Tag Archives: Mortgages

Life at Altitude – February 2022

Life at Altitude with Danielle Connor
February 2022

Second Home & High-Balance Loan Changes & What This Means For Our Market

I was going to write a “February Fun” post about winter home care tips and enjoying Summit in the Snow- that is until Lender Letter(LL-2022-01) came out on January 5th. This piece of (electronic) paper rocked the lending industry and is going to mean big changes for Buyers who are financing as soon as this month (February). So, just as brokers and lenders are shifting gears, I made the decision to do so as well. Read on to find out what’s coming down the Fannie & Freddie pipeline!

Loan-Level Price Adjustments (LLPAs)

It’s important to know what a Loan Level Price Adjustment is. Fannie Mae & Freddie Mac realized they were undercapitalized and overexposed a little too late in 2008 when the housing market collapsed. Since then, they’ve worked to assess their risk in lending and to adjust the cost of lending accordingly, hence LLPAs which now determine a borrower’s mortgage rate. Loans considered more risky, such as condos, second homes and investments, have higher interest rates than safer investments such as primary residences. It is important to note that LLPAs don’t apply to FHA, USDA, or VA loans. 

What’s Changing?

A glimmer of good news first: for those seeking affordable housing, Fannie & Freddie will no longer charge a high-balance LLPA for loans to first-time homebuyers with income less than or equal to 100% of area median income. This will continue to ensure the existing beneficial pricing treatment of programs like HomeReady, Home Possible, HFA Preferred, and HFA Advantage. 

And, the news you’ve been waiting for- pricing for second homes and high-balance loans is being revised for loans purchased on or after April 1, 2022. This revision will affect all lenders, credit unions, and mortgage brokers offering conventional loan products. Upfront fees for high balance loans will increase between 0.25 percent and 1.0 percent, tiered by loan-to-value ratio, and for second home loans, upfront fees will increase between 1.125 percent and 3.875 percent, again tiered by loan-to-value ratio. 

What This Means for Buyers

Starting sometime in February (because of the timeline in which real estate transactions close), the cost of obtaining your second home or high-balance loan can go up pretty substantially. A high-balance loan is one whose Loan-to-Value exceeds the current Conventional Loan Limit.

The  increase means that for borrowers to get the current market rate, which is already up to 3.75%, lenders will have to charge a second home buyer 3.375 points (an additional $3,375 for every $100,000 borrowed) for a loan with 20% down/80% financing.  If the loan then exceeds the Fannie Mae Conventional loan limit ($647,000) and is a Fannie Mae High Balance Loan, say $750,000, the High Balance LLPA also kicks in – up to 1.00%.  Therefore, the additional cost to obtain this mortgage would be 4.375 points, or $750,000 x 4.375% = $32,812 in extra/additional cost to get the market rate. 

Since we are already seeing rate increases, how far does a buyer’s money go with a loan at 3.5% interest versus a loan at 4.5% interest? In our example above, on a $750,000 home with 25% down, P&I goes from $3,300/ month to $3,800/ month, which is a $500 gap. For many buyers, this is the difference between being able to find a mountain retreat that they’re able to afford, and will likely discourage those buyers from even trying to enter the market.

What’s Next in Lending?

Local banks and credit unions are certainly going to try to take this opportunity to create portfolio loans which will offset closing costs for borrowers by charging a higher interest rate and lower points. Since portfolio loans stay in-house, rather than selling the loan onto the secondary mortgage market, the costs of lending associated with conventional loans won’t come into play, which is what will allow banks to do that. Buyers could benefit hugely from this. In the example above, a portfolio loan of an interest rate of 4% with 2.5 points instead of 3.75% and 4.375 points would be $18,750- a savings of about $14,000!

As for mortgage brokers? They are likely already working with their many lending institutions to navigate which loan products will be available that will help them stay competitive in our mountain market chock-full of second homes and investments. Nothing is set in stone yet, and I’m curious to see what becomes available- stay tuned!

What to Know When Going From Renting to Owning

6 Things Renters Should Know in Summit County: When They Go From Renting to Owning

1) Your mortgage can be less than your rent.  That is not always the case but with our extreme rentals rates it definitely can be the case for many people.  When you own a home you will be responsible for paying for your association dues if there are any.  This can affect the overall amount you contribute towards housing each month.
2) Your mortgage payments can fluctuate.  Your mortgage payment is typically made up of principal, interest, taxes and insurance. The biggest reason mortgage payments fluctuate is because taxes and insurance may change year to year.  Our taxes are mainly based on the value of your home.  The county and towns re-asses these values every two years so your payments may fluctuate then.
 
3) When you are buying a home, your lender probably can not count income from roommates.  Most lenders can only count income from a lease when you have a signed lease in hand.  You may not be able to get a lease signed until you own the home.  It’s a smart idea to make sure that you can handle the full mortgage payments on your own so you don’t find yourself in a tough situation.
4) You can buy a home with a friend or family member. Two friends can go in on a home together to make the purchase more affordable.  You would buy the home as “tenants in common.”  You would want to make sure you have a plan in writing for what will happen when one person wants to sell or move. You can also have a family member co-sign for you.
5) Plan to be at your new home for at least 2 years.  When renting, you may move to different areas more frequently.  Once you buy a home, you will want to occupy it as your primary residence for at least 2 years otherwise there can be greater tax implications.
6) You may need to abide by new rules.  When you own a home you need to ensure that you are complying with the rules and regulations of the neighborhood or complex.  On the upside, most owners are allowed to have pets where as it might have been a struggle to find a rental where you could have a pet.

How Millennials Make the Rent, and the Mortgage, in Denver

How Millennials Make the Rent, and the Mortgage, in Denver

Many are moving to the suburbs, which are getting an urban edge.

BY

There’s a land of jobs and money where the weather is fine, the air is crisp and the views are well above average.

It’s Denver, CO, and its recent discovery by millennials and retirees is starting to show in its housing prices.

“Before everybody started moving here, 686 square feet would only be like $700 or $720 a month,” said Brianna Maes Michel, a 27-year-old Denver native and hair stylist who now pays $1,200 a month for that much space. “Everything has gone up.”

The shift happened fast. Michel was paying $720 a month for an apartment in a better neighborhood just two years ago.

Mile-high rents

Denver has some of the hottest housing in the country, with home values up 14.5 percent to $326,300 over the past year, and expected to gain another 4.2 percent in the coming year. Home values have been growing faster than rents, which rose 9.7 percent in 2013 — and both far outpace gains in median household income, which rose a mere 2.6 percent that year.

That doesn’t mean rents are cheap. Even people migrating from more expensive cities are shocked.

Jorie Didier, a 27-year-old from Boston, bought her first house as soon as she moved to Denver rather than spend a penny on rent.

“I knew renting something the same size was going to cost twice as much, so I made the decision that it was in my best interest to buy a house and start building equity that way,” Didier said.

Like many millennials around the country, she moved to a suburb — Aurora — to save money. The arrival of these young adults on the outskirts of towns is turning some suburbs into dense, walkable areas with urban amenities.

The urban suburb

“They’re not the old suburbs,” said Zillow Chief Economist Svenja Gudell. “They’re not white picket fences and cul-de-sacs all around. [Millennials are] looking for suburbs that have redefined themselves.”

One such area is Stapleton, a neighborhood in Denver that’s far enough out of the city core to be considered a suburb by many locals. The former site of the city’s airport, it was built with urban values in mind. It has an abundance of parks, one of them spanning 80 acres, plus 46 miles of biking and walking trails, pools, community gardens and a growing number of restaurants, gyms and yoga studios.

“There are so many young families there that it’s easy for them to make friends,” said J. David Lampe, a real estate agent with RE/MAX Alliance in Denver.

Newcomers Luke and Cristine Bergman chose Stapleton to buy their first home — and with his business partner, to open his first restaurant, Concourse, a name that springs from the neighborhood’s history.

“It’s up-and-coming, and there’s even going to be a farmers’ market,” said Luke, who’s been a chef in South Beach and New York. “We’re going to be pioneers of cool restaurants out there.”

Videos by Sam McJunkin and Cameron Karsten

5 Home-Buying Mistakes That Can Sabotage Your Retirement

5 Home-Buying Mistakes That Can Sabotage Your Retirement

By
Daniel Bortz

William Howell/iStock

Buying a home is a major step toward building a solid, secure financial future—so whether you’ve made the plunge into ownership or are aiming to soon, you should pat yourself on the back! (This, of course, is not as easy as it seems.) And yet, in the race to settle into a place of your own, it can be easy to overextend yourself and cut corners on yet another important financial goal: saving for retirement.

Even if retirement is decades away for you, this subject nonetheless repeatedly tops the list of Americans’ economic fears in Gallup’s annual Financial Worry metric. But just because you buy a home doesn’t mean you can’t save for retirement, too. It’s a high-stakes balancing act, one where the right home-buying decisions will keep your retirement on track, and the wrong ones may throw you seriously off-kilter.

Here are some common retirement saboteurs to avoid.

Saboteur 1: Buying a house outside your price range

When you purchase a home, your retirement savings are on the line—even if it may not seem that way at the time.

“Housing is the biggest expense most people have,” points out Mary Erl, a certified financial planner and owner of Nest Builder Financial Advisors in Gurnee, IL. Hence, if you purchase a property that’s way outside your budget—and you’re forced to forfeit saving for retirement in order to make your mortgage payments—you’ve put yourself in a bind. A pickle, even.

And don’t just consider your current income, but your future income, too.

“People almost never take future earnings into consideration,” laments Joe Pitzl, a certified financial planner and partner at Pitzl Financial in Arden Hills, MN. “Younger couples get married, buy their first home based on their combined household income. But then when they start a family, one of the spouses leaves the workforce to raise the children and all of a sudden they’re bringing in a lot less money each month. That reduces how much money you can save for retirement.”

Saboteur 2: Draining retirement accounts for a down payment

While it’s tempting to borrow from your IRA or 401(k) to amass a down payment on a home, many financial experts say home buyers should do so sparingly, only as a last resort. IRAs and 401(k) plans are called retirement accounts for a reason—you’re not meant to touch the money until you’ve entered your golden years. If you borrow from either plan before age 59½, you’ll get slapped with a 10% excise tax on the amount you withdraw, on top of the regular income tax you pay on withdrawals from traditional defined contribution plans. Ouch.

Making early withdrawals also obviously prevents the money from accruing interest in these accounts. Put simply: Raiding the piggy bank before the money has matured can put a serious dent in your retirement savings, and many underestimate the repercussions.

“Withdrawing $5,000 from your IRA or 401(k) to pay for home repairs may not seem like a big deal,” Pitzl says. “But if you do so at age 30, that money would have grown exponentially over time if you left it in the account.”

Saboteur 3: Paying off your mortgage too quickly

While it sure sounds impressive to pay off your mortgage in three years, it’s not necessarily the best for your retirement. The reason: There’s good debt and bad debt. You want to pay off your credit card bill (bad debt) in full each cycle or you’re going to pay interest. Mortgage payments, though, work differently.

From a psychological standpoint, you probably don’t like owing a hefty sum to your lender. (We don’t blame you.) However, if you’re a younger homeowner with a new mortgage (good debt), it’s beneficial from a retirement savings perspective to make only the minimum monthly payments on the loan and invest the money where you can get a higher return.

For example, on a 30-year mortgage, at today’s interest rates, it makes more sense to put the money into an IRA or 401(k) than increase your mortgage payments, Pitzl says. “Don’t throw every penny you can at your mortgage debt,” he says. Granted, if you’re approaching retirement and are close to paying off your mortgage, it may make sense to up your payments if you want to retire debt-free.

Saboteur 4: Not saving for a rainy day

When asked about their emergency savings, an alarming 29% of Americans said they had none, according to a report last year by Bankrate.com. Nada. But without a sufficient emergency fund, you may be tempted to run up credit cards or tap your home’s equity or retirement accounts to pay for major repairs (new roofs don’t come cheap). And “if you get laid off, your mortgage payments don’t stop,” Erl says.

Therefore, make sure you have enough cash tucked away to cover six months of living expenses in the event you lose your job and budget 2% of your home’s value for annual maintenance (1% for newer homes), says Pitzl.

Saboteur 5: Waiting too long to downsize

Your $1 million McMansion may have made sense when your family of five was living under one roof, but if you’re heading into retirement, it’s probably time to downsize.

A common mistake, says Austin Chinn, a certified financial planner at Fountain Strategies in San Jose, CA: “People destroy their retirement savings by staying in their home so that they can have their kids move back in after they graduate college.”

Unless you’ve budgeted for a boomerang child, you need to do what makes sense for you financially.

“If you can move from a larger home to a smaller home and wipe out your mortgage, that’s a huge boost to your retirement,” says Erl.

Because crunching the numbers can be complicated, it can be helpful (and a huge relief) to meet with a financial planner to determine if a reverse mortgage makes sense for you (find one at Napfa.org).

Faces of Denver & Boulder: The Face of Mountain Living

Faces of Denver & Boulder

In recent years, Denver has made numerous appearances on lists featuring the best, most exciting places to live in the nation. So it’s no surprise that creative, forward-thinking entrepreneurs and professionals choose to call our city home. Meet some of the brains behind local businesses and leaders in various fields.

BY

The Face of Mountain Living

Revampt

summitskyranch.com | (970) 286-0202
PO Box 2984, 309-M Rainbow Drive, Silverthorne, CO 80498

Tom Everist, developer of Summit Sky Ranch, has been involved in Summit County through his six-generation family business since 1964. Now, this longtime businessman is developing Summit Sky Ranch on his family’s pristine parcel of Rocky Mountain wilderness in Silverthorne, just five minutes north of I-70.

“I envision a vibrant and inclusive community that brings families and their love for the outdoors together to enjoy quintessential Colorado living, and at the same time preserves the natural beauty of the spectacular Blue River Valley that my family has cherished for more than half a century,” said Everist.

Tom’s passion for developing Summit Sky Ranch comes from his belief that personal relationships are at the core of our lives, and the community is being thoughtfully designed to encourage social connectivity among families and neighbors. The Aspen House serves as the community’s social and recreation centerpiece offering everything from coffee to star gazing, yoga to outdoor swimming and more. In warmer weather, residents can kayak and paddleboard on the community’s private lake, and come snowfall they’ll enjoy Nordic trails, ice skating and sledding. Plus, miles of community trails connect to the White River National Forest for year-round enjoyment.

In addition to the thoughtfully designed amenities, the community’s mountain modern design stands apart from more traditional log cabin architecture in the area. With a variety of sizes and floor plans, all of the homes are contextually designed to complement the raw natural beauty of the land, featuring a natural palette and native materials such as wood, stone, granite and quartz. Built with extraordinary architectural design, this community centered development will bring families together to enjoy Colorado living at its finest.


More information on Summit Sky Ranch.

 

Non-Bank Servicers Creating Bigger Mortgage Problems

Non-Bank Servicers Creating Bigger Mortgage Problems

By
Catherine Curan

elenaleonova/iStock

It’s hard to find a more sympathetic foreclosure story than Kathleen Conrad’s.

The disabled widow of a Marine who served in Vietnam, Conrad, 66, lives in a rundown Westchester house the couple bought in 1999, realizing their modest version of the America dream.

But after her husband died in 2004, Conrad faced larger-than-expected cuts to her widow’s benefits. During the 2007 housing market boom, she took out a second mortgage from GMAC. In 2013, Conrad fell behind on payments and was contacted by her loan’s new owner, Infinite Customer Systems and the strong-arm tactics began to get Conrad out of the home.

Unlike big banks, non-bank servicers like Infinite are not bound by even the modest consumer protections built into the National Mortgage Settlement (NMS) of 2012.

Non-bank servicers are taking a page from their predecessors’ playbooks. Sources say that many of the same old problems the NMS partially sought to address are back with the nonbank servicers, including long delays in reviewing loan modifications and wrongful denials of loan modification requests.

While Federal Housing Finance Agency director Mel Watt is still dithering about whether to finally allow principal write downs to help troubled borrowers keep their homes, private investors who’ve already gotten a steep discount on distressed debt sold by government-sponsored entities are using hard-knuckle tactics with homeowners.

“The investors buying these loans are not interested in offering home-saving solutions to struggling homeowners,” said Jacob Inwald, director of foreclosure prevention at Legal Services NYC.

As government-sponsored enterprises including Fannie Mae sell delinquent mortgage loans to shore up their balance sheets and banks pull back on this market, private investors are muscling in. They range from small fry like Virginia-based Infinite Customer Systems to $60 billion Texas-based private equity titan Loan Star Funds. Loan Star is the backer of mortgage servicer and originator Caliber Home Loans, a major new player in New York.

After a flood of complaints about Caliber’s practices, Attorney General Eric Schneiderman opened an investigation last year. Loan Star declined to comment. A spokesman for the AG said the investigation is ongoing.

ICS’ Patrick Desjardins said he tried to reach a deal with Conrad before filing foreclosure. She halted the case by filing for bankruptcy protection, aided by foreclosure defense attorney Linda Tirelli. Earlier this month, a judge voided ICS’ lien, leaving the investor with worthless paper, and Conrad in her home.

“I don’t know where I would have [gone]” Conrad said. “That’s why I was fighting so hard to keep the house.”

Experts fear the new wave of investors will steamroll other vulnerable New Yorkers.

“We’re really concerned about the outlook,” said a spokesman for the Center for NYC Neighborhoods. “This is an unprecedented transfer of property ownership, accelerated by the distressed sales to non-bank servicers.”

Non-banks serviced 25 percent of the $9.9 trillion in outstanding US residential mortgages last year, against just 7 percent in 2012.

That’s according to a new Government Accountability Office report released last week by Sen. Elizabeth Warren (D-Mass.) and Rep. Elijah Cummings (D-Md.), who called for more oversight. This shift could lead to “harm to consumers, such as problems or errors with account transfers, payment processing, and loss mitigation processing,” the report said.

These new risks come as thousands of New Yorkers are mired in foreclosure. A new report from New Yorkers for Responsible Lending notes that as of last October, the state had nearly 90,000 pending foreclosure cases, half of which were filed in the previous 12 months. The crisis has bypassed wealthy enclaves of the city while ravaging low-income minority neighborhoods in Brooklyn, Staten Island and Queens.

Income Properties in Summit County

Income Properties in Summit County

Summit county is a wonderful place to buy a vacation home, but is it a good place to buy an income producing property? The answer to that question can be very tricky.  With prices on the rise, it is becoming more and more difficult to purchase a property that will actually make money.  When I speak with clients, I often advise that it is possible to cover your costs by renting your home but you have to be able to prioritize that over your desires sometimes.
When looking at a home to purchase it’s very important to balance your monthly carrying costs with the rental potential.  HOA’s can be one of the biggest factors that prevent you from being able to cover your costs.  If you compare a home that has a monthly HOA fee of $400 to another that has a monthly fee of $800, that means that you have to be able to generate $4800 more in rentals per year to be able to cover your costs.
Another factor to consider is what is included in your HOAs.  Heat tends to be the highest utility in our cold mountain climate.  Heat can be upwards of $200-$400 per month depending on your heating system.  When you have renters using your home, they are not as conscious about the cost of heating as you would be so expect them to leave the temperature higher than you may personally.  If your HOA does not include heat, your carrying costs will be much higher.  Renters also expect cable and internet so those can be around an additional $100 per month if your HOA does not include them.
Location is one of the biggest factors that determine the amount of rent you achieve.  A ski-in/ski-out home will always achieve more in annual rent than somewhere that requires you to drive to the ski resort.  Of course this will come with a premium price so you will have to factor that in.  Also, the number of people that your home will sleep is a big factor.  Don’t confuse the number of people with the number of bedrooms.  Often a 2 bedroom with good sleeping solutions will rent just as well as a 3 bedroom that sleeps the same number of people.  Surprisingly 1 bedrooms and studios do extremely well in our market here in Summit County.
When you rent your home also makes a huge difference.  Of course you are buying a vacation home because you want to be able to use it too.  However, if you think you want to use your home on major holidays, you can expect to loose out on a huge amount of revenue.  Christmas is one of the biggest revenue generating times of the year so if you are tempted to use it during that time just be aware of the income you may be loosing out on.
Last but not least, the way that you handle your rentals will make a huge difference.  If you want to hand the keys over to a professional management company and have them do all of the work, expect them to take 30%-40% of your gross rentals.  That will severely cut into your ability to cover your costs.  If you want to cover your costs or even make a little money, it is going to take work.
Keep in mind that if you were just going on vacation frequently that you would be spending money on hotels every time. (That could be spending upwards of $5,000 a year if you are coming up monthly.)  If you are buying a vacation home, you may not be able to cover 100% of your costs, but even if you are putting $5,000 of your own money into your home each year, you are still in a better position than just spending that money on hotels.  You are building equity into your home every year you own it.  No one can predict exactly what the real estate market will do, but chances are when you go to sell your home in the future, you will make a profit.  Not to mention that when you are on vacation, you always have a place that feels like home!
By
Anne Skinner

Can Cash Offers Get You A Better Deal?

You’ve heard the old adage that seller’s love cash offers.  Why does a cash offer matter and can you get a better deal purchasing with cash?  
Cash offers allow the buyer to waive a lot of the financing contingencies.  What does this mean?  It means that you don’t have to have a bank approve the purchase of your new home. This is important in a competitive market because you can often close the deal much faster.  It also means that the home does not have to undergo an appraisal.  The buyer can choose to waive the appraisal when buying with cash whereas this is not usually an option if you choose traditional financing. From a seller’s perspective, these are advantages.
However, if you are trying to buy a home with cash in a competitive market, a seller will often ignore a low ball offer even if it is a cash offer.  In a market where there are not multiple offers on a home, you may be able to negotiate a better of a deal, but don’t expect it be much better than if you were using traditional financing.
When it all boils down, cash makes a home purchase easier.  It can move along more quickly and have less hiccups from the bank.  However, many people don’t have the option of purchasing a home with cash.  There are many wonderful lenders out there who want to work for you and help you in every way possible.  Don’t hesitate to investigate all of your options and know what is available to you.  You never know if you will qualify for a purchase until you speak with a lender.  You may also surprise yourself and qualify for more than you thought you would.
By:
Anne Skinner

The 6 Worst Homes for First-Time Buyers

Angela Colley at Realtor.com has outlines which type of first-time homebuyers you shouldn’t be. If you’re ever unsure about any step in the home buying process never hesitate to ask your realtor.


The 6 Worst Homes for First-Time Buyers

By
Angela Colley

Deciding to buy your first home is a little scary. Looking for a home is anxiety-inducing. But actually making an offer? That’s a whole different level of panic. Are you choosing the right one? What if you buy this home and the perfect place comes on the market a week later? What if you end up hating the place in a year?

Unfortunately, there isn’t a one-size-fits-all formula for first homes. (If there were, we’d tell you.) And no, we can’t totally destress the process (buying a house is a big deal, after all). But we can help you avoid the biggest mistakes. And, as it turns out, some homes just aren’t right for the average first-time buyer. Go ahead and take a look.

1. The one that’s a little too ‘cosy’

You may not have children when you buy your first house. You may not even be planning on children. But those plans could change in the next five to 10 years, and that tiny two-bedroom historic bungalow you’ve been eyeing may go from just right to clown-car small.

“If you are recently married and plan to start a family, do not buy a two-bedroom home. Unless you bunk the kids together, you will be moving once the second child comes along,” says Seth Lejeune, a Realtor® with Berkshire Hathaway HomeServices in Collegeville, PA. “Three is generally a good average. If you end up staying there longer than expected, you can start a family and still be comfortable.”

2. The bloater

On the flip side, you shouldn’t just get the biggest house you can qualify for, either. Five bedrooms might make sense for you in the future, but if it’s just you and your partner now, you probably won’t need those other four bedrooms for years. In the meantime, you’ll be carrying a much larger mortgage than you need—or possibly can handle.

“There’s almost nothing worse than buying more house than you need and having a reminder come in the mail every month as you scrounge to make payments,” Lejeune says.

3. The money pit

You might be tempted to buy an older fixer-upper—after all, you’ve watched so much HGTV you could give Bob Vila a run for his money—but be careful how much rehab you take on.

If the home needs one or two biggish projects and a handful of small weekend jobs to get into perfect condition, you might come out ahead. But if you can spot a dozen problem areas now, you may end up going broke trying to repair that place.

Instead, opt for a fixer-upper with an end in sight.

“I generally advise people to keep it simple—like kitchens and bath upgrades,” Lejeune says.

4. The weekend stealer

Is the front lawn a tropical garden? Does the house have a swimming pool out back? Is there a huge vegetable garden that needs tending? Those features might look great now, but do you really want to spend every weekend maintaining your home?

“Pools, hot tubs, elaborate landscaping, etc. are great in theory, but all require maintenance,” Lejeune says.

If you’re not up for the challenge, move along.

5. The dream crusher

In an ideal world, you’ll live in your first home for a while, maybe make a few improvements, and sell it for a profit later so you can upgrade to an even more awesome pad.

But that doesn’t mean you should look at every home for its investment potential.

Sometimes your tireless home improvements won’t mean much to the next buyer. And sometimes that home simply isn’t going to go up in price, no matter what improvements you make.

“If you make a row home in the worst part of the city into the Taj Mahal, you’re never gonna get that money back,” Lejeune says.

If your only reason for making an offer is what you might get out of it after you sell it, consider the market very, very carefully before you make the plunge.

6. The doorbuster

If you’ve found a really good deal on a home, go ahead and pat yourself on the back for being a regular real estate pro. But then stop and ask yourself why the deal’s so great. Is the location a bit gritty? You might save big bucks in the beginning, but there also might be big problems if and when you try to sell the home later on.

“I would advise that you pick [a locale] with a strong school district and a fiscally sound municipality,” Lejeune says.

Even if you don’t plan on having children, or you don’t care if a neighborhood is a little rough around the edges, future buyers might—and that means you may be forced to offer the same discount you got when you bought the house. And nobody wants their decisions as a first-time buyer to come back and haunt them as a first-time seller.

Homebuyer Education Class April 19th

“The Summit Combined Housing Authority serves to enhance this county by helping those who define our community attain a safe, long-term housing solution and build a community in which to thrive.”

Danny and I took the Homebuyer Education Class before we bought our first home and found it was very helpful.  In addition, if you are looking at programs like Deed Restricted Housing or Mortgage Credit Certificates, I believe that this is mandatory before you can qualify. Be sure to check out this course which is open and free to public if you sign up.

The Summit Combined Housing Authority presents their next FREE Homebuyer Education Class on:

Tuesday April 19th
8:30-1:00 pm
Buffalo Mountain Room, Frisco County Commons

To Sign Up: Email VickieL@summithousing.us or MichelleL@summithousing.us