"Up" in the air

Being a parent we can't help but get caught up in watching cartoons with our kids. And yes, there has been times when our kids have gone to bed, then Keith and I find ourselves still watching the cartoons. Something that, honestly, I hope I never grow out of! ;)

One fond memory I have is taking my daughter to see the movie "Up" in 2009. It was so cute, and made us both tear up a bit. Of course the "Realtor" in me started asking "Why didn't Carl just sell his house"!

After all he was offered double the last offer was, what seller wouldn't jump at that!?

 Then I brought myself back to reality and told myself it was just a movie and to enjoy it with my daughter!

If I was a little more nerdy I could say, just for fun lets pretend this wasn't a fictional scenario and take a look at what would have happened if Carl had make the financially sound decision to sell his home to the developer. We would need to look at the location of the home, next the size of the home (ie: number of beds, baths, sq ft), lastly we would look at the price per sq ft of comparable homes.

It can be done, I've seen people do it! However, I prefer to keep the mind set that Carl was just as happy going on his adventure with Russell, never realizing the financial mistake he made.

~CREDIT TIPS~
A good credit score is important for more reasons than just obtaining new credit. These days, it can be factor in everything from landing a new job, to getting the best deals on your insurance policies.
1) A 100 Point Drop for One late Mortgage Payment? - Sad, but true! A single 30 day late mortgage loan payment can cause your score to drop by as much as 100 points. Credit scoring algorithms vary based on many factors and there are also instances where the damage can be even greater.

2) 90 Days Late - Not only can this shave 100 points and more from your score, but it can also take as long as 7 years to erase the penalty for this. This is certainly a situation you want to avoid and one of the best ways that you can do this is to maintain an emergency cash reserve account equal to at least 3 months of living expenses or more. 

3) Adding Up The Cost - At the time, a single missed payment will only cost you a late fee, but when the expense really adds up is on your next loan or a missed opportunity. Low credit scores typically mean a higher rate and cost than can add up to hundreds of thousands of dollars of extra interest expense over the life of a loan.

4) Few Plan on This Happening - Yet it does. There are certainly things beyond our control such as accidents, illness, job loss, family issues, etc. At other times, it can just be carelessness or even the result of a hectic life. If you're prone to forgetting or don't have a scheduled time to sit down and pay bills, it can help to set up auto payment through your checking account or to put a perpetual reminder on your calendar. 

Opportunities and needs come up sometimes when we least expect them. Allowing payments to be made late is not something that we can readily fix after the fact as little other than time will decrease the negative impact. Since we can't speed up time, this leaves prevention as the one sure remedy!

Then & Now

Did you know that you can purchase a median price home today for a payment that can be lower than it was for the same home 30 years ago? Whats even more amazing is that when we consider that with inflation, that payment is much smaller percentage of average income than it was back then.

Let me give you an example, but please remember that these are for illustration purposes only. Prices are based on U.S. median average sales prices, rates are reflective of a 30 year fixed rate loan for 1981 and early in 2013, Principal and Interest payments are based on an 80% loan to value, taxes are based on a factor of 1.5% of the sales prices and insurance is based on a cost of $3 per $1000 of loan amount. Actual current rates, taxes, insurance, etc., can very at any time.

              1981 Home                                         2013 Home
Median Priced Home was: $67,000           Median Priced Home: $176,800
30 Yr fixed Principal & Interest: $824   30 Yr. fixed Principal & Interest: $645
Taxes: $83.75                                           Taxes: $221
Insurance: $13.40                                      Insurance: $35.36
TOTAL PAYMENT: $921                      TOTAL PAYMENT: $901
Income to Qualify: $36,855                       Income to Qualify: $36,056

The down side to this? It won't last. Interest rates are at a historic low, and once the economy improves or the Fed takes its proverbial foot off the gas pedal, mortgage rates will rise again.
Are you ready to take advantage?

Its Spring!

Now that Spring is here, its time to throw open the windows and tackle projects that we've been putting off all winter:
1) Trim tree branches
2) Touch up any peeling paint
3) Remove leaves and debris from around home and A/C units
4) Seal any leaking windows and doors.
5) Reseal any natural stone surfaces and repair grout in kitchen and bathrooms

Since the market is showing a positive improvement, now might not be a bad time to look at your home before putting it on the market. Fixing small things like the list above can improve, value and curb appeal.

2012 4th Quarter Update!!

Perspectives on Real Estate

My friend sent this to me! Had to share because it is so accurate its scary! LOL!

Its on the Rise

As a busy mom I try to find time to do some fun activities with my kids. My mom moved here about 2 years ago and she has a pool where she lives. So of course we try to take the kids swimming. Its fun, and wears them out for later! :)
Do you remember when you were a kid going swimming and getting the life preserver and trying your best to hold it under the water? Didn't work so well. They are designed to float. This thought brings me to my subject for today. Rising Rates.
Interest rates are rising to, and the Fed alone cannot hold them down forever.
Are you prepared to take action before it's too late?

1) The Winds of Change: The actions for the Fed are both very real, yet artificial in nature. They work, but as in nature, physics and economics, the laws, fundamentals, and truths always rise to the surface in the end. In fact, we've recently seen that the consensus of the market is far more influential than the Fed holding its finger in the dyke. When the majority of the market participants begin to act en-masse, there is little if anything effective enough to counteract the trend.

2) The Trouble with Targets: Lately, the Fed had taken to announcing their benchmarks for letting the preserver go, whether it's inflation within the ideal range, or the unemployment rate at 6.5% everyone now knows where the bulls eye lies. Smart investors operate ahead of the curve and will exit the scene before the tidal wave hits. They know it's safer to be alone at sea than with the crowd on shore.

3) The Factors: There are many things that can contribute to rising rates from positive economic news here and abroad to whispers or hints of policy change coming from the Federal Reserve Board of Governors itself. The collective sentiment and actions of the mortgage backed securities investors be they hedge or pension funds, institutions, sovereign nations or any of the many other groups at play are the ultimate arbiter of what mortgage rates will do and those forces acting in unison making the market regardless of what the the Fed might like. 

4)  What can we do? As individuals, we can't change the market but we can take advantage of it. How so? We can lock in a rate before it changes and we can lock it in for as long as a loan is structured to last. Whether it's a hybrid ARM loan for 3, 5 , or 7 years or a fixed rate for 10, 15, or 30 years, the choice is ours and there's great certainty that comes with that. A fixed monthly mortgage payment for as long as we foresee using that loan is a great way to create permanence in an otherwise uncontrollable sea of change.

Rising rates are upon us now and while it's rarely a straight line up, there's not much merit in gambling at this point in the hopes of getting something better later. As well, it's not just rates but home prices that are on the rise again. The compounding of higher rates and prices can make what's affordable today become out of reach tomorrow.