hundreds of thousands of dollars.
Federal mortgage guarantor Freddie Mac is piloting a groundbreaking program that lets homebuyers get half of a 20 percent down payment covered by a financial firm in exchange for home equity.
The down payment assistance comes from Unison Home Ownership Investors (formerly First Rex) — a San Francisco-based firm that invests in homes alongside owner-occupant buyers and lets homeowners sell home equity for cash.
How the program works
Participating borrowers can fork over a 10-percent down payment and end up with the same monthly mortgage bill as borrowers who use their own money to cover the full 20 percent for the same loan...
Posted by Mark Cabal on Friday, December 9, 2016 at 4:37 PMBy Mark Cabal / December 9, 2016Comment
Newlyweds have trouble enough without having to worry about picking out furniture. In a perfect world, every newly married bride and groom has rich enough friends that the bridal shower includes teak dining tables, mahogany chests of drawers, sofas fitted with a freezer for keeping cold drinks cold, and a microwave for keeping popcorn warm. In my own experience, we had to scour every last coin we had just to get our life after marriage as comfortable and as pleasing as possible. Alas, such a perfect world is not the one into which most people marry.
Argue Now, Laugh Later
Then again, picking out your first furniture together may be one of the longest-lasting and happiest memories of your entire marriage. Of course, going shopping for furniture for the first time together as a couple can be a lot less interesting if you both share the same tastes. Fortunately, the trope that opposites attract is true often enough that very few newly wedded couples head to the furniture store with both parties in full agreement that French Provincial or Georgian or even Art Deco is the way to go. Here’s the thing to keep in mind when the debates over furniture styles start: you will one day look back on those arguments and laugh.
The point? Don’t be afraid to stake a claim for a Gate-leg table even if your so-called better half insists that his family has always been a dropleaf table family and always will be a dropleaf table family.
The Bare Necessities
You may have heard an old married couple boast that during their first year of marriage, the only furniture they owned...
Posted by Mark Cabal on Monday, November 14, 2016 at 4:22 PMBy Mark Cabal / November 14, 2016Comment
There are two (!!) bedrooms in a very tidy 184 square feet.
One downside (or upside, depending how you look at it) of downsizing to a tiny house is no longer hosting overnight guests. There's simply no room for extra bodies when you're already scrambling to fit the kitchen sink.
Meet the answer to your entertaining woes: the Hikari Box Tiny House. Made by the small space experts Shelter Wise, the home makes the most of its 184 square feet by lofting a master and guest bedroom. The "large" suite can accommodate a luxuriously-wide queen bed, and the second loft can fit a twin mattress (or a cozy reading nook if you're so inclined).
The extra bedroom doesn't mean less storage space, however. A set of Japanese "tansu" stairs also function as a large closet — not to mention a perfectly-sized cabinet for wine, like in this model.
If you're still not sold on the tiny house lifestyle, what the Hikari may lack in space it makes up for in windows. Its name, which means "light-filled" in Japanese, comes from the 14 windows (including a skylight over each bedroom). Star-gazing from your queen-sized bed doesn't sound...
Posted by Mark Cabal on Thursday, October 20, 2016 at 4:22 PMBy Mark Cabal / October 20, 2016Comment
For most people, buying their first home quickly changes from excitement to fear with daunting new terminology to learn, contracts to sign and obligations that may last 30 years or more. Many decide it's too much and take what I call the ostrich approach: they more or less bury their heads in the sand, taking the path of least resistance, often spending less than an hour examining a property before making an offer.
Almost always, they realize they've made avoidable mistakes costing thousands of dollars or more. For a typical buyer, it's well worth spending an extra 20 hours of time to save more than $10,000.
If you follow these ten critical rules of buying a first home, you'll put yourself in a position to avoid many of the common (and often expensive) traps. You'll also have the satisfaction of knowing you're in the minority that bought a home the smart way.
One caveat before beginning: I saved the most important and easiest rule for last so you'll remember it. These are the rules professional real estate buyers use that you should also follow.
10. Shop Around -- On Interest Rates And Beyond
For most homeowners, the most expensive component of a home is the interest expense on a mortgage. Before you begin shopping for a home, your first step is shopping for a mortgage. A natural first place to begin is your current bank that you already have a relationship with, but it certainly shouldn't be your last.