How to Save For a Home in 12 Months

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One of the largest hurdles for prospective homebuyers is coming up with the down payment and closing costs. The idea that you have to front thousands of dollars can seem daunting and discouraging to some. But as long as you and your family are focused and disciplined, you can save for a home in 12 months.

How to Save For a Home in 12 Months

Track your spending

The best way to improve any habit is to track your habit and hold yourself accountable to daily, monthly, and yearly goals. There are many online apps that track your spending and keep a running total of the amounts that you spend on specific items. This allows you to understand where you are spending most of your money. If you are spending 60% of your income on food, it probably means you are dining out frequently which can really add up. Coffee alone can add up to hundreds of dollars per month. If possible, consider making coffee at home as it saves a ton of money in the long run.

Make a budget

Once you’ve understood where you’re spending your money, make a budget and stick with it. If you find that you’re subscribed to similar services, pick one and cancel your subscription to the other. For example, if you are paying over $20/month for two music streaming services, you likely won’t even notice if one is gone. Additionally, making sure you turn off the lights when you leave your home, and turning the heat down during the night can help you save on energy bills. Finally, a good way to save for a home in 12 months is to cut out going out. If you want to hang out with your friends, invite them over to your home. Just because you’re not going out, doesn’t mean you have to stop seeing your friends!

Be a deal hunter

While it’s not the most glamorous life, thrifting and coupon clipping can actually save you hundreds of dollars per month. If you shop at an expensive grocery store and find the same items for cheaper at a different grocery store, try shopping at the new store for a while. You’d be surprised how much money you can save by cutting down grocery spending. Additionally, if you are looking for simple items such as sandwich bags or glass jars, stores like the dollar store have similar items for much less.

Look for a side hustle

Side hustles are common, especially if you’re saving up for a big purchase. See if there are ways to work extra hours at your job. Additionally, driving for a ride share service during your days off, can give you an extra few hundred dollars at the end of the month. Think about your skills and talents that you could parlay into freelance income.

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Eastside Market Update October 2018

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It appears that balance is slowly returning to the local housing market. Home price growth slowed in September. Inventory continued to climb, but is still far short of the four to six months that indicate a normal market. Homes are staying on the market longer, giving buyers the breathing room to make the right choice for their situation. With our region’s healthy job growth, and demand still exceeding supply, it’s likely to take some time to move to a fully balanced market. Check out the Eastside market update October 2018.

Eastside Market Update October 2018

Eastside

eastside market update october 2018
Home price increases moderated into the single-digits in September. The median price of a single-family home on the Eastside was up 4 percent from the same time last year to $890,0000 but down from a median price of $935,000 in August. Inventory increased significantly and price drops jumped. While the market is softening, the recent expanded presence of Google and Facebook on the Eastside means demand should stay strong. In addition, the area’s excellent school system continues to be a large draw for buyers both locally and internationally.

King County

eastside market update october 2018
Inventory was up 68 percent year-over-year in King County due to a higher number of sellers listing their homes and fewer sales. There is now more than two months of inventory in the county, a number we haven’t seen in nearly four years. Despite the increase, there is a long way to go to reach the four to six months of inventory that is considered balanced. In September, the median price of a single-family home was $668,000; an increase of 7 percent from the same time last year and virtually unchanged from August.

Seattle

eastside market update october 2018
Inventory in Seattle surged in September from a year ago. Only San Jose, CA saw the number of homes for sale rise faster than Seattle last month. The median home price in September was $775,000. Up slightly from the $760,000 median price in August and a 7 percent increase from last year. The double-digit price growth of past years appear to be waning and overzealous sellers who listed their homes at unrealistically high prices have been forced to reduce them. Bidding wars have declined and the typical well-priced house is now selling right at asking price.

You may also like: Digital Strategy: Targeting Homes For Your Buyers

Digital Strategy: Targeting Homes For Your Buyers

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Whether reaching overseas buyers or local agents, I’m committed to promoting your home using digital platforms that go beyond the usual real estate websites. Here are 4 digital strategies that target homes for your buyers.

Buyer-targeted advertising

Through a partnership with Adwerx, I will promote your home to local buyers on high-traffic websites such as Facebook, CNN, ESPN and USA Today, reaching 7000+ local buyers each week.

Overseas buyer reach

Windermere’s partnership with Waijule.com lets me promote your property online to Chinese buyers, an important segment of our international market, in their language and behind China’s internet firewall. In King County alone over 400 brokers interface with their Chinese clients through the Waijule platform.

Broker-to-broker e-marketing

My office will promote your listing to the top buyer’s agents in your area via our Windermere This Week email. With high open and click-through rates, these campaigns generate lots of interest and action.

Social media sharing

Once listed, your home will be featured on my office’s Facebook page and other social media platforms. This makes it easy for you to share posts with your friends and family (according to the National Association of Realtors®, one in 12 buyers learned of the property they bought from the seller, a friend, relative or neighbor).

homes for your buyers

You may also like: 5 Common and Profitable Home Improvements

5 Common and Profitable Home Improvements

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Return on investment is one of the top things to think about when remodeling your home. Whether you’re looking to sell your home, or simply want a change, here are the top 5 most profitable home improvements to add to your space.

5 Common and Profitable Home Improvements

Deck Addition

Having a private and useable outdoor living space could be the selling factor of your home. The average deck addition costs about $10,000 and can resell for about $8,000. This means 80% of your cost is recouped. If you buy the wood yourself and can gather up a few handy friends to do the labor, the project would be less than $10,000. This means you could potentially recoup 90-100% of the deck addition.

Minor Kitchen Remodel

Without doing a major kitchen remodel (i.e. tearing down walls, adding square footage, redoing the floors etc.) you can actually recoup quite a bit of your expenses. For example, if you want to paint your cabinets, replace the hardware, replace light fixtures, and upgrade new appliances the average cost is about $19,000 and could resell for about $15,000. This means you could recoup about 80% of your costs. Updating the kitchen is one of the most common and profitable home improvements since the kitchen is the heart of the home and the room where people spend a lot of time.

Garage Door Replacement

After your teenage kids have backed into the garage door a few times, it’s a good idea to replace the garage door, especially when you’re ready to sell. The average garage door costs about $1,600 and can resell for about $1,410. The means you recoup almost 90% of your cost. Especially if your garage is in the front of your home, it’s a good idea to make sure it’s presentable to those driving by.

Attic Bedroom

The average cost to redo an attic is about $52,000 and could be resold for about $40,000. This means you can recoup about 77% of your costs. By adding a bedroom to your home, you’re increasing the livable space as well as the number of bedrooms which automatically increases the value of your home. And if you’re able to sneak a small bathroom into the space as well, it really starts to increase the resell value of your home.

Siding Replacement

Over time, the siding of your home becomes worn and starts to look older and becomes less effective. The average siding replacement costs $12,000 and can resell for almost $10,000. This means you can recoup a little over 80% of your costs. In addition to repairing structural damage of the old siding, you’re boosting your curb appeal and the color of your exterior looks fresh and clean.

You may also like: 6 Expenses That Might Surprise First Time Home Buyers.

South Sound Labor Day Activities

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Labor Day is just around the corner, and while you could get a lot done around the house this weekend, wouldn’t you rather spend your time celebrating the end of summer and the beginning of Fall? Check out these 8 South Sound Labor Day Activities for you and your family.

South Sound Labor Day Activities

Bumbershoot Music Festival

Bumbershoot is a beloved yearly music festival that travels to Seattle every Labor Day. All weekend long you can listen to mainstream and up and upcoming music, munch on delicious local food, partake in arts and crafts and dance with fellow Seattleites.

Northwest Trek

This is the perfect place to visit with your kiddos. Northwest Trek Wildlife Park has a jam packed weekend full of difference shows which include eagles, cougars, bears and owls devouring their favorite food.

Washington State Fair

It’s time to Do the Puyallup! The Washington State Fair is one of the most popular South Sound Labor Day activities. There are endless activities for you and your family to participate in at the state fair. And we can’t forget to mention the state of the art food!

Bremerton Blackberry Festival

This year will be the Bremerton Blackberry Festival’s 29th anniversary! This festival features arts and crafts for the kids as well as a lot of tasty blackberry treats! This festival helps prolong that summer feeling!

Mariners Game

So, how about them Mariners? The Mariners are playing for their lives this weekend, hoping to secure a spot in the playoffs! They will be playing the Baltimore Orioles at home this Monday, and tickets are as low as $8! If you’ve been looking for a game to go to with your family, Labor Day is a good one to see.

Hiking

If the outdoors is more your scene, check out the hundreds of trails in Western Washington. The weather is supposed to stay sunny all weekend, and under 80 degrees, which is optimal hiking weather! Rattlesnake Ridge is a popular family hike located in North Bend, just 30 minutes outside of Seattle. This hike is just under 4 miles round trip which is great for beginners or young family members.

Snoqualmie Falls

Snoqualmie Falls is one of the tops things to see in Western Washington. Did you know they prepare a scenic antique train ride through the upper Snoqualmie trail over Labor Day? Then once you’ve marveled at the views, stop in for a bite at The Attic at Salish Lodge & Spa. It’ll surely be quite the site to see!

You may also like: Now Is The Time to Buy a Home in Pierce County.

10 Mortgage Commandments

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Whether you’re ready to buy a new home or you’re looking at refinancing your current home, it’s important to stay compliant with your loan guidelines to get the best rate for your home. Here are 10 mortgage commandments to follow as you prepare for your next chapter.

10 Mortgage Commandments

Commandment 1: Thou shalt not change jobs

This is one of the most important mortgage commandments. As you go through the loan application process, your lender and underwriter are looking closely at how big of a risk you are as a borrower. Sporadically changing jobs right before you apply for a home loan can pose red flags on your account.

Commandment 2: Thou shalt not buy a car, truck or boat unless you plan to live in it

Making any sort of large purchase before buying a home or refinancing your loan also is seen as a red flag. Your lender wants to make sure you’re ready to take on a mortgage loan, and if you buy large items right before you close, it could affect the rate and limits of your loan.

Commandment 3: Thou shalt not max out your credit cards

Credit pays a big role in determining if you’re able to qualify for a loan and if so, at what mortgage rate. It also plays a factor in what type of loan is best for you, so you can see why maxing out a credit card right before you close is a bad idea.

Commandment 4: Thou shalt not close any accounts

Again, credit is important in the mortgage process, and closing accounts can drop your credit score fast.

Commandment 5: Thou shalt not spend your down payment money

Saving for a down payment can take years of hard work. So stash away your savings and don’t use it for anything but an emergency. If you aren’t able to pay your upfront downpayment, you will likely disqualify for a home loan.

Commandment 6: Thou shalt not buy furniture (or anything else) before your loan closes

A lot of times people will buy furniture and appliances on credit cards, which generally is fine, just not right when you’re about to buy a home. Avoid all big purchases and opening lines of credit until after you have the keys.

Commandment 7: Thou shalt not become self-employed

Along the same lines of switching jobs, your lender and underwriter want to see you have a steady source of income. By becoming self-employed, it poses questions to your lender and underwriter about your ability to pay a monthly mortgage.

Commandment 8: Thou shalt not make any large undocumented deposits into your bank account

Any large deposits in your bank account will look suspicious to your lender. If you receive a cash gift to help for your down payment, be ready to show documentation that shows the bank account it came from and a letter signed by your gifter.

Commandment 9: Thou shalt not open/close/change bank accounts

Since you submitted your bank statement to your lender at the beginning of the process, changing bank accounts will cause you to submit many more forms of documentation, as well as complicate the entire remaining home buying process.

Commandment 10: Thou Shalt Not Co-Sign on a Loan for Friends or Family

Any loan you sign you name on means that your credit is attached. By signing for a friend, you have now opened a new credit line. You can see how this could significantly delay or even terminate your home loan process.

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Breaking Down Your Credit Score

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Your FICO credit score ranges from 300-850, where a higher number indicated lower risk. As you apply for a home loan, your credit score is a large factor in determining the amount of your home loan. Here are 5 factors that make up your credit score.

Breaking Down Your Credit Score

Payment History

Payment history makes up 35% of your overall FICO credit score. This section includes your account payment information, including any delinquencies and public records. If you make a late payment, it will significantly affect your credit score. As you might expect, the repayment of past debt is the number one thing you can do to lift your credit score the fastest. Making on-tome payments is one of the best ways to maintain a high score. Using auto-pay for your monthly expenses can help you stay on track.

Amount Owed

Amounts owed makes up 30% of your overall FICO credit score. This section includes how much you owe on your accounts. The amount of available credit you’re using on revolving accounts is heavily weighed. It is a good idea to keep low credit card balances and not use too much of your credit.

Length of Credit history

Length of credit history makes up 15% of your overall FICO credit score. The longer you have your credit lines open the better. This section also includes the timeframe since an account’s most recent transaction. Newer credit users have a hard time achieving high credit scores since those with a longer credit history have more data. When applying for a home loan, your lender wants to see that you have an extensive history of paying bills on time.

Credit Mix

Credit mix is also known as types of credit used. This section makes up 10% of your overall FICO credit score. FICO credit scores consider the combination of credit cards retail accounts, installment loans, finance company account and mortgage loans. As you can see, credit mix is not a huge factor in determining your overall score unless there’s very little other information from which to base your score. However, there is something to be said that if you have the decision to open your fifth retail card or an auto loan, utilizing an auto loan could help broaden your credit mix.

New Credit

New credit makes up 10% of your overall FICO credit score. When jumping into the home search, it’s ok to get your credit pulled but getting to many hard pulls from multiple companies can ding your new credit category of your credit score. So how you shop for credit and within what timeframe can affect your score. Once you get approved, it’s good to act with intention to find the right home in a timely manner.

You may also like: A Breakdown of Conventional vs. FHA Loans in King County

Mortgage Terms Explained

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Whether it’s your first time buying a home, or your third, it’s important that you understand the mortgage terminology so you can feel confident about your home loan. Here are the top 8 mortgage terms explained.

Mortgage Terms Explained

Fixed Rate Mortgage

A fixed rate mortgage is a mortgage where the interest rate and the term of the loan I negotiated and set for the lift of the loan. The terms for a fixed rate mortgage can range from 10-40 years depending on the type of loan.

Closing Costs

Closing costs are the costs that the buyer must pay upon closing on the home loan. These costs consist of attorney fees, recording feed, and other fees associated with the mortgage closing. Man times in buyer’s markets, the closing cost can be negotiated between the buyer and hot seller. This is one of the most common mortgage terms.

Loan to Value Ratio (LTV)

The loan to value ratio is done by dividing the amount of the mortgage by the value of the home. Lenders will typically require the LTV ratio to be at least 80% to qualify for a conventional loan or a refinance.

Private Mortgage Insurance (PMI)

When the LTV is higher than 80%, borrowers need to pay PMI on an FHA loan. This insurance is a guarantee to the lender that until the borrower reaches 80% LTV, they are covered from default. At 70% the PMI is required to be taken off.

Escrow

At the closing of a mortgage, the borrowers are generally required to set aside a percentage of the yearly taxes to be held by the lender. Additionally, the lender will collect additional money to be used to pay taxes on the loan. This escrow account is maintained by the lender who is responsible for sending the tax bills. If property taxes skyrocket, you will need to pay a higher monthly rate to keep your escrow account in good standing.

Equity

Simply, equity is the difference between the value of the home and the mortgage loan. Over time, as the value of the home increases and the amount of the loan decreases, the equity in the home generally increases. Especially in booming markets where home values are skyrocketing, the equity of home are increasing at a fast rate.

Amortization

The amortization schedule outlines how the loan is intended to be repaid. If you sign a 30 year mortgage, the amortization schedule will include the amount borrowed, interest rate paid and term. The actual schedule will give you an spreadsheet of all you monthly costs broken down over 30 years.

Appraisal

The appraisal is an inspection conducted by a professional appraiser who will give you an estimated value based on the physical inspection and comparable houses that have been sold recently. This is the protect the buyer, ensuring they are paying a fair amount for the value of the home.

You may also like: A Breakdown of Conventional vs. FHA Loans in King County.

A Breakdown of Conventional vs. FHA Loans in King County

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Buying a home is a very exciting step in your life, but could seem daunting and overwhelming if you have credit hurdles or a low income. Here’s what you should know if you’re weighing whether conventional vs. FHA loans in King County is the best way to go.

A Breakdown of Conventional vs. FHA Loans in King County

What is a conventional loan? What is a FHA loan?

One of the first things to know about Conventional vs. FHA loans in King County is that a conventional loan is a mortgage that is not insurance by any government agency, while an Federal Housing Authority (FHA) loan is backed by the government. In simple terms, FHA loans are popular among first time homebuyers and millennials since it has lower requirements when it comes to credit score and down payment.

Credit Score

With conventional mortgage loans, home buyers are required to have a 620 or higher credit score. With FHA loans, scores as low as 580 are acceptable to qualify for a mortgage. It is important to note, the higher your credit score, the lower your mortgage rate for both conventional and FHA loans in Pierce County.

Down Payment

With conventional loans, a 20% down payment is typically required by the home buyer. However, talk with your lender as they may be able to lower the bar to 10% based on your circumstance. With an FHA loan, a down payment as low as 3.5% is acceptable to qualify for a home loan. For first time home buyers who haven’t saved much, the FHA mortgage loan makes it possible for them to obtain a home loan.

Mortgage Insurance

One of the largest benefits of a conventional loan is that because the home buyer pays 20% down, the mortgage insurance can be canceled since the loan to value ration reached 80%. If you pay less than 10% for your conventional loan down payment, monthly insurance payments are required until you reach a loan to value ratio of 80%. The biggest down side to FHA loans comes in the form of monthly mortgage insurance payments. While it’s wonderful to be able to qualify for a loan with 3.5% down, it means monthly payments, sometimes for the duration of the mortgage term, are required.

Loan Limits

It’s a common misconception that FHA loans are for low income borrowers only with credit challenges. In a market such as the booming Seattle Tacoma market, the FHA loan limit is nearly $700,000. That does not scream low income borrowers.

Hurdles

Conventional mortgages generally present fewer hurdles in terms of processing and inspections. While FHA loans can be advantageous for some home purchases, some sellers don’t want to deal with the challenges involved with the FHA loan process and it’s borrowers. In a competitive bidding situation where sellers have many offers to choose from, this can but the buyers at a disadvantage.

You may also like: Now Is The Time to Buy a Home in Pierce County.

Top 4 Benefits of a Home Security System

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Now that we’re in the thick of summer, you’re probably planning your summer vacations. Unfortunately, summer is the most popular time for robberies because of vacant homes, so it’s important that you have a security system in place to protect your home and valuables. Here are the top 4 benefits of a home security system.

Top 4 Benefits of a Home Security System

Protect your home

One of the most obvious benefits of a home security system is to protect your home and family from intruders. Homes without security systems are almost 3x more likely to be targeted by a burglar. This indicates that the mere presence of a security system can be enough to deter burglars. In the case of a break in, having a security system provides family members with enough warning to get to a safe location in or outside of the home while the systems dispatched local authorities.

Provide you with peace of mind

The presence of a home security system can provide peace of mind to you and your family. The next time you wonder if you closed the garage door, you won’t need to drive back home to check, you’ll just be able to look on your phone. Many modern security systems can close doors remotely through and app on your phone, as well as show camera footage of what’s happening in real time. Finally, one of the most popular benefits of a home security system is that it is beneficial for families that often leave family members at home. Whether it’s children or elderly parents, home security systems can provide peace of mind.

Keep an eye on your pets

Especially in the summer, it can be hard to bring your pets with you while you run errands. Instead of cutting your errands short because you’re worried about what Fido has gotten into at the house, you can check your security system app on your phone to see them in real time. A lot of security systems today have two-way audio, meaning in your pet is misbehaving, you can talk to them through your phone and they can bark back.

Save on homeowner’s insurance

Generally, having home owner’s insurance is a mandatory part of being a home owner. The cost of the coverage depends on location, coverage, insurance company, etc. In general, home owners receive a 10-20% discount in their insurance by having a functioning home alarm system installed. Since the cost of a home security system is the number one reason why people don’t install them, this is one of the best benefits of a home security system as it can help you save in another area.

You may also like: 5 Ways to Keep Your House Cool Without Air Conditioning

5 Ways to Keep Your House Cool Without Air Conditioning

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In these warm months it can be tempting to crank the AC if you have it installed, or plant yourself in front of a fan. But these aren’t the only ways to stay cool. While central air is great, it can also be quite expensive to run 24/7 in the summer. Here are 5 ways to keep your house cool without air conditioning.

5 Ways to Keep Your House Cool Without Air Conditioning

Close the blinds

By keeping your blinds closed, you prevent the sun rays to heat up your home and serves as one of the most popular ways to keep your house cool without air conditioning. Keeping you blinds closed can save you up to 7% on bills and lower indoor temperatures by 20 degrees. So when you wake up in the morning, keep your bedroom blinds closed and go about your day. You will thank yourself when you want to sleep that night and you room is relatively cool. This is especially true for south and west facing windows as they receive the harshest light.

Open windows in the morning

The coolest part of the day is right when you wake up. Make it part of your morning routine to crack your windows open from 8am-12pm to allow the cool air to fill your home. After noon, the air outside tends to rise above the indoor temperature, so at that point you’ll want to close your windows. Because of these benefits, opening windows in the morning is one of the most popular ways to keep your house cool without air conditioning.

Place a fan in the window

While you open your windows during the coolest part of the day, place a fan in your window sill, so cool air is quickly entering your home. If you want extra cold air try filling a mixing bowl with ice, and position is at an angle in front of a large fan so the air whips off the ice in an extra cold way. This trick helps keep you house cool without air conditioning costing you a fortune in the summer.

Swap sheets

While flannel and fleece sheets are great for keeping you comfortable in the winter months, cotton is a smarter option this time of year as it breathes easier and stays cooler. Nowadays, there are cooling pillows sold in many stores, so if your head tends to heat up during the night, a cooling pillow might do the trick for you.

Start grilling

Using your stove or oven in the summer can and will make your home hotter. If you’re always feeling like its 100 degrees inside of your home, that last thing you want to do is heat it some more by boiling broccoli. Pan your meals around the grill so you can keep your house cool without air conditioning. Besides, grilled meals are often times lighter and more refreshing and can be more appealing in the summer.

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