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Buying A Second Home? 8 Things To Consider

Buying a second home is a major expense. You might have several reasons for wanting to buy a second house. Perhaps, you’re buying a second home for vacations or weekend getaways. Or, it might be that you want to use it as a rental property for rental income. However, there are things to consider before buying a second home.

The benefits of buying a second home

If you’re buying a second home for rental income, you’ll benefit from many perks, especially tax advantages.

For example, you will be able to deduct interest, property taxes, homeowners insurance and other expenses against the property’s income.

Even if the value of the property declines, you will still be able to deduct depreciation from your taxes.

While these benefits are great, the mortgage requirements for a second home are much stricter than for a mortgage on your primary residence. So, make sure you can afford it.

8 Things To Consider When Buying A Second Home

1. Financing options: When you bought your first home, you had available to you what’s called an FHA loan – a government loan program.

FHA loans are an appealing and favorite choice among first time home buyers due to their relatively low down payment requirement.

FHA loans require a 3.5% down payment and a relatively low credit score of 580. However, FHA loans are not available to second home buyers.

That is because FHA requires the home to be the borrower’s primary residence. So, if you’re thinking of buying a second home, you will need to either use a conventional loan or financing it with your own cash.

2. A larger down payment: If you’re using a conventional loan for your second home, you will need to come up with a larger down payment.

Lenders for a conventional loan usually requires a 20% down payment of the home purchase price.

But for a second home which will be used as a rental property or vacation home, expect lenders to ask for 30% or even 35%.

3. A higher credit score. For an FHA loan, you only need a credit score of 580 to qualify. But for a conventional loan on a second home, you will need much higher credit score — usually 750 or higher.

4. Expect a Higher Interest Rate: Lenders will likely charge you a higher interest rate on your second home than your primary residence.

The reason is because they see a second home — be it a vacation home or a rental property — as riskier. They feel that you are more likely to default on a mortgage on your second home than on your primary residence.

5. Do your research: Just as you did your homework when you bought your place to live in, buying a second home is no different.

In fact, you’ll need to spend more time researching rental property. That means researching the neighborhood you will want to invest in, knowing the zoning laws for a particular area, the sales price for the homes in the area.

You will need to know if the area has adequate public transportation, schools, grocery shopping, etc,– things that potential tenants will need.

6. Be prepared to be a landlord: if you’re buying a second home to rent, be prepared to be a landlord.

And be prepared to deal with all of the headaches that come with being a landlord. Do you have sufficient time? Can you deal with problems?

Owning a rental property and being a landlord is time consuming. It is also hard hard work and you have to do your due diligence.

You can hire a property manager to run the property for you. But if that is not feasible, you’ll have to do it yourself.

That means, screening new tenants, collecting rent, dealing with delinquent tenants, fixing problems in the property, such as a broken pipe.

So before buying a second home, make sure you have sufficient time and make sure you can deal with the day-to-day headaches that come with being a landlord.

7. Do you have a stable income? Dealing with a second mortgage on your second home is doable.

While you may be able to afford upfront costs, if you don’t have a stable income, you may have to think twice about whether it is a good idea.

Plus, you still have to consider the additional expenses of owning a second home such as insurance, property taxes, maintenance, repairs, property management fees, etc.

8. Are you out of credit card debt? If you have paid off outstanding and high interest credit card debts, then purchasing a second home may make sense.

But if you’re still struggling to pay your debt, you may need to put buying a second home on hold. 

The bottom line

If you’re thinking about buying a second home, whether it is for investment or vacation, be prepared to save some money, budget for expenses, and come up with a bigger down payment.

More importantly, spend as much time, if not more, researching for the home just as you did when your purchased your primary home.

Speak with the Right Financial Advisor

  • If you have questions about your finances, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
  • Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

Source: growthrapidly.com

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8 Safe Investments for People Who Hate Risking Their Money

Think back to what the stock market looked like to you in March 2020, aka, the apocalypse. Did it look like:

A.) The biggest bargain sale you’ve ever seen in your lifetime? 

or

B.) A burning pit of money that was about to incinerate your life’s savings?

If you answered “B,” you probably have a low risk tolerance. You worry more about losing money than missing out on the opportunity to make more of it.

Being cautious about how you invest your money is a good thing. But if you’re so risk-averse that you avoid investing altogether, you’re putting your money at greater risk than you think.

Do Safe Investments Actually Exist?

When you think about the risks of investing, you probably think about losing principal, i.e., the original amount you invested. If you keep your money in a bank account, there’s virtually no chance of that happening because deposits of up to $250,000 are FDIC insured. 

But consider that the average savings account pays just 0.05% APY, while in 2019, inflation was about 2.3%.

So while you’re not at risk of losing principal, you still face purchasing power risk, which is the risk that your money loses value. Your money needs to earn enough to keep up with inflation to avoid losing purchasing power. If inflation continues at 2.3%, buying $100 worth of groceries will cost you $102.30 a year from now. If you’re saving over decades toward retirement, you’ll be able to buy a whole lot less groceries in your golden years.

There’s also the risk of missed opportunity. By playing it too safe, you’re unlikely to earn the returns you need to grow into a sufficient nest egg.

Though there’s no such thing as a risk-free investment, there are plenty of safe ways to invest your money.

8 Low-Risk Investments for People Who Hate Losing Money

Here are eight options that are good for conservative investors. (Spoiler: Gold, bitcoin and penny stocks did not make our list.

1. CDs

If you have cash you won’t need for a while, investing in a CD, or certificate of deposit, is a good way to earn more interest than you’d get with a regular bank account.

You get a fixed interest rate as long as you don’t withdraw your money before the maturity date. Typically, the longer the duration, the higher the interest rate. 

Since they’re FDIC insured, CDs are among the safest investments in existence. But low risk translates to low rewards. Those low interest rates for borrowers translate to lower APYs for money we save at a bank. Even for five-year CDs, the best APYs are just over 1%.

You also risk losing your interest and even some principal if you need to withdraw money early.

2. Money Market Funds

Not to be confused with money market accounts, money market funds are actually mutual funds that invest in low-risk, short-term debts, such as CDs and U.S. Treasurys. (More on those shortly.)

The returns are often on par with CD interest rates. One advantage: It’s a liquid investment, which means you can cash out at any time. But because they aren’t FDIC insured, they can technically lose principal, though they’re considered extraordinarily safe.

3. Treasury Inflation Protected Securities (TIPS)

The U.S. government finances its debt by issuing Treasurys. When you buy Treasurys, you’re investing in bonds backed by the “full faith and credit of the U.S. government.” Unless the federal government defaults on its debt for the first time in history, investors get paid.

The price of that safety: pathetically low yields that often don’t keep up with inflation.

TIPS offer built-in inflation protection — as the name “Treasury Inflation Protected Securities” implies. Available in five-, 10- and 30-year increments, their principal is adjusted based on changes to the Consumer Price Index. The twice-a-year interest payments are adjusted accordingly, as well.

If your principal is $1,000 and the CPI showed inflation of 3%, your new principal is $1,030, and your interest payment is based on the adjusted amount. 

On the flip side, if there’s deflation, your principal is adjusted downward.

4. Municipal Bonds

Municipal bonds, or “munis,” are bonds issued by a state or local government. They’re popular with retirees because the income they generate is tax-free at the federal level. Sometimes when you buy muni bonds in your state, the state doesn’t tax them either.

There are two basic types of munis: General obligation bonds, which are issued for general public works projects, and revenue bonds, which are backed by specific projects, like a hospital or toll road.

General obligation bonds have the lowest risk because the issuing government pledges to raise taxes if necessary to make sure bondholders get paid. With revenue bonds, bondholders get paid from the income generated by the project, so there’s a higher risk of default.

5. Investment-Grade Bonds

Bonds issued by corporations are inherently riskier than bonds issued by governments, because even a stable corporation is at higher risk of defaulting on its debt. But you can mitigate the risks by choosing investment-grade bonds, which are issued by corporations with good to excellent credit ratings.

Because investment-grade bonds are low risk, the yields are low compared to higher-risk “junk bonds.” That’s because corporations with low credit ratings have to pay investors more to compensate them for the extra risk.

6. Target-Date Funds

When you compare bonds vs. stocks, bonds are generally safer, while stocks offer more growth. That’s why as a general rule, your retirement portfolio starts out mostly invested in stocks and then gradually allocates more to bonds.

Target-date funds make that reallocation automatic. They’re commonly found in 401(k)s, IRAs and 529 plans. You choose the date that’s closest to the year you plan to retire or send your child to college. Then the fund gradually shifts more toward safer investments, like bonds and money market funds as that date gets nearer.

7. Total Market ETFs

While having a small percentage of your money in super low-risk investments like CDs,

money market funds and Treasurys is OK, there really is no avoiding the stock market if

you want your money to grow.

If you’re playing day trader, the stock market is a risky place. But when you’re committed to investing in stocks for the long haul, you’re way less exposed to risk. While downturns can cause you to lose money in the short term, the stock market historically ticks upward over time.

A total stock market exchange-traded fund will invest you in hundreds or thousands of companies. Usually, they reflect the makeup of a major stock index, like the Wilshire 5000. If the stock market is up 5%, you’d expect your investment to be up by roughly the same amount. Same goes for if the market drops 5%.

By investing in a huge range of companies, you get an instantly diversified portfolio, which is far less risky than picking your own stocks.

8. Dividend Stocks

If you opt to invest in individual companies, sticking with dividend-paying stock is a smart move. When a company’s board of directors votes to approve a dividend, they’re redistributing part of the profit back to investors.

Dividends are commonly offered by companies that are stable and have a track record of earning a profit. Younger companies are less likely to offer a dividend because they need to reinvest their profits. They have more growth potential, but they’re also a higher risk because they’re less-established.

The best part: Many companies allow shareholders to automatically reinvest their dividends, which means even more compound returns.

Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]

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Source: thepennyhoarder.com

Six Suburbs for Generation Z

Are you thinking about buying your first home? If you’re a member of Generation Z, you’re not alone. Post-millennial adults have learned a lot from the unexpected delays and disappointments that are keeping 19 million mortgage-ready millennials in rentals. Planning well is one of them.

One question to answer is where you want to live. Conditions for first-time homebuyers vary a lot from one place to another. Affordability, employment prospects, and proximity to friends and family are three variables that can help you decide where to settle. In deciding where to buy a first home, each generation has likes and dislikes that reflect its values and priorities. Recently Homes.com surveyed more than 1,000 members of Generation Z to find out more about their home-buying plans, including what kind of neighborhood they prefer.

The survey found preferences centered around four characteristics:

  • Diversity. More than half prefer neighborhoods and communities that are racially and ethnically diverse;
  • Accessibility. Three out of four want a location that is accessible to work as well as to friends and family;
  • Safety. This is a priority when Generation Z-ers evaluate neighborhoods
  • Affordability. Generation Z is very aware of rising home prices that have kept millions of millennials from becoming homeowner.,

If you haven’t yet settled down and are open to moving, you might be interested in learning about options. In no particular order, here are six suburban locations that rank high in the four characteristics identified by the survey.

Lilburn, Georgia (Atlanta)

Located in Gwinnet County, northeast of Atlanta, Lilburn is a bedroom community with an approximate 30-minute drive to the city. With a population of about 12,000, it grew following construction of the Lawrenceville highway that radiated from Atlanta. Its median income, unemployment rate, home value, and age of its residents are slightly higher than the state average. Lilburn has been recognized nationally as one of the most diversified communities in the nation by Niche.com and one of the safest in Georgia by BackgroundChecks.org. Its population is only 49% white. Hispanics account for 30% of its population, Asians for 20%, and African Americans 18%.

atlanta, georgiaatlanta, georgia

Florin, California (Sacramento)

A city of 47,000 in Sacramento County, Florin is only 5.5 miles and an average commute time of 27 minutes from Sacramento. Florin (derived from “flora” or flowers) is in a rich agricultural district in the Central Valley, not far from the base of the Sierra Nevada. Florin flourished between the late 1890s and early 1900s, producing record crops of strawberries and grapes. After the turn of the 20th century, it developed a size-able Japanese community, which was devastated by World War II and the internment of its Japanese citizens in camps. Today, Florin’s unemployment rate is 3.8%, its median income level is about $20,000 lower than the state average, and its median home price is about equal to the national median. Asians account for 30% of its population, and Hispanics 28%.

Shaker Heights OH (Cleveland)

With a population of more than 28,000 residents, Shaker Heights is only a 25-minute ride on one of town’s two RTA lines or a ten-minute drive from downtown Cleveland. Its nine distinctive neighborhoods feature classic architecture, tree-lined streets and access to a variety of amenities from biking and ice skating to a 200-acre nature center. Healthcare, management, and teaching are the top fields of employment, and its crime rate is close to the national average. Shaker Heights is the sixth most ethnically diverse in Ohio. Only about half of its residents are white, a third are African American, and 5% are Asian. Two-thirds of its residents are college graduates and its median household income is $30,000 higher than the national median. However, its real estate is comparatively affordable. The median home value is about $260,000, about the same as the national median.

Glendale Heights, Illinois (Chicago)

Glendale Heights is a western suburb of Chicago with a population of about 35,000. The city is the most important passenger and freight transport hub in the country with over 30 Fortune 500 companies have headquarters there. It is recognized locally for its economic and cultural diversity, arts and culture and historic preservation. Until 1958, the site of Glendale Heights was mostly rural, but over the years, it has experienced significant economic and population growth. The average commute time to downtown Chicago is about 25 minutes by car. The median home price in Glendale Heights is about $225,000, equal to the statewide median and lower than the median of $263,000 for the Chicago metro. Glendale Heights’ population is 35% white, 32% are Hispanic, 23% Asian, and 7% are African American.

chicago, illinoischicago, illinois

Valley Stream, New York (New York City)

Located in Nassau County on Long Island, Valley Stream is a village of about 40,000 in the town of Hempstead, along the border with Queens. Living in Valley Stream has an urban feel and most residents are young professionals who own their homes. Median household income is about $100,000 and median home values are around $400,000, which is approximately $50,000 lower than the median for Long Island. Valley Stream’s population is 32% white, and 23% are African Americans. Hispanics account for 25% of the populace and 15% are Asian. Valley Stream’s crime rate is about one-third of the average for New York State.

Stafford, Texas (Houston)

Stafford began life in 1830 as a plantation with a cane mill and a horse-powered cotton gin. Today it’s a bedroom community in the greater Houston area with 18,000 residents, a performing arts theatre & convention center, and a Swaminarayan Mandir, one of four temples of the Hindu sect in the US. At $59,094. Stafford’s median annual income is slightly higher than the state median and its median house value is $195,527, higher than Houston’s but far below the national median of $260,000. Its violent crime rate is half as high as Houston’s and is the fourth most diverse community in Texas. African Americans constitute Stafford’s most populous race at 30%.


Steve Cook is the editor of the Down Payment Report and provides public relations consulting services to leading companies and non-profits in residential real estate and housing finance. He has been vice president of public affairs for the National Association of Realtors, senior vice president of Edelman Worldwide and press secretary to two members of Congress.

Source: homes.com

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How Long Does It Take to Close On A House?

In this article:

The closing process on a home purchase can take anywhere from a week to 60 days, depending on the property type, whether or not you’re buying with a mortgage and what type of loan you’re taking out. The closing process includes two distinct periods:

Escrow is the period of time between when you and the seller sign the contract and the day you close.

Closing day is the day you sign all the paperwork, get the keys and become the official owner of a home.

How long does it take to close on a house with cash?

Part of what makes closings take so long is the financing requirements, so buying with cash can expedite the process. If you’re buying with cash, you can close as few as seven days after contract execution, assuming you’re willing to waive contingencies. However, only 23% of buyers purchase their homes with all cash, according to the Zillow Group Consumer Housing Trends Report 2018.

How long does it take to close on a house with a mortgage?

Buyers who use conventional financing to purchase a home can expect to close 30-45 days after the contract is signed. Special loans, such as first-time home buyer programs, VA and FHA loans can take longer to close because the requirements are stricter.

The escrow process timeline

After you’ve made an offer on a home and both you and the seller have agreed on terms (including price and closing date) and executed the contract, you’re officially in escrow. These are the steps that are usually part of the escrow process, and how long each step typically takes. Keep in mind that the escrow process and timeline can vary based on your market, lender, property type, financing type and the overall complexity of the transaction. You should also note that some of the steps below happen concurrently.

  1. Execute the contract and confirm closing date
  2. Open the escrow account (a few days)
  3. Complete inspection and repair requests (1-2 weeks)
  4. Mortgage application and underwriting (5-20 days)
  5. Appraisal (1-2 weeks)
  6. Acquire homeowner’s insurance and title insurance (1 day)
  7. Get loan approval, commonly called “Clear to close” (1 day)
  8. Do a final walk through (1 day)
  9. Attend your closing appointment and close on your new home (1 days)

According to Zillow Consumer Housing Trends Report 2019, 57% of buyers who attained a mortgage said one of their concerns was being unclear on how the mortgage process works. To make sure you fully understand the steps, stay in close contact with your real estate agent, real estate attorney (if you have/need one) and lender. They’ll be able to answer any questions you have and provide documents you need to sign, so be available to turn those requests around as quickly as possible.

The process of buying a house with cash

If you’re buying a home with all cash and still including common contingencies (like a home inspection contingency), your process will be the same, except you won’t have to do a mortgage application or wait for loan underwriting and approval. Some cash buyers opt to waive contingencies, which can speed up the process.

How long after the appraisal can you close?

Assuming there are no issues with your appraisal, the lender will send the “clear to close” about a week before the agreed-upon closing date. If you’ve requested a longer escrow period and a later closing date, you may get your “clear to close” well in advance of your closing date.

What causes delays when closing on a house?

Your closing date will usually be agreed upon with the seller during offer negotiations. But, your closing date could get pushed back a few days (or even a few weeks) based on unexpected setbacks. Here are some of the common issues that can lead to a delayed closing.

Buyer financing

Most of the time, delayed closings are related to finalizing your mortgage. This can be anything from appraisal concerns to missing financial documentation to an inexperienced loan officer.

Changes to your creditworthiness

If you’ve made large purchases, taken out another loan that negatively impacted your debt-to-income ratio or had a significant change in your income between the time you were pre-approved and closing, your lender may need to re-evaluate your credit profile, which can take time.

Low appraisal

If your appraisal comes in at or above the contracted sale price, it should be smooth sailing. But, a low appraisal could leave you needing to renegotiate with the seller or come up with enough cash to cover the difference between the home’s appraised value and the sale price.

Title issues

If the seller has any unresolved liens or judgments on the home, or if any other ownership disputes are uncovered during the escrow process, the closing can be delayed while these issues are resolved.

Homeowner’s insurance

In order to close, you must have proof that you’ve secured a homeowner’s insurance policy on the property you’re buying. If you miss this step or don’t have the correct documentation, your closing could be delayed.

Home sale contingency

If your contract says you can’t close until your previous home sells, your closing could be delayed if it takes longer than expected.

Slow repair requests

If you’re going back and forth with the seller on repairs needed based on the home inspection report, both the negotiations and the repairs themselves can slow down your closing timeline.

Unsatisfactory walk-through

Right before closing, you’ll do a final walk-through of the property. If the home isn’t in the same condition (or a better condition, if you negotiated repairs) than when you made your offer, you may delay closing until issues can be resolved.

Tips for staying on your closing timeline

Even if you’re buying with a mortgage (and you’ll be among the 77% of all buyers who are), you can help expedite the closing process by being prepared, responsive, diligent and decisive both before and during the escrow period.

Get pre-approved

Before you even start searching for homes, take the time to get pre-approved so you’ll know ahead of time that you’re eligible for a loan in the amount you need. Not only will it help you prevent delays during the escrow period, but it will make any offers you submit look more legitimate in the eyes of sellers, since they know you can pay for the home.

For a pre-approval, you’ll need documents that verify your income, like paystubs, bank statements and tax returns. You’ll also want to make sure your credit report is error free, as your lender will run your credit as part of your pre-approval.

Schedule the inspection as soon as possible

As soon as your offer is accepted and the contract is executed, schedule your home inspection. In some states, you are required to schedule the inspection within 7-10 days. After you receive the inspection report, you will have a few days to review and request repairs or credits from the seller. Keep in mind, the seller will have a few days to respond as well.

Buyers of Zillow-owned homes can have peace of mind that the home has been recently updated by licensed contractors. Of course, you’re still able to do your own independent home inspection.

Have a backup plan in case of a low appraisal

Appraisal reports can vary, and very rarely do two professional appraisers value a home exactly the same. If the home you’re buying appraises for less than the sale price, your lender won’t let you finance the home using the full sale price. If your appraisal comes back low, you have two options: either make up the difference in cash, or renegotiate the sale price with the seller. If you’re in a hot market where sellers have their pick of multiple offers, you shouldn’t expect the seller to lower their price to accommodate a low appraisal.

Hire an experienced lender

Find an experienced lender that is familiar with the intricacies and requirements of your market for a seamless and transparent closing process. Opt for an online lender to further optimize your experience. In fact, 15% of buyers who used a mortgage to finance a home in 2019 obtained their mortgage through an online lender. Though, younger buyers are more likely to choose an online lender option.

Be quick to respond to documentation requests

It’s likely that your lender will need updated financial documents, signed disclosures and other information as they prepare your loan for closing. Your title or escrow company may need you to complete certain tasks, too. Respond to all requests as quickly as possible to keep the escrow process moving forward.

How long does closing day take?

Closing day — that is, the day you go to the closing agent and sign your final paperwork to buy the home — typically takes between 1.5-2 hours if everything goes smoothly, but you’ll want to leave ample time in your schedule in case it takes longer.

During your closing appointment you’ll sign documents (a list of typical documents is below) and pay your down payment. Your lender will also wire the balance of the sale price at this time. The title or escrow agent will facilitate the closing appointment, but you’ll want your agent and/or attorney to be present as well. In closing attorney states, the attorney may facilitate the closing appointment. Be sure to bring your ID, a cashier’s check, proof of insurance and your purchase and sale contract.

Buyers usually must attend this meeting in person, whereas sellers can sometimes sign their paperwork ahead of time.

What documents do buyers usually sign?

  • Promissory note
  • Mortgage/deed of trust
  • Escrow disclosure
  • Signature affidavit
  • Initial mortgage payment
  • Appraisal acknowledgement
  • HOA documents (if applicable)
  • Certificate of occupancy (new construction only)
  • Equal Credit Opportunity Act disclosure
  • Truth-in-Lending disclosure
  • Mortgage fraud statements

Source: zillow.com

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Wine Country towns you can actually afford

You love​ the Napa lifestyle. The Napa prices? Not so much. If your budget is more “house blend” than “rare vintage,” you might assume that you’re priced out of a life among the vineyards. Not so. We found four wine country towns where you can sip local vino on your patio without dropping a fortune on your house.

Median sales price: $296,500

Palisade, where the median sales price is under $300,000. Photo: njplantguru/Instagram

Like Traverse City, Palisade has a microclimate that allows the area to grow produce you wouldn’t think was possible in Colorado. Its most notable crop is wine grapes—the area is home to two-thirds of the state’s vineyard acres and a quarter of its wineries. Orchards, vineyards, tasting rooms, and wineries are everywhere in this small town, and they’re all full of local Chardonnay, Merlot, Cabernet Sauvignon, and Sauvignon Blanc. At Varaison Vineyards and Winery, locals show up on Fire Pit Fridays for s’mores and wine tastings. Residents enjoy outdoorsy adventures at Mount Lincoln and Mount Garfield and weekend festivals like September’s Colorado Mountain Winefest.

With wineries are spread throughout town, locals are never far from one, regardless of their address or budget. Here, living near a winery doesn’t require a million-dollar bank account. The good life can be had with a median sales price of $296,500.

Interested? You can have your own view of the mountains from this tidy five-bedroom for sale in Palisade for $339,357.


Median sales price: $252,111

The view from this Walla Walla home is a wine lover’s dream.

When Italians started immigrating to Walla Walla in the late 1800s, they came with a gift: winemaking know-how. Unfortunately, it would take nearly 100 years to figure out how to make grapes survive the often-fickle weather here. Today, the area is knowns for its Cabernet Sauvignon, but you’ll also find plenty of vines producing Merlot, Syrah, Cabernet Franc, and Malbec. There are more than 120 wineries in Walla Walla, including one owned by NFL star Drew Bledsoe and a mini-winery cluster on the grounds of the local airport.

Though locals take their wine seriously, the Walla Walla vibe is as light-hearted as its name. This is a city where one of the best restaurants is found in a gas station—Andrae’s Kitchen, run by acclaimed chef Andrae Bopp. And in the wineries around town, you’re likely to find winemakers mixing with patrons, or in the case of Julia Russell of Mansion Creek Cellars, teaching them flamenco moves.

Though still somewhat under the radar as a wine region, Walla Walla is getting more attention all the time. Get ahead of the crowd while the median sales price is a friendly $252,111.

Interested? This three-bedroom charmer is available now for $250,000 in Walla Walla.


Median sales price: $288,500

Overmountain Vineyards sits on a 70-acre parcel east of Tryon. Photo: pryorreggie/Instagram

This small town of 1,700 in the heart of North Carolina’s horse country has a well-deserved reputation as an oasis for the arts. Many artists, actors, and writers (including F. Scott Fitzgerald) have lived in this town near the Blue Ridge Mountains.

Locals and visitors love the galleries, independent bookstores, and restaurants along Trade Street, but the Tryon Foothills Wine Country has become an even bigger attraction. Protected from extreme weather by the mountains, the Tryon Foothills have the longest grape-growing season in the state. In fact, the area has been famous for its prime grape-growing conditions for well over a century. Today, the area produces a large variety of wine grapes, including  Cabernet Sauvignon, Merlot, Cabernet Franc, Chardonnay and Sauvignon Blanc. At Mountain Brook Vineyard, grapes are harvested entirely by hand. And over at Overmountain Vineyards, a father-daughter team handcrafts French-style wine.

Interested? Even the address of this sunny two-bedroom in Tryon is right: it’s on Vineyard Road. And at $269,500, it’s less than the median price of $288,500.


Median listing price: $220,650

This home for sale in Traverse City comes with a vineyard.

The mountain-like dunes on the shores of Lake Michigan aren’t the only quirk of geography for Traverse City. Its location near the lake gives the city ideal conditions for producing cool-climate grapes, a feat not possible anywhere else in the region. Wine experts love the area’s Rieslings, and both Chardonnay and Pinot Noir are popular Traverse City varieties, too. And there’s more praise still for the natural beauty at the area’s 35 wineries, especially those on the panoramic Leelanau Peninsula. Whether you’re gazing over Grand Traverse Bay from Chateau Chantel or at the rolling fields of lavender of Brys Estate, the views pair perfectly with the wine.

Though Traverse City is a favorite among summer vacationers, it doesn’t shut down after the high season. Most wineries remain open year-round, and the arts and entertainment scene stays busy with galleries, events, and film screenings at the restored vintage State Theatre. With a median listing price of $220,650, you’d have room in your budget to explore it all.

Interested? You can find an adorable three-bedroom for sale in Traverse City for $229,900.


Ready to find the wine-country home of your dreams? See what’s available now on Trulia.

Source: trulia.com

How to Set a Home Renovation Budget

Before you start picking out tile and paint chips, be sure you know how much it will cost to remodel your house.

Have you just moved into a new place and want to spruce it up? Or maybe you’ve been in your home for a while and feel ready for a change. The easy part is knowing your goal for home remodeling — whether you’re trying to keep up with your growing family, add office space, modernize dated features or generally increase your home’s value.

Even if you’re ready for a kitchen renovation or anxious for a bathroom remodel, figuring out how to plan a home renovation that doesn’t break the bank can be tricky.

Here are five key steps in planning your home remodeling project.

1. Estimate home renovation costs

As a general rule of thumb, you should spend no more on each room than the value of that room as a percentage of your overall house value. (Get an approximate value of your home to start with.)

For example, a kitchen generally accounts for 10 to 15 percent of the property value, so spend no more than this on kitchen renovation costs. If your home is worth $200,000, for example, you’ll want to spend $30,000 or less.

Something else to keep in mind: Contrary to popular belief, kitchen renovations offer among the lowest return on investment. Every dollar you spend on a kitchen remodel increases the value of your home by approximately 50 cents.

The highest return on investment? A mid-range bathroom remodel.

2. Consider home remodeling loan options

If you plan on borrowing money to fund your home renovations, there are a number of loans out there to help with just that.

  • Refinancing. Depending on your current interest rate, you might be able to refinance your mortgage at a lower rate and/or for a longer loan term, which could lower your monthly payments and help you save up for your renovations.
  • Cash-out refinance. If you have enough equity, you could also consider a cash-out refinance, which means refinancing your existing loan for an amount that’s higher than what you owe. Going this route, you pay off your original mortgage and have cash left over. Use a refinance calculator to see if refinancing makes sense for you.
  • HELOC. If refinancing sounds like too big of a leap, a home equity line of credit (HELOC) might work better. A HELOC works a lot like a credit card in the sense that it has a set limit that you can borrow against.
  • Home equity loan. Although it sounds similar to a HELOC, a home equity loan is a bit different. This loan requires you to take out all the cash at one time. They’re often referred to as “second mortgages” because homeowners get them in addition to their first mortgage.

Refinancing, getting a HELOC or taking out a home equity loan are all big decisions, and it can be tough to know which one makes the most sense for you. As with any new loan, consult with a lender to see which option is best for your situation.

3. Get home renovation quotes from contractors

Some contractors will give you an estimate based on what they think you want done, and work completed under these circumstances is almost guaranteed to cost more. You have to be very specific about what you want done, and spell it out in the contract — right down to the materials you’d like used.

Get quotes from several contractors, but don’t necessarily go for the the lowest estimate. A bid that comes in much lower than the others could be a sign of a contractor who cuts corners — which can lead to extra costs in the long run.

4. Stick to the home remodeling plan

As the renovation moves along, you might be tempted to add on another “small” project or incorporate the newest design trend at the last minute. But know that every time you change your mind, there’s a change order, and even minor changes can be costly. Strive to stick to the original agreement, if possible.

5. Account for hidden home renovation costs

Your home may look perfect on the outside, but there could be issues lurking beneath the surface. In fact, hidden imperfections are one of the reasons renovation projects often end up costing more than anticipated.

Rather than scramble to come up with extra money after the fact, give yourself a cushion upfront. Factor in 10 to 20 percent (or more) of your contracted budget for unforeseen expenses, as they can — and do — occur. In fact, it’s rare that any project goes completely smoothly.

Related:

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Originally published June 2015.

Source: zillow.com

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Values of Distressed Manhattan Retail Properties Plummet

Real estate borrowers who are already struggling to pay the mortgages on their Manhattan retail properties have also been hit with a sharp cut to those properties’ assessed values. So reports MarketWatch.

The values for Manhattan retail properties for which lenders ordered new appraisals since July—often done when borrowers seek debt relief or fall behind on their payments—were down 53% from their value at the time of securitization, according to data from real-estate data platforms Trepp and CompStak.

Trepp and CompStak, which looked at $5 billion of Manhattan retail property debt, said that the lion’s share of those properties were in “the Chelsea/Clinton and Greenwich Village/SoHo neighborhoods.”

Read the full article from MarketWatch.

Source: themortgageleader.com

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How Much Home Insurance Do I Need? A Guide for Buyers

If you’re buying a home, choosing the right amount of homeowners insurance for your property is key. Buy too much, and you’re wasting cash on coverage you’ll never use.

Buy too little, and if a hurricane, hailstorm, or other disaster strikes your home, your insurance might not cover the costs to fix the damage—which means you’ll be paying out of your own pocket.

So how much home insurance is enough? In this latest installment of our Home Buyer’s Guide to Home Insurance, we’ll outline all you need to know to get the right amount and type of insurance to suit your circumstances perfectly.

How much homeowners insurance do I need?

The goal of your homeowner insurance policy is to ensure you’re covered not only for minor damage that you’d like financial help fixing, but more importantly, in case your home is completely destroyed (in a tornado, fire, or otherwise) and needs to be rebuilt from scratch. This is known as “actual total loss” or “total loss.”

Total loss coverage varies from area to area as well as from home to home, but basically boils down to an estimate of how much it would cost to rebuild your home. That could cost more than you paid for your house, or less—it all depends on construction costs in your area.

“Size, materials, quality of finish, and a number of other factors will influence that rebuilding cost,” says Stefan Tirschler, product and underwriting manager at Square One Insurance Services.

To determine the total loss coverage for your property, you’ll want to talk to a home insurance company or agent (who probably represents various insurance companies), who can determine the best amount of coverage based on your home’s square footage, the local construction market, and, of course, the current market value of the house.

“When you shop for home insurance, your insurance provider will likely have access to electronic reconstruction cost-estimating tools to help provide a sense of how much coverage you need,” Tirschler explains.

If you have a mortgage on your home, your lender will probably require your coverage to equal 100% of the replacement cost of the home. And even if your home is paid off—or no requirement is in place—it’s still a good idea to buy enough coverage to cover the complete replacement cost.

Even if the odds are slim that you’ll ever need to use it, the peace of mind it can provide in the event of a disaster is priceless.

Does home insurance cover what’s inside the house?

Another factor to consider is not only the replacement cost of your house, but what’s inside as well—in other words, your belongings. After all, if your home is destroyed by fire or damaged by a hurricane, it’s not just the roof and walls that take the hit.

Most home insurance policies will cover interior items, but that doesn’t mean everything inside your home is safe. For instance, a “named perils policy” typically covers only a specific, narrow list of causes of loss, and depending on why you place the claim, you may find your insurance company won’t pay up!

If you want to ensure your valuables are fully protected, Tirschler suggests looking for an insurance provider that offers an “open perils” (or “all-risk”) policy.

“Open perils policies provide the strongest protection, because they cover all possible causes of loss except for those that are specifically excluded,” he notes.

Is basic home insurance enough?

As you shop for home insurance and compare quotes, you should know that most insurance providers won’t give you just one quote—rather, they may offer several. This is because companies often offer different levels of insurance—like “basic” and “enhanced”—each with their own price, pros, and cons. Here are some factors to consider:

  • Deductible. A deductible is the amount you’ll need to pay out of pocket before your insurance kicks in. Generally speaking, the higher the deductible, the cheaper the monthly insurance premiums. Why? Because with a high deductible, you’ll have to pay more before your insurance company has to pitch in. Deductibles often range from $1,000 up to $5,000.
  • Coverage limits. A coverage limit is the maximum amount your insurer will pay when something goes wrong and you file a claim—everything above this amount, you’ll have to pay out of pocket. For instance, a more affordable, basic plan might pay the medical bills if a guest is injured at your house at up to $1,000 per person, whereas a more expensive, enhanced plan might cover up to $5,000 per person.

You can choose between these various insurance levels based on your personal comfort level, tolerance for risk, and how much money you have in the bank in case of emergencies.

If your circumstances or outlook change, most companies will allow you to increase or decrease your coverage. For instance, if you could only afford a basic, bare-bones plan originally but want pricier/better coverage after getting a promotion at work, most insurance companies will happily adjust your plan to suit your new circumstances.

Do you need additional home insurance riders?

Your insurer will also likely offer you some additional, optional coverage. Got expensive jewelry or artwork in your home? You may want to purchase additional coverage. You’ll pay more now, but if your valuables are damaged or destroyed, your insurance company will help you pay to replace them, which could save you money in the long run.

“If you have any high-value items, such as jewelry or expensive art, these will require a different policy to truly cover their actual worth,” says Ralph DiBugnara, president of Home Qualified.

Remember, too, that you may need to purchase a separate insurance policy for things that are not covered in your plan. For instance, floods and earthquakes are typically not covered in basic insurance plans, so if you want it, you’ll have to buy this insurance separately.

In our next installment of this series, we’ll dive in more depth into what home insurance covers—and what it doesn’t.

Source: realtor.com

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Is Your Mortgage Forbearance Ending Soon? What To Do Next

Millions of Americans struggling to make their monthly mortgage payments because of COVID-19 have received relief through the Coronavirus Aid, Relief, and Economic Security Act.

But mortgage forbearance is only temporary, and set to expire soon, leaving many homeowners who are still struggling perplexed on what to do next.

Enacted in March, the CARES Act initially granted a 180-day forbearance, or pause in payments, to homeowners with mortgages backed by the federal government or a government-sponsored enterprise such as Fannie Mae or Freddie Mac. Furthermore, some private lenders also granted mortgage forbearance of 90 days or more to financially distressed homeowners.

According to the Mortgage Bankers Association, 8.39% of loans were in forbearance as of June 28, representing an estimated 4.2 million homeowners nationwide.

So what are affected homeowners to do when the forbearance goes away? You have options, so it’s well worth contacting your lender to explore what’s best for you.

“If you know you’re going to be unable to meet the terms of your forbearance agreement at its maturity, you should call your loan servicer immediately and see what options they may be able to offer to you,” says Abel Carrasco, mortgage loan originator at Motto Mortgage Advisors in St. Petersburg, FL.

Exactly what’s available depends on the fine print in the terms of your mortgage forbearance agreement. Here’s an overview of some possible avenues to explore if you still can’t pay your mortgage after the forbearance period ends.

Extend your mortgage forbearance

One simple option is to contact your lender to request an extension.

Homeowners granted forbearance under the CARES Act can request a 180-day extension, giving them a total of 360 days of forbearance, according to the Consumer Financial Protection Bureau.

The key is to contact your lender well before your forbearance expires. If you let it expire without an extension, your lender could impose penalties.

“If you just stop making regular, scheduled payments, you could have a late mortgage payment on your credit,” warns Carrasco. “That could severely impact refinancing or purchasing another property in the immediate future and potentially subject you to foreclosure.”

Keep in mind, though, a forbearance simply delays payments, meaning they’ll still need to be made in the future. It doesn’t mean payments are forgiven.

Refinance to lower your mortgage payment

Mortgage interest rates are at all-time lows, hovering around 3%. So if you can swing it, this may be a great time to refinance your home, says Tendayi Kapfidze, chief economist at LendingTree.

Refinancing could come with some hefty fees, however, ranging from 2% to 6% of your loan amount. But it could be worth it.

A lower interest rate will likely lower your monthly payment and save you thousands over the life of your mortgage. Dropping your interest rate from 4.125% to 3% could save more than $40,000 over 30 years, for example, according to the Consumer Financial Protection Bureau.

“Lenders have tightened standards, though, so you will need to show that you are a good candidate for refinancing,” Kapfidze says. You’ll need a good credit score of 620 or higher.

As long as you’ve kept up your end of the forbearance terms, having a mortgage forbearance shouldn’t affect your credit score, or your ability to refinance or qualify for another mortgage.

Ask for a loan modification

Many lenders are offering an assortment of programs to help homeowners under hardship because of the pandemic, says Christopher Sailus, vice president and mortgage product manager at WaFd Bank.

“Lenders quickly recognized the severity of the economic situation due to the pandemic, and put programs into place to defer payments or help reduce them,” he says.

A loan modification is one such option. This enables homeowners at risk of default to change the terms of their original mortgage—such as payment amount, interest rate, or length of the loan—to reduce monthly payments and clear up any delinquencies.

Loan modifications may affect your credit score, but not as much as a foreclosure. Some lenders charge fees for loan modifications, but others, like WaFd, provide them at no cost.

———

Watch: 5 Things to Know About Selling a Home Amid the Pandemic

———

Put your home on the market

It may seem like a strange time to sell your home, with COVID-19 cases growing, unemployment rising, and the economy on shaky ground. But, it’s actually a great time to sell a house.

Pending home sales jumped 44.3% in May, according to the National Association of Realtors®’ Pending Home Sales Index, the largest month-over-month growth since the index began in 2001.

Home inventory remains low, and buyer demand is up with many hoping to jump on the low interest rates. Prices are up, too. The national median home price increased 7.7% in the first quarter of 2020, to $274,600, according to NAR.

So if you can no longer afford your home and have plenty of equity built up, listing your home may be a smart move. (Home equity is the market value of your home minus how much you still owe on your mortgage.)

Consider foreclosure as a last resort

Foreclosure may be the only option for many homeowners, especially if you fall too behind on your mortgage payments and can’t afford to sell or refinance. In May, more than 7% of mortgages were delinquent, a 20% increase from April, according to mortgage data and analytics firm Black Knight.

“When to begin a foreclosure process will vary from lender to lender and client to client,” Sailus says. “Current and future state and federal legislation, statutes, or regulations will impact the process, as will the individual homeowner’s situation and their ability to repay.”

Foreclosures won’t begin until after a forbearance period ends, he adds.

The CARES Act prohibited lenders from foreclosing on mortgages backed by the government or government-sponsored enterprise until at least Aug. 31. Several states, including California and Connecticut, also issued temporary foreclosure moratoriums and stays.

Once these grace periods (and forbearance timelines) end, and homeowners miss payments, they could face foreclosure, Carrasco says. When a loan is flagged as being in foreclosure, the balance is due and legal fees accumulate, requiring homeowners to pay off the loan (usually by selling) and vacating the property.

“Absent participation in an agreed-upon forbearance, deferment, repayment plan, or loan modification, loan servicers historically may begin the foreclosure process after as few as three months of missed mortgage payments,” he explains. “This is unfortunately often the point of no return.”

For more smart financial news and advice, head over to MarketWatch.

Source: realtor.com

How to Save Money For Your First Home

It’s often said you’ll never forget your first home — and we couldn’t agree more! For most, a home is one of the biggest financial investments you’ll make. While this can seem scary, there are plenty of tips and helpful hints to help you save money for your first home. Our first-time buyer’s guide has everything you need to know from choosing the right down payment option, to how COVID-19 has changed the real estate market. Besides taking your home buying journey through Homes.com, here are a few key things you can be doing to save:

A budget is your best friend

There’s no such thing as “saving too early” — every home buying journey should begin by determining your target price range that pairs with all the must-haves and nice-to-haves you’re looking for. Then, decide what your down payment estimate will be. Your down payment depends on the type of mortgage you decide on and its lender. And if you need private mortgage insurance, your down payment will be smaller. Some loan options will require as little as 3% — but it’s better to go ahead and pay the largest amount possible. The more you pay in the beginning, the less you’ll need to borrow and the less you’ll have to pay over time. This will also lower your interest rate! You’ll also want to factor in closing costs, agent fees and taxes into this budget plan. States also offer first-time buyer assistance programs — check out a complete list here.

(Read More: 5 Things Homeowners Should Know About Creating A Budget)

Make extra debt payments

Lenders look at your debt amount vs. your monthly income to determine if you’re able to afford your dream home. While it seems overwhelming to spend more money while you’re trying to save, this investment will continue to help you down the road. Even if you’re only tackling a small amount, you’re decreasing the amount of overall payments and timeline of your debt. 

woman budgeting for her first homewoman budgeting for her first home

Start “paying” your mortgage now

Think of this as a practice round — every month, after paying your current rent, put the difference between your assumed future mortgage into your savings. The key here is to do this before your other monthly expenses add up. If this is your “last” priority at the end of the month, you’ll constantly make excuses and put your money elsewhere. Don’t get trapped by this idea; save money for your first home before you have to!

(Read More: So You Want to Start Saving for a Down Payment? – Now What?)

Reduce your monthly expenses

This seems like a “no-brainer” and a “no way” all at once. If you’re living paycheck to paycheck, there are still ways to save money for your first home! Examine your monthly expenses and find small ways to cut costs. Whether that’s limiting your eating out expenses or cutting down your grocery bill, setting a small amount into your savings will continue to add up. 

Put your retirement on hold

This seems scary, especially if you’re already contributing to your retirement plan. It’s important to note this isn’t meant to be a permanent fix, but can make a huge difference while you’re saving. An easy way to contribute, but only if you’re not anticipating your retirement any time soon!

Ready to put these tips into practice? We’ll be waiting for you at Homes.com to guide you through your first home buying process. 


Andrea is a recent college graduate who loves writing, social media and coffee! She loves covering celebrity home listings, keeping up with the latest style trends and working with the Homes.com team!

Source: homes.com

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