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Now is a Great Time to Move Up to Your Dream House!

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, an experienced 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!  Call Melissa Thompson at 901-729-9526 and let her help you find your dream home today!

Singles Are Falling for Their Dream Home First

by Melissa Thompson

Some Highlights:

  • According to NAR’s Profile of Home Buyers & Sellers, the share of recent homebuyers who were single at the time of purchase held steady at 24% last year.
  • The percentage of first-time buyers who were single females rose to 17% (up from 16%), as the share of single men dropped from 11% to 8%.
  • The primary reason for buying a home amongst singles was the desire to own a home of their own (38% for women and 37% for men).

​​Contact your local expert’s at The Melissa Thompson Team 901-729-9526 to find out if you qualify to buy your dream home! 

By: KCM Crew

What Would You Sacrifice to Save For Your Next Home?

by Melissa Thompson

Some Highlights:

  • 95% of first-time homebuyers are willing to sacrifice to make homeownership a reality.
  • The top item that buyers sacrifice is new clothes, at 54%.
  • Even repeat or experienced buyers say they sacrificed taking a vacation or buying a new car to buy their last home.

Contact Melissa Thompson at Your Key To Memphis to find your dream home today! 901.729.9526 or [email protected]

 

 

Four Reasons to Buy a Home Now!

by Melissa Thompson

You may be wondering if this is the best time to buy a home.  Spring is a busy time in general for real estate transactions and right now it’s a seller's market, meaning supply is low and demand is high. But the truth is, there are always excellent reasons to buy a house, regardless of market activity.

First, buying is cheaper than renting. The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The report reveals that:

“Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation…Nationally, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.”

Another benefit of homeownership is that it forces you to save money. The financial commitment you make when you buy a home means that your monthly housing cost must be paid, no matter what.  When you take on this responsibility, it may inspire you to be more frugal and to save more.

Tax deductions are also a perk of owning a home. There are many tax advantages, including (but not limited to) reducing your taxable income by deducting interest paid on a home mortgage and deducting property taxes paid.

Finally, experts expect home price appreciation to continue. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

Over the next five years, home prices are expected to appreciate 3.22% per year on average and to grow by 17.3% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

The bottom line is that buying a home now will prove to be a sound financial decision for years to come. Don’t wait!  Contact Melissa Thompson at Your Key To Memphis to find your dream home today!

Financial Planning: 4 Reasons to Buy a House Today

by Melissa Thompson

Financial Planning: 4 Reasons to Buy a House Today | Keeping Current Matters

Homeownership will always be a part of the American Dream. There are advantages to owning your own home (educationalhealthsocial) that far transcend any economic impact. However, we want to look at several of the financial advantages of homeownership in today’s post.

1. Buying is Cheaper Than Renting

The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The report reveals that:

“Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation…Nationally, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.”

2. Homeownership “Forces” You to Save

According to SavingAdvice.com, homeownership is a great way to save. Their advice is quite simple:

“Homeownership is a “forced” savings account because you own the home, you have no choice – that monthly housing cost has got to be paid no matter what…Homeownership can be an outstanding way to force yourself to be more frugal in the rest of your spending so that you can save and build equity in your home.”

3. Homeownership Offers Several Tax Deductions

According to the Tax Policy Center’s Briefing Book -“A citizen's guide to the fascinating (though often complex) elements of the federal Tax System” - there are several tax advantages to homeownership. Here are three:

  1. Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage.
  2. Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes.
  3. Taxpayers who sell assets must generally pay capital gains tax on any profits made on the sale.

4. Experts Expect Home Price Appreciation to Continue

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

Over the next five years, home prices are expected to appreciate 3.22% per year on average and to grow by 17.3% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

Bottom Line

Some are afraid that home values may have already peaked. However, we believe that purchasing a home now will prove to be a sound financial decision for years to come. As Warren Buffet said, “When others are greedy, be fearful. When others are fearful, be greedy.”

Learn more about buying Memphis Real Estate at yourkeytomemphis.com. 901.729.9526 or [email protected]

 

Tax Return Depressing? Owning a Home Could Help

by Melissa Thompson

Tax Return Depressing? Owning a Home Could Help | Keeping Current Matters

Many Americans got some depressing news last week; either their tax return was not as large as they had hoped or, in some cases, they were told they owed additional money to either the Federal or State government or both. One way to save on taxes is to own your own home.

According to the Tax Policy Center’s Briefing Book -“A citizen's guide to the fascinating (though often complex) elements of the federal Tax System” - there are several tax advantages to homeownership.

Here are four items, and a quote on each, from the Briefing Book:

1. Mortgage Interest Deduction

“Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage. The deduction is limited to interest paid on up to $1 million of debt incurred to purchase or substantially rehabilitate a home. Homeowners also may deduct interest paid on up to $100,000 of home equity debt, regardless of how they use the borrowed funds. Taxpayers who do not own their home have no comparable ability to deduct interest paid on debt incurred to purchase goods and services.”

2. Property Tax Deduction

“Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes.”

3. Imputed Rent

“Buying a home is an investment, part of the returns from which is the opportunity to live in the home rent-free. Unlike returns from other investments, the return on homeownership—what economists call “imputed rent”—is excluded from taxable income. In contrast, landlords must count as income the rent they receive, and renters may not deduct the rent they pay. A homeowner is effectively both landlord and renter, but the tax code treats homeowners the same as renters while ignoring their simultaneous role as their own landlords.”

4. Profits from Home Sales

“Taxpayers who sell assets must generally pay capital gains tax on any profits made on the sale. But homeowners may exclude from taxable income up to $250,000 ($500,000 for joint filers) of capital gains on the sale of their home if they satisfy certain criteria: they must have maintained the home as their principal residence in two out of the preceding five years, and they generally may not have claimed the capital gains exclusion for the sale of another home during the previous two years.”

Bottom Line

We are not suggesting that you purchase a house just to save on your taxes. However, if you have been on the fence as to whether 2017 is the year you should become a homeowner, this information might help with that decision. Contact The Melissa Thompson Team today to start your home search! 901-729-9526 or [email protected] 

Disclaimer: Always check with your accountant to find out what tax advantages apply to you in your area.  

Home Prices Up 6.15% Across the Country!

by Melissa Thompson

Some Highlights:

  • The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
  • In the report, home prices are compared both regionally and by state.
  • Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!
  • Alaska, Delaware, West Virginia & Wyoming were the only states where home prices are lower than they were last year.

Learn more about buying or selling Memphis Real Estate at yourkeytomemphis.com. 901.729.9526 or [email protected]

 

 

Don’t Let Your Luck Run Out...

by Melissa Thompson

Don’t Let Your Luck Run Out [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • The “Cost of Waiting to Buy” is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.
  • Freddie Mac predicts that interest rates will increase to 4.8% by this time next year, while home prices are predicted to appreciate by 4.8% according to CoreLogic.
  • Waiting until next year to buy could cost you thousands of dollars a year for the life of your mortgage!
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Learn more about buying or selling Memphis Real Estate at yourkeytomemphis.com. 901.729.9526 or [email protected]

 

When Is the Best Time to Buy a House: Right Now, or Wait?

by Melissa Thompson

You know you should buy a home. Eventually. But timing matters when it comes to such an enormous and potentially life-changing purchase. Which begs the question: When is the best time to buy a house? Does such a moment exist when all lights turn green, guaranteeing this is a decision you won’t regret?

While there’s no crystal ball in real estate, there are some fairly easy-to-read signs that a home purchase is something you should consider. Let’s dive into some of the factors that can influence whether the time is right for you to pull the trigger.

Your finances

For many people, knowing when to buy a home all comes down to the numbers. Here are the biggest pieces of that equation.

  • You have a down payment: If you need a mortgage to buy a home, you should know that most lenders will want you to show them the money—that is, have a sizable down payment. For most conventional loans, you’ll need to scrape together 20% of a home’s price, or $60,000 on a $300,000 home. Amassing that cash can be challenging, but know that some lenders can require as little as 5% down. You also may want to check into down payment assistance programs; many homeowners are surprised to find that they qualify.
  • You can afford a monthly mortgage: How much you can afford in monthly mortgage hinges on your income and debts. Higher income is good, of course; higher debt is bad. Check out a mortgage calculator for an easy way to plug in your salary and debts to see how much home you can afford in your area.
  • You have a good credit score: Your credit score is a measure of how well you’ve paid off past debts. Lenders look at this number to prognosticate how well you’ll pay them back, too. If you have no credit history, you should get some fast (lenders will want to see at least a year of payments under your belt). If your credit score is poor, you may want to do what you can to bring it up to snuff, because a higher credit score means you’ll stand to land a better loan.

Market conditions

Housing markets go through highs, lows, and bubbles—much like stocks. As such, you may be wondering whether current market conditions are conducive to buying (e.g., “Wow, you can buy a whole townhouse for under two hundred grand?”) or a total rip-off (e.g., “a two-bedroom for a half-million, seriously?!”).

Sadly, the adage for stocks applies to housing, too: It’s impossible to perfectly time the market. Yet there is still something to be said for considering economic conditions.

“You should never buy a home you can’t afford, but sometimes market conditions offer a little incentive to get off the sidelines,” says Mark Abdel, a real estate professional with Re/Max Advantage Plus in Minneapolis–St. Paul.  

You’ll want to consider the following:

  • Inventory: Look through listings for your area. If the majority of houses have been sitting on the market for more than six months, then the market is slow and prices should be OK. But if many properties get snapped up in months, or even weeks, this suggests you’re in a seller’s market—and that’s where buyer bidding wars could drive up prices. Of course, they could just continue to climb, or they may have peaked and go down. Local real estate agents can give you the lay of the land and their predictions, but just remember it’s anyone’s guess what could happen next.
  • Interest rates: Interest rates on home loans also fluctuate depending on market conditions. Currently interest rates are fairly low but have been inching up fast, which has many thinking of buying a home before they rise even higher. Make sure to check out interest rates in your area.
  • Renting vs. buying: A final factor to consider is whether it’s cheaper to own or rent, based on the market conditions in your area. You can figure that out with our rent vs. buy calculator.

Does time of year matter?

Conventional wisdom says to buy during the peak seasons of spring and summer, when there may be more options. But that also translates into more competition and potentially higher prices. That’s why you shouldn’t neglect fall and winter for home shopping, especially if the other conditions above line up.

“Buying off-season usually gives buyers more negotiating power for both the price and the closing date,” Abdel says, because off-season sellers are often more motivated to sell and therefore may be more willing to make a deal.

How long should you stay put?

Last but not least, one final factor to consider regarding when to buy a house is whether you plan to stick around. Buying a home carries a bunch of upfront costs, so it’s generally best you don’t sell soon after you’ve closed the deal. Typically home buyers should expect to stay in their house at least five years to make this investment worthwhile.

 

Learn more about buying Memphis Real Estate at yourkeytomemphis.com. 901.729.9526 or [email protected]

 

By and photo credit: Cathie Ericson, Realtor.com

The Impact of Homeownership on Civic Involvement

by Melissa Thompson

The Impact of Homeownership on Civic Involvement | Keeping Current Matters

The National Association of Realtors recently released a study titled 'Social Benefits of Homeownership and Stable Housing.’ The study confirmed a long-standing belief of most Americans:

“Owning a home embodies the promise of individual autonomy and is the aspiration of most American households. Homeownership allows households to accumulate wealth and social status, and is the basis for a number of positive social, economic, family and civic outcomes.”

Today, we want to cover the section of the report that quoted several studies concentrating on the impact homeownership has on the civic participation of family members. Here are some of the major findings on this issue revealed in the report:

  • Homeowners have a much greater financial stake in their neighborhoods than renters. With the median national home price in 2015 at $223,900, even a 5% decline in home values will translate into a loss of more than $11,195 for a typical homeowner.
  • Because owners tend to remain in their homes longer, they add a degree of stability to their neighborhood.
  • Homeowners also reap the financial gains of any appreciation in the value of their home, so they also tend to spend more time and money maintaining their residence, which also contributes to the overall quality of the surrounding community.
  • Homeowners were found to be more politically active than renters with 77% of homeowners saying they had at some point voted in local elections compared with 52% of renters.
  • There seems to be a greater awareness of the political process among homeowners. About 38% of homeowners knew the name of their local school board representative, compared with only 20% of renters.
  • There is a higher incidence of membership in voluntary organizations and church attendance among homeowners.
  • Homeownership does create social capital and provide residents with a platform from which to connect and interact with neighbors.
  • Owning a home means owning part of a neighborhood, and a homeowner’s feelings of commitment to the home can arouse feelings of commitment to the neighborhood, which, in turn, can produce interactions with neighbors.

Bottom Line

People often talk about the financial benefits of homeownership. As we can see, there are also social benefits of owning your own home. Let the Melissa Thompson Team assist you in your dreams for homeownership! Learn more about buying Memphis Real Estate at yourkeytomemphis.com. 901.729.9526 or [email protected]

 

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