Buying a Home Now Is A No-Brainer

Is now the right time to invest in a house?
Trick question. Actually, it's two questions.
Question No. 1: Is now the time to buy?
Question No. 2: Is buying a house a good investment?



The first answer is easy: With a few exceptions, if you have 20% to put down and good credit, now is a great time to buy. That's been the case all year, and I'd argue that we're probably closer to the end than to the beginning of the really great time. Let me explain.

Back in January home prices had dropped 28% from their peak. More important, interest rates were at historical lows. By locking in a mortgage for 15 or 30 years on a value-priced home, you were getting an incredible deal, even if home prices decreased.

At the time, I thought that prices and rates were more likely to rise than fall. I was half right: Home values have been inching up since the spring, but mortgage rates, incredibly, dropped further.

By August (the latest numbers available) the median home price had risen 1% over a year ago, but 30-year rates had dropped a half-point to 4.5%. Assuming 20% down and a 30-year mortgage, the total cost of owning a median-priced home is now down $16,000 from a year ago.

Home values may waffle over the coming year, but because Americans take out such large, long mortgages, rates are what really matter. And I am more likely to grow hair than see 30-year mortgage rates drop below 4%. It's far more likely that rates (and the cost of ownership) will rise.

Now for question No. 2: Is a house a good investment?

First, it depends on what you mean by investment. If your definition is strictly about dollars returned, a house probably won't be a great use of your capital. If you bought the median-priced house today with 20% down, to recoup your total costs (and I'm not including property taxes and maintenance here) over three decades, the home's value would have to rise about 3% a year.

That's likely, but you'll almost certainly (we all hope) do much better than that in the stock market. The fact is, however, that that's the normal case for housing; the booms that began after World War II and in the late 1990s were the exceptions.

That said, the key point to remember is this: Buying a fairly priced home at today's rates may be the best deal you will ever get. And who knows? It may even turn out to be a good investment.



Courtesy of CNNMoney

Time to Review Your Annual Credit Report

Rick Schutte, Broker/Owner of Coldwell Banker Koetje Real Estate in Oak Harbor, Wa. interviews Lyn Bankowski, senior loan originator, from AlaskaUSA Mortgage about the need of checking your annual credit report.

In this interview, Lyn mentions the free reports can be found at https://www.annualcreditreport.com/. This central site allows you to request a free credit file disclosure once every 12 months from each of the nationwide consumer credit reporting companies.  AnnualCreditReport.com is the official site to help consumers obtain their free credit report.  You can also go to http://ftc.gov/freecreditreport for more information. 
The Fair Credit Reporting Act guarantees you access to your credit report for free from each of the three nationwide credit reporting companies every 12 months.

For more information on credit reports and real estate, please contact us at any time.  

Consequences That May Impact Consumers Looking to Purchase or Refinance a Home in the Future

For months there has been an ever-growing fear that our economy is headed towards deflation, which is when prices on goods and services are falling lower. Deflation is the exact opposite of inflation, which of course occurs when prices climb higher. Remember, inflation is the arch-enemy of Bonds, so fears of inflation negatively impact Bond prices and home loan rates. But fears of deflation are good for Bonds and home loan rates. That’s because the fixed payment that a Bond provides to an investor goes further in a deflationary environment. So, the recent fears of deflation have helped Bond prices move higher and home loan rates move lower.


But last week, future deflation/inflation expectations changed... and investors in the Bond market started betting that the Fed will be successful in "creating inflation" via their Quantitative Easing plans, and will thus avoid continuing down a deflationary road. This was evidenced by the results of last week’s 5-Year Treasury Inflation Protected Securities (TIPS) auction, which saw investors buying TIPS at a premium since they were confident they’d be able to benefit from the increased inflation that should result from the QE2.

Of course, investors aren’t the only ones impacted by this. The media has already been chattering that the Fed has to be careful not to let inflation get out of control in the coming months and years. In fact, just last week, there was a headline explaining how another round of Quantitative Easing brings the risk of "unleashing the 1970s inflation genie." Consumers who are looking to purchase or refinance a house should also take note of that possibility - since even talk of inflation can impact home loan rates negatively. After all, a rise in inflation would be bad for Mortgage Bonds and, as a result, for home loan rates.

The good news is that home loan rates are still near historic lows for the time being. If you or someone you know would like to see how you can benefit from the current situation, call or email us today.

Information courtesy of Alaska USA Mortgage

Tips for Whidbey Island Home Sellers

Most Real Estate agents say spring is the season to sell a Whidbey Island home, but don't rule out fall just yet. There may be fewer buyers, but they tend to be more motivated. The key is to find them fast, because you don't have much time before the holidays kick in and real estate really slows down. Try these selling tips:

Price aggressively. You don't have the luxury of starting high and making incremental price drops. Be competitive - price your home 5% to 15% below comparable homes on the market.

Stage it to sell. Fall is one of the most beautiful times of the year on Whidbey Island, but it can also be hard on home maintenance. Make sure the front yard is clear of leaves, clean out gutters and downspouts, and touch up paint. Incorporate tasteful fall decor. If you have a fireplace, make it the focal point of the room.

Be flexible. Bargain hunters are out in force in the fall, so don't be discouraged by low-ball offers. See them as opportunities to negotiate. If you don't want to come down on price, be creative, such as offering to pay for closing costs or repairs.

Budgeting Tips to Help you Buy Your Home

TODAY WE WILL DISCUSS BUDGETING AND HOW TO GET STARTED! I AM NOT GOING TO TALK ABOUT THE FULL DEAL HERE. JUST THE BASICS. IT CAN BE OVERWHELMING… I KNOW. SO LET’S BREAK IT DOWN. IF YOU WANT THAT FIRST HOME TO CALL YOUR OWN, AN UPGRADE, A SECOND HOME, INVESTMENT PROPERTY OR JUST TO DO BETTER WITH THE DOLLARS YOU HAVE, THEN THIS IS A STARTING PLACE.

FIRST, START WITH A REALLY GOOD BUDGETING FORMAT. ONE WITH MORE THAN JUST A FEW GENERIC CATAGORIES. THINK ABOUT THE DOLLARS YOU SPEND EACH DAY, WEEK, MONTH AND YEAR. THEY DON’T FALL INTO JUST A COUPLE OF CATAGORIES. A BUDGET SHOULD REMIND YOU OF THOSE NORMAL EXPENSES THAT ARE NORMAL FOR YOU, EVEN IF THEY ARE NOT NORMAL FOR MOST OF THE POPULATION. IF YOU DON’T HAVE ACCESS TO A GREAT BUDGET FORMAT, LET ME KNOW AND I WILL SHARE ONE WITH YOU. IF YOU DON’T SEE A CATEGORY YOU NEED, ADD IT.

SECOND, BE HONEST. WE EACH LIVE IN OUR LIVES AND HOMES DIFFERENTLY. SOME FOLKS ARE HOMESTEADERS. EACH WEEKEND AND HOLIDAY IS PLANNED AROUND HOME IMPROVEMENT PROJECTS, ENTERTAINING AND PUTZING AROUND THE YARD AND HOME. OTHERS, HIT-AND-RUN. HOME IS JUST A PLACE TO DROP OFF THEIR PERSONAL ITEMS, CHANGE CLOTHS AND GO SOME PLACE FROM. EACH WEEKEND AND HOLIDAY IS PLANNED AROUND OUTSIDE INTEREST AND ACTIVITIES. EACH OF THESE FOLKS ARE GOING TO HAVE A BUDGET THAT LOOKS QUITE DIFFERENT. THINK ABOUT WHO YOU ARE AND HOW YOU LIVE AND SPEND THE MONEY YOU HAVE.

THIRD, BE SURE TO USE YOUR NET INCOME WHEN FIGURING OUT WHAT YOU HAVE TO WORK WITH. THIS IS WHAT IS LEFT AFTER TAXES AND REQUIRED DEDUCTIONS. IF YOU HAVE DEDUCTIONS FROM YOUR PAY FOR SAVINGS, INVESTMENTS, INSURANCE, ETC., (PRE-TAX OR AFTER TAX) THOSE NEED TO BE NOTED YOUR BUDGET AS WELL.

FOURTH, THINK OF WHAT YOU MUST SPEND AND WHAT IS OPTIONAL. NEEDS AND WANTS. THE BUDGET SHOULD REFLECT A PLAN FOR THE FUTURE AS WELL AS THE EXPENSES OF TODAY. IF YOU WANT IT AND IT’ S IMPORTANT TO YOU, PLAN FOR IT. MAKE A CATEGORY AND LOOK AT IT EVERY MONTH. EVEN IF YOU DON’T HAVE THE FUNDS TO ACCOMMODATE IT NOW, MAKE CHANGES AND PLAN AHEAD SO THAT YOU WILL. THIS IS WHERE DISCIPLINE AND GOAL SETTING COME IN.

FIFTH, RE-EVALUATE NORMAL EXPENSES AND BILLS. CHECK YOUR BILLS WHEN THEY COME. ARE YOU GETTING FULL BENEFIT FROM ALL THE SERVICES OFFERED? I RECENTLY WENT THROUGH MY OWN COMBINED CABLE, INTERNET AND PHONE BILL. THERE WERE SERVICES INCLUDED THAT MY FAMILY DOES NOT REGULARLY USE. I CALLED THE PROVIDER AND WE MADE A FEW CHANGES THAT SAVED US OVER $ 20.00 PER MONTH. ($ 240.00 per year)

SIXTH, IF YOU HAVE A SPOUSE, SIGNIFICANT OTHER OR ROOMMATE, EACH OF YOU NEEDS TO FILL OUT A BUDGET SEPARATELY AS A STARTING POINT. THEN SIT DOWN AND TALK ABOUT THE DIFFFERECES, EXPECTIONS, AND PRIORITIES. FROM THAT CONVERSATION CREATE ONE MASTER BUDGET THAT EACH OF YOU AGREES TO. WE ALL HAVE DIFFERENT OPINIONS. IF EVERYONE INVOLVED TAKES OWNERSHIP OF THE BUDGET, THEN THE CHANCES FOR SUCCESS ARE MUCH GREATER.

SEVENTH, PLAN FOR SAVINGS AND INVESTING. FOR MANY, THIS IS THE HARDEST. IF YOU ARE NOT DOING IT NOW, TIME TO START. YOU CAN START SMALL, EVEN $ 25.00 PER MONTH IS A START. WE ALL SLEEP BETTER AT NIGHT WITH MONEY IN THE BANK. LIFE IS UNPREDICTABLE. PLAN FOR THE BUMPS IN THE ROAD, THEY ARE PART OF THE JOURNEY.

EIGHTH, A BUDGET IS NOT A MAKE IT AND FORGET IT DEAL. IT’S A CONSTANTLY CHANGING AND EVOLVING PROCESS. MAKE YOUR BUDGET VISABLE, VIABLE AND USEABLE.

NINTH, IF YOU NEED HELP AND THE PROCESS IS OVERWHELMING, GET HELP. FIND TRUSTWORTHY, EXPERIENCED, HELP.

TENTH, TRACK YOUR RECEIPTS FOR PURCHASES, MONTHLY BILLS AND STATEMENTS. THESE ARE THE TRUTH TELLERS OF HOW YOU SPEND YOUR MONEY. EACH MONTH WHEN YOU SIT DOWN WITH YOUR BILLS AND BUDGET, USE THESE TO DETERMINE YOUR STREGTHS AND WEAKNESSES. MODIFY AS NEEDED.

PLEASE, KNOW THAT THIS IS JUST A STARTING POINT. MANY, MANY BOOKS HAVE BEEN WRITTEN ON THIS TOPIC. YOU MAY CONSIDER READING ONE OR TEN OF THEM. PERHAPS TAKE A CLASS OR ATTEND A SEMINAR. THESE TIPS ARE DESIGNED TO GET YOU THINKING AND MOVING TOWARDS A BETTER TOMORROW.

ALL THE BEST! LYN

Contributed by: Lyn Bankowski AlaskaUSA Mortgage

THIS IS INFORMATION IS NOT TO BE CONSIDERED LEGAL OR FINANCIAL ADVICE. PLEASE SEEK THE PROFESSIONALS IN THOSE FIELDS WHEN NEEDED.

Questions?? Questions?? Questions??

Short Sales? Foreclosures? REO Properties? Bank Owned Properties? HUD Repos? What kind of houses are these? Are they good Deals? Should I buy one?

VA? FHA? Conventional Financing? ARMS? 15 Year? 30 Year? What Down payment? Points? Buy Down? Closing Costs? Yikes, what should I do???

There are many opportunities and questions in today’s real estate market. I believe because there are also so many unknowns and choices that consumers are overwhelmed and fearful of making a decision. They don’t want to make the WRONG decision.

Our responsibility is to help you make the decision that is RIGHT for you. We are passionate about this. We want what is best for you. As professionals, we have been guiding home buyers and sellers through this maze for a long time. We are continually educating ourselves on the latest laws, trends, marketing ideas, and technology so that we can answer your questions and point you in the right direction.

If you are a buyer with questions or frustrations, let us help you with some answers. If you are a seller and need some counsel or want to know our marketing strategies, give us a call or email or visit our website. We consider it an honor to be of help to our neighbors and friends. Thank you.