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Upsizing! Finding the Home of Your Dreams!

by Melissa Thompson

We hear a lot about people downsizing and simplifying, but if you are looking for a larger home, now is a great time to sell your smaller home and move up to something that better suits your wants and needs.  Perhaps you have a growing family and need more space, or an additional income-earner has joined your household or maybe you have enough equity in your current home that you can now afford your dream home. Whatever the reason, movin’ on up is an exciting prospect!

Ok, now let’s contain that excitement a bit and think about what it means to purchase a more expensive house.  First, just because you can afford something on paper, doesn’t mean you should commit all your resources to the most expensive property on your radar.  It would behoove you to take a thorough look at your current budget and then play with the numbers a bit to determine how much more you’re willing to spend each month on a higher mortgage payment.  A dream house is wonderful, but being house-poor is not.  Think about your lifestyle and don’t make the mistake of getting into a financial bind that doesn’t allow you to do the activities you enjoy.

When financing your new home, you have a couple of options.  If you haven’t sold your current home yet, you can choose a Home Equity Loan or a Bridge Loan to make the down payment on the new home.  A home equity loan allows you to borrow against your current home’s equity and is usually less expensive than other loans.  A bridge loan is a short-term loan that is used until you can obtain permanent financing.  Because they are short term, the interest rates on them will be relatively high.

Before you put your house on the market and commit to purchasing a new one, educate yourself about the prices of houses in the areas where you will be selling and buying. Whether it’s a buyer’s market or a seller’s market, a professional Realtor will be able to assist you in navigating the process.  The goal is to sell high and buy low, and in today’s market that is an achievable dream!

Are you ready to move up into your dream home?  If so, contact Melissa Thompson at Your Key to Memphis or call her at 901-756-8900 and let her assist you in your home search today!

Don’t Get Blindsided by Unexpected Expenses!

by Melissa Thompson

Buying your first home is exciting.  After getting approved for a mortgage loan, working with a professional realtor and finding your dream home, it’s time to settle in and start enjoying your new digs.  Then BAM!  The shock of an unexpected expense slaps you in the face.  Don’t let that happen to you.  Being informed about the possible expenses of being a homeowner will not make spending the money any more fun, but at least you will be prepared.  Here are some ancillary costs of homeownership that you should be aware of:

  • CLOSING COSTS - When closing on your mortgage you will be presented with a long list of costs: mortgage taxes, lender application fees, attorney’s fees, title insurance, recording fees and any potential real estate tax reimbursements if the seller has paid them up front.  Altogether, closing costs are an average of 2 to 5 percent of the total cost of the home.  They will vary state to state.  Closing cost information for Tennessee can be found here: Tennessee Average Closing Costs
     
  • HOME MAINTENANCE - Now that you are a homeowner, you are solely responsible for the maintenance and upkeep of your property.  Everything from yardwork to cleaning; pressure washing to clearing the gutters…it’s all in your hands and on your dime.  Oh…and fixing things.  Yeah.  When the AC isn’t working or there is a leaky faucet, you will be footing the bill for repairs.  This all sounds a bit scary, but the key is to be prepared.  Go into your home purchase knowing that you will likely be spending about 1% of the purchase price of your home on maintenance annually.
     
  • PROPERTY TAXES - Property taxes vary by state and can also vary based on city, ordinance, and even specific house.  You can utilize a Property Tax Calculator  to get an idea of what your taxes will be when planning for your expenses.
     
  • UTILITIES - If you’re coming from a rental where your utilities were included with the rent, you may not have considered how much you will need to set aside to pay for electricity, gas, water and sewage costs.  Added to internet, cable and phone bills, it can be quite a chunk of change.  Planning for utility costs is crucial to making sure you can afford to live in a home of your own.
     
  • HOMEOWNER'S INSURANCE - When you get a mortgage, you must get homeowner's insurance as well.  Be sure to do your homework and shop around for the best possible price.  You can get discounts for things like security systems, working from home or bundling coverage for your home with your auto insurance policy.  Educate yourself on what your insurance policy covers so that you’re not left disappointed when you must pay for something you thought would be taken care of.

Don’t let these expenses scare you off from purchasing a home.  Again, the key is to be aware of them going in so that you won’t be caught off guard when they come up.

If you are ready to purchase your first home, let professional Realtor Melissa Thompson  assist you in your home search. Give her a call at 901-729-9526 today!

Photo Credit: moneyweek.com

Guide to Buying a Home - Summer 2018

by Melissa Thompson

Purchasing a home is likely the largest financial commitment you will ever make. It’s not one to be taken lightly. But while it can be overwhelming and a little scary, it is also smart.  Owning a home is an investment in your future, and with that in mind, you want to make sure that you are making educated decisions so that you get the best deal possible.

Summer is a popular time for home shopping. But before you start your home search in earnest, it’s vital that you understand what the real estate market is like for buyers right now.  While existing home sales and list prices have risen this year, there are still perks to starting your home search. These tips will help you get the most out of the 2018 summer housing market!

  • Prices sometimes drop during summer.

While summer is a busy home-buying season, it’s not nearly as busy as spring. Because of this, prices may drop between May-October.  Waiting until late August may mean that you can snag a sweet deal! The Best Time to Buy a Home is in August & September

  • PMI is getting more affordable.

Private Mortgage Insurance is getting cheaper with PMI lenders MGIC and Radian having lowered their rates this spring.  That means other PMI companies will become more competitive, which will bring all of them down.  With PMI required when homebuyers put less that 20 percent down, lower rates mean that purchasing a home will be affordable for more home buyers.

  • Don’t discount older listings.

Don’t make assumptions about houses that have been on the market for a long time.  There are many reasons why a house may not sell quickly.  Often if might just be due to a buyer getting cold feet and pulling out on a deal, or perhaps financing fell through. That doesn’t mean it’s a “bad” house.  And remember…if it’s been on the market awhile, the price is likely to come down, meaning you will get a better deal!

  • Consider a fixer-upper.

Flexibility on your part is a must in a busy market.  You may have been dreaming of a sparkling, move-in ready home, but a fixer-upper could possibly be the dream house you’ve really been looking for.  There is definitely more to choose from if you’re willing to take on a fixer-upper.  The number of starter homes on the market is shrinking, but there are more fixer-uppers among them than there were six years ago.  Choosing a fixer-upper will also give you more time for decision making.  Move-in ready homes go quickly and competition for them is fierce, so if that’s what you want you are going to have to be prepared to move quickly!

  • Get to know the neighborhood.

When the market is competitive, it’s tempting to make an offer on any property that appeals to you.  This can be misguided if you haven’t even checked out the neighborhood.  If you end up in a great house in the wrong neighborhood for you, it will never truly feel like home.

  • Make a good offer.

Now is NOT the time for a low-ball offer.  But keep in mind that the strongest offer is not necessarily the highest one.  If you have the funds available, a lower cash offer can often win out over a higher one that is being financed.  Of course, coming up with that kind of money may not be feasible, but there are other ways to strengthen your offer without upping the amount.  Generous contingencies, like a shorter closing or inspection period or Writing a Winning Offer Letter can also help you stand out to sellers.

If you are considering buying or selling a home this summer, call Melissa Thompson at 901-729-9526 and let her help you with all your real estate needs!

Photo Credit: realestateclipart.com

Surviving Moving Day - All the Essentials You’ll Need

by Melissa Thompson

You’ve closed on your new home and it’s time to move in!  This is an exciting time but can also be a bit stressful.  Where do you even begin?  A good place to start is to create a moving day survival kit for yourself. It should include anything and everything that is important or of great value to you and should stay with you and not go with movers. Here is a list of “must have” items to make your move as organized and stress-free as possible:

 - Toilet Paper.  At least a few rolls. Trust me on this one.

 - Pain reliever and all your medications.  You don’t want to be searching for these necessities, so make sure they are easily accessible.

 - Toilet Plunger.  Yes, really. Especially if your new place only has one bathroom. Better safe than sorry!

 - Cash for tipping your movers. Tipping Movers

 - A Multi-Tool.  While having a whole tool box handy would be great, there is only so much you can (and should) fit into your survival kit.  Something like a Leatherman will provide you with a way to open boxes and other small tasks…and it will fit in your pocket!

 - Trash Bags.  And clear recycling bags.  Look up where you can recycle locally and have the address in your phone so you can take packing boxes/materials there after you unpack.

 - Power Strip and Mobile Phone Charger.  There is nothing worse than discovering your phone is dying and you have no idea where your charger is!  The power strip will come in handy because you will probably clear one small area and can plug in your electronics, a lamp, a coffee pot, etc.…

 - Personal Hygiene Items.  Pack an overnight bag with your toothbrush, toothpaste, deodorant, soap, shampoo etc.  That way, when you are ready to call it a day you can jump right in the shower without having to search through boxes for them.

 - All Purpose Cleaner and a Roll of Paper Towels (or two). Hopefully move-in day won’t be cleaning day, but you never know.  Be prepared.  Even if the house looks clean, you are going to want to wipe down the toilets, sinks and counters.

 - Bottled Water and Granola Bars.   You are going to be hungry. And tired.  Have water and snacks on hand to get you through the day.  Look up some Take Out Restaurants and have their numbers in your phone so you can have food delivered.

 - First Aid Kit.  Well, at least a box of Band-Aids in case you cut yourself opening boxes.

 - Note Pad and Pen.  Because you WILL come up with a list of things you need and need to do as you are unpacking and you will want to write them down so you don’t forget.

 - Scented Candles or Air Fresheners.  Even the cleanest house will smell a little musty if it has been closed up for a while.

 - Flashlight.  Some rooms won’t have overhead lights and if you haven’t unpacked the lamps yet, a flashlight will come in handy.

As long as you have the essentials, you can take your time Making Your New House a Home.   And if you haven’t found your dream home yet visit Your Key to Memphis and start your search today!

Photo Credit: pinterest.com

Things to Look for When House Hunting: A Top Ten List

by Melissa Thompson

House hunting can be overwhelming sometimes, especially for first-time home buyers.  Chances are you might get caught up in the process and important details might slip by you. While the number of rooms, condition of the kitchen, and size of the yard are important, there are other things to consider before you make an offer.  This list of things to look for can help get your search off to the right start.

Location, Location, Location

They say that the 3 most important things to look for when buying a home are location, location and location.  While a home might not be perfect, loving your neighborhood and neighbors can make all the difference in living with imperfection.  And face it…you can change almost anything about your house, but you can’t change its location or the people living nearby.  When you go house hunting, make sure to consider the home’s proximity to your work, the appeal of the neighborhood, where in the neighborhood the home is situated, ease of access, noise from neighbors, traffic, pets and access to parks, shopping, schools and public transportation.

Home Placement

Beyond location, look at how the home is situated.  If the home is on a hill does it have a view, a walkout basement, or lots of stairs to climb? Do neighbors' windows look directly into the home? Is the yard suitable for kids, pets, gardening, or other uses? Is their safe access to the home? These are all important questions to ask yourself when determining if it is the right property for you.

Check Out the Neighborhood

While it’s important for your house to meet your expectations, it’s equally important that the neighborhood meets them too. Take a drive around the development you are interested in on week days and weekends, during the day and in the evening.  Are the homes in good repair? Are yards kept clean and tidy?  Is the neighborhood safe enough for people to walk, run or bike?  Are there children playing outdoors?

Consider a Home’s Curb Appeal

You want a home that is going to reflect your lifestyle. Do you live a casual, laid-back life? Then you probably won’t want a formal Victorian or Tudor style home.  A simple, contemporary home might better suit you.  Pay close attention to exterior features.  Think about maintenance.  For example, a brick home is easier to maintain than one with siding.  Do you like working in the yard?  If not, you might not want a house with extensive landscaping.  Is the roof in good condition?  Attention to detail will help you choose the home with the best curb appeal for you.

Size and Floor Plan

You may be thinking about buying your dream home. But is your dream home practical?  Do you need 4 bedrooms and 4 baths when you live alone? A spacious home may provide the extra room you've always wanted for a home office or a theater room, but you'll pay higher heating bills and have higher taxes. Additionally, it will take more furniture to furnish and money to decorate. Think about how the new home space will be used and whether it will fit your lifestyle now and in the future.

Bedrooms and Bathrooms

Decide how many bedrooms and bathrooms you will need and only look at homes that meet that criteria.  You don’t want to fall in love with what is otherwise a perfect house if it doesn’t provide the space needed for your family.  It’s smart to consider counting an extra bedroom in that number so that you have additional space for a home office or guest room. If you think you might add on to the home later, make sure you consult an architect who can advise you on space planning and regulations.

The Kitchen

For many people, the kitchen is the heart of the home. Don’t settle for a home with a kitchen that doesn’t work for you.  Yes, you can remodel later, but at great expense.  If it’s an easy fix like replacing cabinets or countertops, get a price quote before committing the house so that you will know if it is within your budget to take that on.

Closets and Storage

Older homes often have small closets and lack storage space.  As you’re looking at a home ask yourself where you will store your belongings.  Tiny closets don’t have to be a deal breaker.  There are ways to maximize storage without renovations. Newer homes tend to have lots of storage and you may sacrifice living space while having more closet space than you need.

Windows and Lighting

While looking at a home keep in mind your preferences regarding light and privacy.  Do you want a lot of windows to provider bright, sunny rooms?  Pay attention to the locations of electrical outlets and fixtures to make sure they will meet your lighting needs.      

Finishing Touches

Even a simple home can look spectacular with the right moldings, hardware, and a fireplace.  If elements like these are important to you, look for them while house hunting. 

You may not find everything you want in one house, but keep this list handy and you are more likely to find the home that best suits your needs and desires.  Better yet, let Melissa Thompson and her Team at Your Key to Memphis help you find your dream house today!

Happy House Hunting!

Photo credit: gorenter.com

How Much Do You Need to Make to Buy a Home in Your State?

by Melissa Thompson

It’s no mystery that cost of living varies drastically depending on where you live, so a new study by GOBankingRates set out to find out what minimum salary you would need to make in order to buy a median-priced home in each of the 50 states, and Washington, D.C.

States in the Midwest came out on top as most affordable, requiring the smallest salaries in order to buy a median-priced home. States with large metropolitan areas saw a bump in the average salary needed to buy with California, Washington, D.C., and Hawaii edging out all others with the highest salaries required.

Below is a map with the full results of the study:

GoBankingRates gave this advice to anyone considering a home purchase,

“Before you buy a home, it’s important to find out if you can afford the monthly mortgage payment. To do this, some financial experts recommend your housing costs — primarily your mortgage payments — shouldn’t consume more than 30 percent of your monthly income.”

As we recently reported, research from Zillow shows that historically, Americans had spent 21% of their income on owning a median-priced home. The latest data from the fourth quarter of 2017 shows that the percentage of income needed today is only 15.7%!

Bottom Line

If you are considering buying a home, whether it’s your first time or your fifth time, let The Melissa Thompson Team help evaluate your ability to do so in today’s market! 901-729-9526

By: KCM Crew

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Homeowner’s Insurance: The Basics

by Melissa Thompson

Becoming a homeowner for the first time can seem like a daunting task. There are so many details and many first-time homebuyers don’t know all the ins and outs of homeownership. It’s important to educate yourself and be prepared for what’s to come.  One aspect of being a homeowner is paying homeowner’s insurance. 

To understand how you pay for homeowner’s insurance, you need to understand your monthly mortgage payment and how it breaks down.  There are four parts to you mortgage payment: PITI.  This stands for principal, interest, taxes and insurance.  The insurance part of your payment can vary depending upon your loan type.  There are some insurances that are required when you obtain a mortgage, and others that are not.  It’s up to you to decide what you need and to do so, you need to understand what they cover.

Private Mortgage Insurance (PMI) will usually be required if you are putting down less that 20% on your home purchase.  But not all loans require PMI.  For example, a VA Loan does not require the borrower to pay PMI. It is replaced by an upfront VA Funding Fee.  Even if you are required to purchase PMI, once you have 20% equity in your home, it can be dropped.

Homeowners insurance is another requirement of getting a mortgage loan.  This is the insurance that protects your home in the event of fire, theft, or damage.  Depending on the insurance you choose, you may be covered for things like stolen jewelry and stolen or damaged electronics and/or furniture.  You must be able to provide proof of insurance to your lender before closing on your home.  This insurance not only protects you as the homeowner, but it also protects the lender in case of foreclosure or in the event of a disaster.  It is common for the lender to require you have at least enough insurance to cover the cost of rebuilding the home.

Another requirement is that you purchase Title Insurance.  This insurance protects you by providing proof of legal ownership should someone else try to claim ownership of the property.  Should a title dispute arise resulting from a sale, the title insurance may be responsible for paying specific legal damages, depending on the policy you have.

There are additional insurances that are not required by your lender, but you may want to consider them for more protection.  Personal property insurance may cover personal belongings that your homeowner’s insurance does not cover, like art, collectibles, and firearms.  A home warranty is not insurance, but does offer further protection should something break. For example, you might want a home warranty for your HVAC system to cover the cost of service should it need repairs.  Purchasing additional insurance or a home warranty is a personal choice. You can talk to your mortgage banker and insurance agent regarding your options.

If you are interested in purchasing a home, the professionals at Your Key to Memphis can help you find your dream home and answer any questions you may have.  Contact Melissa Thompson and her team at 901-756-8900 or 901-729-9526 and start your home search today!

Down Payment - What You Need to Know About Using a Monetary Gift

by Melissa Thompson

Coming up with the money needed for a down payment on a house is not easy for many people.  Some are lucky enough to have someone (or several people) give them cash as a gift to go towards purchasing a home.  No doubt, that is a wonderful thing!  But there are guidelines that must be followed when using financial gifts for your down payment.

Using gifted funds to buy a home is not as simple as it sounds.  First, the money can’t come from just anyone.  Lenders want the money to come from a family member, such as a parent, grandparent or sibling.  You can also receive gifts from your spouse, domestic partner or significant other if you’re engaged to be married.

You may or may not be able to use gifted money for your entire down payment. It depends on the type of loan you are seeking.  If you are taking out a Conventional Loan, all your down payment can come from a gift if you are putting down 20 percent or more.  If you are putting down less than 20 percent, you must include some money of your own.  With FHA and VA loans, the entire amount can be gifted unless your credit score is less than 620, in which case you will have to come up with 3.5 percent of the down payment yourself. No matter what type of loan you apply for, you can only use gifted funds to purchase a primary residence or a second home.

In addition to there being restrictions about who can give you money, you will also have to prove that the money is a gift.  You will need to provide a gift letter that includes the name of the donor, their relationship to you, the date and amount of the gift and a statement that says the money is given with no expectation of repayment.  Both you and the donor must sign the letter. 

While it’s not necessary, it is a good idea to have the gift in your bank account prior to applying for a loan. That way when your lender looks through your bank statements for the previous few months, they will already see documentation of the gift.

If someone has given you money to go toward a down payment, Melissa Thompson can help you find your dream house.  Give her a call today at 901-729-9526!

Budget Friendly Curb Appeal

by Melissa Thompson

Looking to spruce up your curb appeal, but don’t want to spend a fortune?  There are lots of ways to improve the look of your home’s exterior without breaking the bank.  You might be surprised by how much difference small projects can make.

  • Paint the front door, trim or shutters.  With Exterior Paint costing about $30 a gallon, painting is an economical way to brighten up your house.  Choose a color that pops, yet compliments the overall color of the home.  Make sure to properly prep all surfaces before you paint so you’ll get great results that will last for years to come. 
     
  • Upgrade your mailbox. If your current mailbox is looking shabby and old, you can fix it up or replace it at minimal cost.  You can find new mailboxes for as little as $20.  When installing a new mailbox, make sure to follow guidelines set forth by the city you live in. 
     
  • Plant a tree.  This is a common and easy way to beautify your yard.  When choosing the tree, be sure to consider how big it will get to make sure it is a good fit for your space.
     
  • Replace exterior lighting.  This is an easy way to upgrade the style of your home.  Exterior light fixtures can be found anywhere from $20 and up.  You may also be able to find unique, Vintage Lighting at second hand stores and salvage shops.  Make sure that whatever you choose, they adequately illuminate your entryway and make it safer.
     
  • Install flower boxes.  If you want to add color to your exterior, but don’t to paint, this is the way to do it!  They can be installed on front porch railings or below the windows. Window boxes are relatively inexpensive or can be built and installed in no time.  Choose flowers and plants that are easy to maintain and that will keep away pesky insects so that you can enjoy spending time outdoors.

These small, simple improvements can make a huge difference in the curb appeal of your home. Also, if you’re thinking about putting your house on the market, you will make a great first impression on potential buyers! Let Melissa Thompson and her team of professionals help you get your house listed and sold.  Call them today at 901-756-8900.

Photo Credit: lowes.com

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A New Housing Bubble Forming…Not Before 2024!

by Melissa Thompson

A recent report by CoreLogic revealed that U.S. home values appreciated by more than 37% over the last five years. Some are concerned that this is evidence we may be on the verge of another housing “boom & bust” like the one we experienced from 2006-2008.

Recently, several housing experts weighed in on the subject to alleviate these fears.

Sean Becketti, Freddie Mac Chief Economist

 “The evidence indicates there currently is no house price bubble in the U.S., despite the rapid increase of house prices over the last five years.”

Edward Golding, a Senior Fellow at the Urban Institute’s Housing Finance Policy Center

 “There is not likely to be a national bubble in the way that we saw the first decade of the century.”

Christopher Thornberg, Partner at Beacon Economics

 “There is no direct or indirect sign of any kind of bubble.”

Bill McBride, Calculated Risk

 “I wouldn’t call house prices a bubble.”

David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices

 “Housing is not repeating the bubble period of 2000-2006.”

A recent article by Teo Nicolais, a real estate entrepreneur who teaches courses on real estate principles, markets, and finance at Harvard Extension School concluded that the next housing bubble may not occur until 2024.

The articleHow to Use Real Estate Trends to Predict the Next Housing Bubble, looks at previous peaks in real estate values going all the way back to 1818. Nicolais uses the research of several economists. The article details the four phases of a real estate cycle and what defines each phase.

Nicolais concluded his article by saying:

“Those who study the financial crisis of 2008 will (we hope) always be weary of the next major crash. If George, Harrison, and Foldvary are right, however, that won’t happen until after the next peak around 2024. 

Between now and then, aside from the occasional slow down and inevitable market hiccups, the real estate industry is likely to enjoy a long period of expansion.”

Bottom Line

The reason for the price appreciation we are seeing is an imbalance between supply and demand for housing. This has created a natural increase in values, not a bubble in prices.

Let’s the expert’s at The Melissa Thompson Team help you with all your Real Estate needs. 901-729-9526 or Melissa@YourKeyTomemphis.com. 

By: KCM Crew

YOUR HOMESEARCH STARTS HERE            FIND OUT WHAT YOUR HOME IS WORTH  

Displaying blog entries 1-10 of 111