PANDEMIC SPURS RISE IN MULTI-GENERATIONAL HOUSEHOLDS

 Life circumstances can sometimes change on a dime. Such is the case of household living situations since the pandemic began, causing social and economic upheavals for many families.

After the stay-at-home orders went into effect in many parts of the country in March, the National Association of Realtors noted a 15% increase in buyers who purchased a multigenerational home compared with before the pandemic hit, compared with 11% in the previous year. NAR's vice president of demographics and behavioral insights, Jessica Lautz, says, "One in six home buyers who purchased during the pandemic purchased a multigenerational home. That's an increase from 1 in 10."

Intergenerational homes can be anything from two (or more) attached, fully functional units in a duplex model or one home that offers private kitchens and separate entrances, like a rental unit in a single-family house. Or they might also be a detached accessory dwelling unit, typically a smaller home, in the backyard of a larger house. Adult children concerned about placing their parents in nursing homes during the pandemic have simply decided to keep things in their own backyards, just to be safe. Parents whose older kids lack employment or can't attend college are included in this "pod" living situation as well.

The ideal is, of course, to offer the other generation a degree of independence, with separate entrances and separate kitchen facilities. And homebuilders have been and continue to step up to the plate to provide this arrangement. "As you might expect, homes intended for more than one family tend to be a little larger, by nearly 22%, according to NAR data. "The typical existing home is 1,880 square feet and costs about $270,000. Yet a multigenerational abode is roughly 2,290 square feet and costs about 10.7% more, with a $299,000 price tag." These larger, higher-priced alternatives also take into account the pooling of several incomes, according to NAR's research.

The figures released by NAR account only for recent purchases.  "The actual number of intergenerational households that have formed since the start of the pandemic has actually increased by a staggering 61%."

U.S. Census data found that a record 64 million people—20% of the U.S. population—lived with multiple generations of adults in a single-family home.

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Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

How Does Refinancing Save Homeowners Money

 Question: How does refinancing save homeowners money?

There are two categories of refinancing, "rate-and-term" and "cash-out." Both can save you money.

The first type, rate-and-term, replaces your existing loan with one that has a better rate and/or terms. You might replace an ARM or balloon loan with a fixed-rate loan, for example. Or you may decide to lower your rate AND shorten your term. Some borrowers have been able to refinance from a 30-year loan into a 15 or 20-year loan, reducing the term, without appreciably raising their payments.

A borrower does not receive any significant amount of cash in a rate-and-term refinance; lenders generally consider that any cash proceeds above $2,000 pushes the loan into a cash-out category.

There are always certain costs involved in any mortgage transaction; there will always be fees for title, escrow, underwriting and document preparation, for example. Borrowers can add these fees to their new loan so as to avoid having to pay them in cash. Financing these items is not considered cash-out.

When you are deciding whether to do a rate-and-term refinance, you should evaluate it in two primary ways: first, how long will it take to recover the cost of doing the loan? For example, if the closing costs amount to $3,000 and the reduction in rate gives a saving of $1,500 per year in the first year, it will take approximately two years to "break even." For most people, this time frame is more than satisfactory, but you should make your own decision. The second criterion is net savings over some time period, say five years, ten years or more. 

Homeowners with adjustable rate mortgages (ARMs) may decide to refinance into a fixed rate loan, even though their rate may initially be higher, they might feel more secure knowing that their rate will never change. This is more of a defensive strategy to guard against the possibility of a higher rate in the future, but it may not "save money."

The other type of refinance, a "cash-out," is one where the borrower receives cash of more than $2,000 at closing. This is accomplished by getting a new loan that is larger than the balance of the old one plus closing costs. Borrowers can use that money for anything. Some homeowners have used cash-out refinances to pay off consumer debt, like car loans, student loans, and credit cards. Using home equity to pay off credit cards can drop the payment dramatically! But paying down installment loans can create a false economy. A $30,000 car loan with an interest rate of 6% will have a payment of $500, but paying off that loan with the proceeds of a home refinance will effectively drop the payment to $150—but does it really make sense to finance a car for 30 years? 

Hope this is useful.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Don't be a 'Lone Ranger' when house hunting

If your idea of a fun weekend is making a list of open houses to visit and then running all over town to see if you can find that diamond of a home, then have at it. The only problem with it is that you're doing it without the knowledge and protection of a professional real estate consultant. Can you buy a home without one? Absolutely. Is it wise? Not really, especially when, in most cases, you pay nothing for the services of a buyer's agent.

Real estate is complex, filled with nuances and pitfalls better navigated by seasoned professionals who can usually spot something amiss a mile away. Here are a few of the risks you expose yourself to going it alone.

Negotiation is something kids learn to do at an early age. "I'll trade you my PBJ for your salami sandwich." When they get older, they may strike a compromise with the teacher for turning in an important project a day late. Older yet and they are negotiating a salary for a new job. But real estate negotiation is a different animal. It's not a place to "practice" the art of negotiation if you weren't good at it as a kid or even a grown adult. Real estate agents not only understand how to best use leverage to earn you the best deal possible. They also know when to advise you to walk away because they know how sellers operate. Despite their home being desirable, a seller whose sales price is unreasonably high (not in line with other homes for sale in the area that are of similar size, age, and condition) is not realistic. It means they are not that truly dedicated to selling their home any time soon. A house priced unusually low and being sold in "as is" condition may be a recipe for remodeling disaster. By not working with an agent, you can't tap into their insights and acumen for how to drive the best bargain possible – a loss that can cost you.

Market knowledge is not something you can glean by spending a few evenings online looking at houses and neighborhoods. The prices listed on real estate apps can't always be trusted. A Realtor knows this and will call each listing agent or owner to confirm what they see is true. Sure, you can make those calls on your own, but you just may shoot yourself in the foot by revealing your motivation to buy, leaving you a limited opportunity to negotiate. A agent offers insights into trends in the market over time, will have researched the area for development, commercial and school construction and will give you an estimate for how much you should be budgeting for your target property -- all of which can change constantly. It's what agents do in their sleep.

How do you know you've got the real skinny on a property? The vetting process is an important one, with real estate professionals being held to legal standards that require them to thoroughly vet a property for potential pitfalls – water damage, toxic materials, health and flooding hazards, the list goes on and on. They are not keen on being the ones being held responsible for encouraging you to buy a property that has serious issues without all those issues being disclosed in the light of day and in writing. They always, always recommend professional inspections be performed as well as obtaining hazard and environmental reports for the area. You could be buying a home on ground where there was once an airfield, with toxic substances still remaining in the soil where your children play. Or the house may be located in an area where some serious mining took place, leaving it vulnerable to sinkholes or foundation sagging.

Don't kid yourself. The paperwork involved in a real estate transaction is nothing to scoff at. Contracts, disclosures, addendums, transfers, inspections, and reports can bury you. And what about those loopholes you may have overlooked? You assumed the seller would leave all the pool equipment, the chandelier in the dining room, and the entertainment cabinets that perfectly fit the walls in the family room. But when you get the keys to move in, you discover they are gone. Why? You forgot to intentionally specify they remain when signing the purchase agreement. Realtors don't forget these things. In fact, they may go overboard in enumerating all the items that stay with the house just to play if safe.

While you should make sure you personally review any binding document before signing it, a real estate professional can greatly reduce how much time you spend on legal matters so you can get back to how you really want to spend your time – activities like choosing that new king-sized bed for the master bedroom. Or buying patio furniture for around the pool you always wanted and finally got.

And then there is FOMO — the fear of missing out. Going it alone means you are limited to word of mouth recommendations and only what you can find on your computer. You may not realize that a new home community is being built nearby that might knock the socks off the neighborhood you are considering. The right Realtor will bring detailed knowledge of the market in your area or neighborhood – as well as other potential markets nearby that you might not have considered but could be just what you are looking for. They cast a wide net when looking for your home, so why not leverage their knowledge? They'll have information on property taxes, closing costs, HOA fees (as well as the health of the HOA itself), and even supplemental taxes you might not find out about until after you moved in. Why? It's their job. So why not let a Realtor be the detective instead of being a weekend house-hunting warrior? You've got nothing to lose and a lot to gain.

The first step to buying your home is getting pre-approved for a home loan. Call me and lets get started. I can also introduce you to a Realtor that will look out for your best interests and help you find the perfect home.  

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post. 

Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,

NMLS#269926 Company NMLS#1930219

Source: Lendersnetwork, TBWS