Blog - Leagan Realty

Leagan Realty

Lisa & Gary Eagan

What’s Ahead For Mortgage Rates This Week – October 7, 2013

by Leave a Comment

What's Ahead For Mortgage Rates This Week- October 7, 2013This week’s economic news commentary has been dominated by the “what ifs” of a government shutdown; opinions of potential consequences are limited only by the number of commentators sharing their opinions.

Unfortunately, more concrete examples of the shutdown were evident last Tuesday and Friday.

The Department of Commerce delayed release of August’s Construction Spending report that were due last Tuesday and The Bureau of Labor Statistics delayed the release of September’s Non-farm Payroll and Unemployment that were due last Friday.

The ADP Employment report for September posted a reading of 166,000 private sector jobs added against expectations of 180,000 new jobs added. September jobs added surpassed August’s reading of 159,000 new jobs added in the private sector.

Mortgage Rates Remain Near Record Lows

Freddie Mac’s Primary Mortgage Market Survey released Thursday brought a third consecutive week of falling mortgage rates. 30-year fixed rate mortgages had an average rate of 4.22 percent down from 4.32 percent the previous week.

The average rate for a 15-year fixed rate mortgage fell by eight basis points from 3.37 percent to 3.29 percent and the average rate for a 5/1 adjustable rate mortgage fell to 3.03 percent from 3.07 percent.

Discount points were unchanged from last week at 0.70 percent for both 30-year and 15-year fixed rate mortgages and rose from 0.50 percent to 0.60 percent for 5/1 adjustable rate mortgage loans.

Weekly Jobless Claims were lower than projected. The reading of 308,000 new jobless claims was better than the 313,000 new jobs expected, but was higher than the prior week’s 307,000 new jobless claims.

What‘s Coming Up Next

This week’s scheduled economic reporting is also subject to adjustment if the federal government’s budget is not resolved. The most recent FOMC meeting minutes are due on Wednesday; if released they are expected to provide details about the Fed’s decision not to change its current quantitative easing program.

Weekly jobless claims and Freddie Mac’s PMMS survey of average mortgage rates are due Thursday. The University of Michigan Consumer Sentiment Index for October is set for release on Friday. 

Do Fence Me In, Here Are A Few Good Yard Fencing Options

by Leave a Comment

Do Fence Me In… Your Yard Fencing OptionsWhether you just got a puppy, have newly mobile children or built a pool, there are a multitude of reasons for wanting to keep people and animals in your yard, while preventing other from entering.

Picking the perfect fence can be difficult, so below we’ve outlined the main fencing materials to choose from and characteristics to consider about each.

Wood

Wood seems to be the most common material used in yards across the country — especially when wanting privacy. Depending on the type of wood you purchase, you’ll probably want to stain the planks to protect them from rot and ultra-violet light. Be prepared to retreat and maintain your wooden fence about every four years.

Chain Link

This economical option does its job well as a security fence. It’ll keep pets in and people out. And with the new black or green plastic coating chain link comes in, it almost blends into any background.

Chain link fences shouldn’t require any maintenance for at least 10 years, and they usually come with warranties for at least that long.

Wrought Iron

If you’re in the market for an ornate fence that you can see through and provides high security, then wrought iron should be your pick. These fences are actually made from steel and aluminum and need virtually no upkeep. Don’t expect to see any issues for at least 20 years.

Vinyl

You like the look of wood, but you hate the upkeep. Well, if you’re willing to spend the extra dough, usually four to five times the cost of wood, then you can have a man-made product that looks like the real thing.

Faux-wood fencing is usually seen in white, but can come in a variety of colors and even look almost identical to actual wooden planks. The best part is — no maintenance required!

Whatever your reason for building a fence, such as privacy, security, safety or to add curb appeal, you’ll have hundreds of options to choose amongst. Be sure you carefully consider each of the main fencing materials above, along with their look and maintenance requirements before you make the investment.

Which Additions Really Add Value To Your Home?

by Leave a Comment

Do Those Additions Really Add Value To Your Home?When you own a home, there are additions that you can make to the property that will improve the value of your home. For example, a newly renovated kitchen or bathroom is a popular choice that will really make the home more desirable to buyers.

Also, adding storage space or a well-thought-out family room or other practical space can be a very good investment that will bring up the home’s value.

However, there are other projects that are not really worth your time or money and will allow very little opportunity to recover your costs when it is time to sell the property. Here are a few examples of things that you think might add to the value of your home, but really don’t.

An Elaborately Landscaped Garden

A beautifully landscaped garden might make the home more visually attractive to buyers when they are looking at the property, but it will not likely add to the selling price.

This is especially true if the new buyer is not interested in putting in the effort to keep the garden well-maintained and sees it as a burden. If they don’t have time to do the landscaping, they will need to hire a gardener which will add to their expenses.

A Hobby Specific Room

Are you tempted to convert a bedroom into a room that is specific to one of your particular interests, such as an art studio, a library or a wine cellar? This will not add a lot of value to the home, because the next buyer is not likely to share your passions.

It might even make the home less than desirable, because the next owner will not want to spend the time and money renovating the room back into a bedroom.

You can create a hobby room; just make sure that you make non-permanent chances to the room so that you can quickly and easily switch it back to a bedroom.

A Renovated Garage

Redoing your garage and turning it into a family room or a play room might give you a short term benefit, but you might regret it when you go to sell the home. Most people want a garage to serve its original purpose – as a place to protect their cars from the elements and store their shovels, garbage cans, leaf blowers and other outdoor things.

These are a few examples of home additions that will not add to the resale value of your property. To find out more about selling your home, contact your real estate professional. 

How Does An Interest-Only Mortgage Work?

by Leave a Comment

How Does An Interest-Only Mortgage Work?When you have been researching your different options for a mortgage on your home, you might have heard of an “Interest-Only Mortgage”. What exactly does this type of mortgage mean and how does it work?

Usually when you take out a loan, you must pay back the capital debt (the amount you borrowed) and the interest on that debt. An interest-only mortgage offers a cheaper option for purchasing a property, because you will only be making payments on the interest and not the capital.

Compared to a repayment style mortgage where you are paying down the principle of the loan, an interest-only mortgage will have much lower monthly payments.

However, when you reach the end of the mortgage term with an interest-only mortgage, you will not have paid off any of the original principle of the loan. This means that you will still not be any closer to owning the home than when you started, whereas with a repayment mortgage you would be in full possession of the property.

You will reach the end of the loan term, still owing the lender $250,000 or whatever the value of the house was. Also, if you do not pay off that lump sum at that point, the lender will charge you interest on the entire loan for the full time.

From the description of how it works, it seems like there would never be a good situation for taking out an interest-only mortgage. However, if you are stretched financially and you are desperate to get onto the property ladder it might be a viable option. Some people take on an interest-only mortgage so that they can buy their first home, then when their income goes up they switch to a repayment mortgage.

These types of mortgages are often used by buy-to-let investors, who are able to claim their tax back against the mortgage interest. If this is your goal, you might find this strategy advantageous.

To find out more about mortgages and determine the best option for your needs when buying a home, contact your trusted mortgage professional.

How To Interview An Architect When Building A New Home

by Leave a Comment

How To Interview An Architect When Building A New HomeMaking the decision to build a home might be one of the biggest you make in your life. You’ve found the perfect plot of land and have a vision of what type of home you want, but you need someone to bring your dream to life.

That means it’s time to start interviewing architects.

Hiring an architect isn’t as simple as just calling up a few and seeing who might have the time.

You’ll want to ensure you choose a professional that understands your design aesthetic, communicates well, can design on budget and has an upstanding reputation.

Below are a few key questions to ask when deciding whom to hire.

Do You Have A Specific Design Style?

When interviewing architects, be sure to ask each one if they have a specific aesthetic and if you can see a portfolio of his or her work. While most are adaptable, they usually all have design themes that recur in their projects.

Whether you want a minimalist structure or LEED certified construction, you’ll want to know they have the experience.

What Is Your Fee?

You’ll need to inquire whether they charge a flat fee for their designs or a percentage of the total building cost. Most architects charge a percentage of the overall cost of your home, usually ranging from 5-20 percent.

This is important to know because it means that for every floorboard installed, you’ll need to add on the architect’s additional percentage.

Do You Provide Project Management Services?

There are many services that architects should include within their contract, such as checking the contractor’s work, making adjustments as the construction moves forward and obtaining lien waivers.

Get a list of what each architect you interview includes in his or her fee. Additional charges can add up and might play a part in who you choose.

Interviewing architects and finding the right professional can make all the difference when it comes to building exactly what you want. One you work well with can make the construction experience extremely pleasant, while a negative relationship can leave you hating your new home.

So do your research and be sure to get references.

What’s Ahead For Mortgage Rates This Week-September 30, 2013

by Leave a Comment

What's Ahead For Mortgage Rates This Week-September 30, 2013Last week brought a variety of housing related news. Highlights included the S&P/Case-Shiller Home Price Index for July, which showed a 12.40 percent year-over-year increase in national home prices. This was up from 12.10 percent in June.

The FHFA Housing Price Index reading traces home prices on properties securing mortgages owned or backed by Fannie Mae and Freddie Mac. The year-over-year reading for July showed an increase of 8.80 percent as compared to a year-over-year reading of 7.80 percent in June.

Rising mortgage rates and rising home prices have caused some buyers to leave the market, while others are jumping in before mortgage rates move higher. Pent-up demand for homes and short supplies of homes for sale are expected to sustain buyer interest and home prices.

The Consumer Confidence Index for September fell to 79.70 percent for September as compared to August’s reading of 81.80 percent, but was slightly higher than the expected reading of 79.50 percent.

Sales Of New Homes Surpass Expectactions

Sales of 421,000 new homes in August surpassed expectations of 420,000 sales and the revised number of 390,000 sales of new homes in July. A short supply of existing homes for sale is attracting buyers to new homes.

Freddie Mac’s weekly Primary Mortgage Market Survey provided good news as average mortgage rates fell. The average rate for a 30-year fixed rate mortgage was 4.32 percent as compared to last week’s 4.50 percent. 

The average rate for a 15-year fixed rate mortgage was 3.37 percent as compared to last week’s reading of 3.54 percent. Discount points were unchanged at 0.70 percent.  The average rate for a 5/1 adjustable rate mortgage was 3.07 percent, which was four basis points lower than last week. Discount points were unchanged at 0.50 percent.

Pending home sales fell by 1.60 percent in August as compared to July; the National Association of REALTOR cites higher home prices and mortgage rates along with depleted supplies of available homes as reasons for fewer signed contracts in August.

The West reported a drop of 1.60 percent in pending sales and the Midwest reported 1.40 percent fewer pending sales in August. The Northeast came out ahead with 4.00 percent more pending home sales in August.

Weekly jobless claims were reported at 305,000 new jobless claims as compared to expectations of 327,000 new jobless claims and the prior week’s reading of 310.000. The Federal Reserve recently cited the national unemployment rate of over seven percent as a clear indication that employment levels are not recovering quickly.

Next Week’s Economic News

While few housing and mortgage related reports are set for release next week, the calendar should provide indications of overall economic conditions. On Tuesday, Construction Spending for August will be released. Wednesday brings the ADP employment report for September. This report tracks private sector jobs.

Thursday brings Freddie Mac’s PMMS report of average mortgage rates and the weekly jobless claims report.

The federal Non-farm Payrolls and National Unemployment Reports for September are set for release on Friday.

Before And After Tips When Dealing With A Disaster

by Leave a Comment

Before And After Tips When Dealing With A DisasterWeather patterns across the United States seem to be getting more and more erratic. From tornadoes and earthquakes to flash floods and wild fires, there are many natural disasters that can quickly consume your home without warning.

Because you never know when disaster might strike, it’s best to be prepared.

Disaster insurance is the only precaution you can put in place to ensure compensation for your belongings and get your life back to normal as soon as possible. Below are the tips to take before misfortune strikes.

Create An Inventory

Most insurance agencies prefer if you include photographs of every room, including the insides of closets and cabinets. Shooting a video is even better. Then you can include audio of how much things cost or if they’re one of a kind.

It’s also a good idea to create a spreadsheet with a list of major items and their value by room. Be sure to email these to yourself, so that you can access them anywhere.

Double-Check Your Coverage

Once you’ve inventoried your possessions, then ensure you have enough coverage. Also, speak with your agent to see if there are any supplemental disaster insurance policies he or she would recommend for your region.

Tips To Do After A Disaster Does Strike

Contact Your Insurer Immediately

Call your agent as soon as possible and be prepared for mountains of paperwork. Be sure to ask for the claim number for your region and use it on all paperwork and in every conversation. This will help expedite your claim.

Secure Your Property

It’s your responsibility to ensure your property is secure after the disaster. Be sure to take photographs and video and then cover or stabilize any vulnerable points. You don’t want the insurance agency to have any discrepancies when determining if the damage was done during the disaster or afterward.

Keep A Correspondence Record

You are going to be completely overwhelmed after such an unfortunate event, but it’s important to maintain your wits. Keep a log of every conversation you have with insurance agents. Log the time, name, phone number and the key points of the conversation. This will help minimize the he-said-she-said accusations that can arise during these hectic times.

Hopefully you’ll never have file a disaster insurance claim. However, if you do, it’s best to be as prepared as possible. Create an inventory of your possessions and make sure you have the appropriate coverage. Then if mayhem strikes, you’ll be that much closer to putting your life back together.

4 Quick Tips On Becoming A Young Real Estate Investor

by Leave a Comment

4 Quick Tips On Becoming A Young Real Estate InvestorInvesting in property at a young age seems like a bit of a daunting prospect sometimes. Most young people don’t have a lot of disposable income, often have poor credit and perhaps even student loans.

When you are in your early 20s, you are not likely thinking about investing in property and are probably focusing on other things. However, investing in property at a young age can bring you a lot of advantages.

It requires a different approach and style and you might be the only one of your peers who is doing so, but you will definitely reap the benefits later on in life. When you invest long-term, you will start building your financial independence.

Some might believe that it is impossible for a young person to start investing so early in life, but investing in your 20s is completely possible.

You are not “too busy”, in fact you will find that you have even less spare time as your responsibilities grow when you get older. You will need a little bit of money to get started, but often you can purchase your first property with as little as 3.5% down.

If you want to get started early, here are some tips that will help you along the way:

  1. Get into very good saving habits from a young age by putting aside your money from first jobs. When you want to take out a mortgage, you will typically need to be able to show savings of 3% of your purchase price.
  2. Maintain a clean credit history and pay all of your bills on time in order to build a great credit rating, so that you can obtain a mortgage with a good rate.
  3. Make the most of technology and social media to learn more about investing in property and to find the best opportunities. You have a wealth of information on investing, all at your fingertips.
  4. Find an older mentor – someone with successful experience who can give you tips on how to choose the right investment.

Another main advantage to investing when you are young is that if anything goes wrong, you will have more time to make mistakes and still recover without affecting your retirement. You have nothing to lose and everything to gain, so why not get started?

Case Shiller Price Index Shows An Annual Growth Rate Of Home Prices

by Leave a Comment

Case Shiller Price Index Shows An Annual Growth Rate Of Home PricesHome prices were still gaining in July, but for 15 of 20 cities included the S&P Case-Shiller 10 and 20-city Home Price Indices, the pace of increasing home prices is slowing down. National home prices rose by 1.80 percent in July as compared to 2.20 percent in June.

Home prices grew by 0.60 percent from June to July on a seasonally-adjusted basis. This was the lowest month-to-month gain since September 2012.

David Blitzer, index committee chairman of S&P Dow Jones Indices, said that higher mortgage rates are hitting the housing market. Mr. Blitzer noted that mortgage rates rose by more than a percentage point between May and the Federal Reserve’s statement last week.

The Fed was widely expected to reduce its monthly bond purchases from $85 billion to $75 billion, but the Fed decided not to reduce its bond purchases as the economy has not recovered sufficiently.

Mortgage Rates Fall 

High home prices and unemployment are making it difficult for first-time and moderate income buyers to compete; buyers sitting on the sidelines are eventually expected to add to the demand for homes.

Mortgage rates fell after the Fed’s announcement, but Mr. Blitzer said that the drop in mortgage rates would likely have a temporary impact on housing. He said that the rate of increase [in home prices] may have peaked.

Conditions contributing to the run-up in home prices include a shortage of available homes and pent-up demand among home buyers. As of July, home prices for the Case-Shiller 20-city index increased by 12.40 percent year-over-year; this was the highest annual rate of increase since home prices peaked in 2006.

Home prices in the Case-Shiller 10-city index increased by 12.30 percent annually. In spite of the rapid price gains, July home prices remained 21 percent below their pre-recession peak.

Home prices in all 20 cities included in the 10 and 20 city indices increased on a month-to-month basis, with home prices increasing by 1.80 percent for the 20 city index and by 1.80 percent for the 10 city index.

Home Prices Show Strong Recovery

Las Vegas, Nevada had the highest annual gain in home prices for July with a 28 percent increase. Las Vegas was one of the cities hardest hit by the recession. Annual home prices for San Francisco, California rose by 25 percent, and New York City had the lowest annual growth rate for home prices at 3.50 percent.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, released its home prices report for properties securing mortgage loans owned or backed by Fannie and Freddie. The annual growth rate for home prices was 8.80 percent as of July, but remains 9.60 percent lower than the peak growth rate reported in April 2007.

Highest Existing Home Sales Since February 2007

by Leave a Comment

Highest Existing Home Sales Since February 2007Sales of existing homes reached their highest volume in almost six years in August. The National Association of REALTORS reported Thursday that sales of existing homes rose 1.70 percent in August to a seasonally-adjusted annual rate of 5.48 million existing homes sold.

This was the highest number of existing home sales since February of 2007.

August’s results exceeded estimates of 5.20 existing homes sold, which was based on July’s unrevised reading of 5.39 million existing homes sold.

The NAR also reported that the national median home price increased to $212,100 in August. This represents a year-over-year increase of 14.70 percent and was the largest annual increase in the national median home price since October 2005.

Sales concentrated in areas with higher home prices contributed to this significant increase in the national median home price.

Homebuyers Increase Despite Higher Home Rates

The reading for existing home sales in August suggests that homebuyers are not shying away from higher home loan rates; it may also indicate that the recent shortage of existing homes for sale is beginning to ease.

August’s higher number of existing home sales was attributed to home buyers anxious to lock in lower loan rates in an environment of rising mortgage rates. Also, economists had expected the Federal Reserve to begin reducing its monthly securities purchases, which did not happen.

Had the Fed tapered its securities purchases, long-term interest rates including mortgage rates, would likely have continued rising. The Fed may have decided not to reduce its monthly securities purchase in an effort to slow rising mortgage rates.

The average rate for a 30-year fixed rate mortgage has increased by more than one percentage point since May. Home buyers may respond to rising mortgage rates by delaying their home purchase to see if mortgage rates will fall, or they may rush to buy a home before rates go higher.

Mortgage Rates Affect Home Buyers In Three Ways:

1. As rates increase, monthly house payments also rise, which can impact affordability for first-time and moderate income buyers.

2. National unemployment rates remain higher than the Federal Reserve’s target rate of 6.50 percent. While home prices are increasing and other facets of the economy are showing improvement, jobless claims remain higher than average.

3. Mortgage credit requirements are strict; this keeps some would-be buyers from qualifying for a home loan.

These factors are offset by high demand for homes and short supplies of available homes and developed lots in some areas. 

Recent News

Leagan Realty


12862 East Summit Drive
Scottsdale, Arizona 85259
Phone: 480.766.2115

Email: lisaeagan@leaganrealty.com