FHA reduces mortgage insurance premiums!

Mortgage RatesWhen was the last time you heard of prices going down?  That is what happened today when the FHA announced they are cutting their annual mortgage insurance premium from .85 percent to .60 percent for less than 5% down payment option and from .80 percent to .55 percent for 5% or more down payment. This will help offset current higher interest rates and help make housing more affordable in 2017! Don’t forget that the conforming loan limit has also increased to $636,100 which applies to FHA financing as well.

Let me know if you have any questions! Happy New Year!

Ray Kozak

This Minority Group Is Creating a Buying Boom

The Asian American community has become the fastest-growing minority demographic in the country and their stake in home ownership is quickly widening. 

By 2024, 1.8 million more Asian households will be formed, according to the newly released Asian Real Estate Association of America’s 2015 report on the State of Asian Americans. 

“This report shows the tremendous buying power of Asian Americans and Pacific Islanders (AAPI) not only now, but for the foreseeable future,” says Vicky Silvano, AREAA 2016 national chairwoman. “Over the past five years, AAPI took out two million home loans, representing $600 billion in mortgage originations, more than any other minority group.”

The Asian American community applied for — and received — the largest share of purchase money mortgages of any minority group in terms of both number and monetary value, according to the 2014 study “Asian American Outcomes in the U.S. Mortgage Market.”

What’s more, Asian Americans tend to have higher credit scores, low APRs, and lower LTV ratios than the general public. They also have a higher median personal and household incomes than the U.S. general population, as well as more education with nearly half of all AAPI’s holding at least a bachelor’s degree, Silvano says. 

“Our research also found AAPI aren’t content to stay in the traditional ‘gateway’ cities of Los Angeles, New York, and San Francisco anymore,” she says. “Nearly every state experienced at least 50 percent growth in their Asian population since 2000, with states in the South and West making the biggest gains.” 

Home Buyers: The Bargains are Now

Mortgage RatesFor home buyers chasing a bargain, they may want to act fast. Closings in January provide the best discount for home buyers, according to Lawrence Yun, the chief economist for the National Association of REALTORS®, in his latest column at Forbes. That means buyers can get the best deals when they get a home under contract around December, Yun writes.

“The seasonal decline is not all price depreciation of homes” in winter, Yun notes. “A good portion of movement is driven by a higher proportion of lower priced and smaller-sized homes getting sold during the winter months. The reason for this is that families with school-aged kids are generally not in the market during the winter because they do not want their kids to be disrupted during a school year, and it is the families with kids that generally require the larger homes that carry higher prices.”

The discounts in the winter and during the holidays may be a perfect opportunity for home buyers looking to break in to the housing market.

“Real estate professionals know this to be true in everyday business since there are far fewer buyers shopping over the holidays; as a result, listed homes staying on the market for a longer period. In short, there is a discount to be had for the few buyers purchasing over the holidays.

Source: “Now Is the Best Season to Buy a Home,” Forbes (Dec. 2, 2015)

The “Upside” of “Downsizing”

Masion entrywayThe Upside of Downsizing Your Home

By Anne Miller

You worked so hard to own your home, it’s hard to imagine moving on—much less to a smaller abode. But while downsizing your home may involve major lifestyle changes, there are a lot of advantages to moving into a smaller space.

Downsizing remains one of the most effective ways to lower housing and energy costs.

These are just a few of the advantages:

  • Lower mortgage payments
  • Lower utility bills
  • Less to clean
  • Easier to maintain
  • Less yard maintenance

While the size of the average American home remains fairly large, there are signs that downsizing may increase in the future.

Home Downsizing Trend: No More McMansions

The average American home has grown from under 1,900 square feet some 20 years ago to more than 2,400 square feet, according to 2013 U.S. Census data.

Families who bought five, ten, or even 15 years ago or more might find many rooms unused as their children have grown and moved out. While the baby boomers continue to hold on to many of those larger homes, according to recent reports, experts predict an uptick in downsizing as the oldest boomers enter their mid-70s.

 “We continue to move away from the McMansion chapter of residential design, with more demand for practicality throughout the home,” writes Kermit Baker, chief economist at the American Institute of Architects. “There has been a drop-off in the popularity of upscale property enhancements such as formal landscaping, decorative water features, tennis courts and gazebos.”

Large foyers are becoming a thing of the past. The formal living room is being replaced by a more flexible open plan, such as a large family room/breakfast nook/kitchen combination.

Downsizing Your Budget

For some homeowners, of course, downsizing is not a matter of choice, but of necessity. Many families are still digging out of the recession, which had an impact on home values, employment and retirement nest eggs invested in the stock market. A couple finding itself with a diminished income may simply be unable to keep up with mortgage payments and maintenance costs on a 2,800-square-foot home on a half-acre lot.

Still, the very idea of downsizing takes some getting used to—much less carrying out a downsizing plan. If you feel stuck, a home downsizing consultant can help you formulate a plan of action, appraise and sell belongings, and estimate how much money you stand to save.

Learning to Live With Less

Downsizing your home means a change in lifestyle and attitude. You may have to learn to live without a garage, that extra bathroom, and the basement storage where you tossed years’ worth of home goods, equipment and mementos. A smaller home can mean less room for guests and less opportunity for privacy.

As you consider downsizing, ask yourself these questions:

  • Do you feel ready to live more simply?
  • Are you prepared to divest yourself of resources?
  • How many of the things you’ve accumulated over the years do you truly treasure?

Home downsizing is really about making do with less. But some people would say that less is more. Rather than devoting your time and energy to supporting and maintaining your home, you may find yourself devoting more of your time and energy to enjoying it.

Based on an earlier version by Ben Garson.