Buying a Home

Market trends on home equity: The top ROI home improvements that contribute to home equity.

Beautiful Kitchen in Luxury Home with Island and Stainless Steel

Home equity is the market value of your financial interest minus the debt balance against it. Typically, the largest debt against your home is your mortgage. As you make mortgage payments against the loan, the equity of your home increases. You may also gain equity as your property appreciates in fair market value.1 Understanding your home equity as well as larger home equity trends is key for making a sound investment in property and then increasing your equity in that investment.

Once you’ve invested in property, you must decide which home improvements to make to boost the equity of your home. Before you consider large home renovations, start with the basics. When a potential buyer looks at a home, he assumes that the basic systems are running smoothly.2 No one wants to buy a home and then immediately sink thousands of dollars into a new roof, plumbing infrastructure, or HVAC system. Taking care of the basics will minimize monthly maintenance expenses and put your home in prime condition for potential buyers.
After the home is in good working order, think about tackling a larger renovation. Two of the best rooms to invest in are the kitchen and bathroom. In a strong housing market, a top notch kitchen or bathroom remodel frequently returns over 100% of the cost. People spend a lot of time in their kitchens and bathrooms and will be able to tell whether or not money was well invested in these areas of a home.

Do you live in an older home with only one bathroom? If space permits, it makes more sense to add a second bathroom than to renovate the only bathroom. If your home has two, three, or even four bedrooms and just one bathroom, adding a second bathroom may increase the sales price as much as 8.7%, which is more than double the rate for adding another bedroom.4
If you’re not anticipating a move in the foreseeable future, be honest with yourself about whether you’d get more use out of a bathroom or kitchen renovation. Even if you don’t get quite as much money back doing the remodel that you really want, you’ll get a lot more enjoyment out of the home.

As you weigh varying home improvement projects, think about the value of your house, the average home value in your neighborhood, the general state of the housing market in your area, when you plan to sell your home, and the projects that interest you the most.5 For example, an $8,000 stove is fabulous, but it simply doesn’t make sense to install it in a home worth $220,000. You want to choose home improvements that offer the biggest bang for your buck.

Read More »

What will Fannie Mae HomeReady do for Borrowers?

Blue Key and Great House

In August 2015, Fannie Mae announced a new option for would-be homeowners who have been turned down for conventional mortgages due to lower or moderate income levels: HomeReady. The goal of the program is to recognize that today’s households encompass several generations, all of whom contribute to the well-being of all residents. If you’re a borrower who has experienced difficulties in applying for a home mortgage, here’s what you need to know about this innovative program. 

Fannie Mae HomeReady Facts for Borrowers: There are a few key features of the HomeReady mortgage program that will appeal to borrowers.

  • Low Down Payment: Borrowers can obtain financing for up to 97% and there are flexible options for qualifying applicants.
  • Flexible Down Payment Source Options: An array of resources can be used for down payment and closing costs, with no minimum contribution requirement from the borrower’s own assets.
  • Educational Programs: Borrowers can learn from educational opportunities to help them understand the implications of home buying and ownership. These programs are required under the HomeReady program.

(more…)

Read More »

Tips for First Time Homebuyers

loving couple looking at their home

It’s exciting to go house shopping; learning about the loan application, pre-approval and mortgage process isn’t quite as interesting. Still, educating yourself is an essential part of getting financing for your new home. Owning a home is one of the biggest financial investments you’ll make during your lifetime, so you might be feeling a little overwhelmed by the process. Check out a few tips for first time homebuyers that will make things easier once you do find the perfect property.

Run your credit report. Even if you regularly monitor your credit rating, you should run a report in the months before you decide to start house hunting. You want to have time to correct any errors or repair negative items well before you approach lenders for a mortgage. In addition, you should review your credit report to get an understanding of your credit rating. A score of 620 or more is probably enough to qualify for a mortgage, but you’ll get better interest rates the higher your rating. (more…)

Read More »

Mortgage Loans for Investment Properties

Purchasing an investment property can be a smart financial move for homeowners approaching retirement or anyone wanting to supplement their income. But acquiring a home for investment purposes isn’t the same as buying your primary residence: What you know from experience with mortgages is helpful, but there are additional factors when it comes to investment properties. Check out these tips before you start shopping.

Save up for the down payment. You can’t obtain private or lender-paid mortgage insurance for investment property purchases, so you’ll need at least 20% of the purchase price as a down payment. Plus, with an investment property mortgage, it’s also a good idea to save up a respectable sum of money for purposes of interest rates. If you can manage to put down at least 25%, you could qualify for lower rates to reduce your monthly payment. (more…)

Read More »

Pay off Mortgage or Invest?

It feels good to be in a financial position where you’re trying to decide whether to pay off your mortgage or invest in other assets, such as real estate. Either option can advance your financial stability and impact your future, but paying off your home loan may be more suitable in some cases; likewise, investment might be better for others. It’s important to weigh a few factors to determine which arrangement is best for your situation.

Tax Benefits: Your mortgage payments are tax deductible, so you’ll lose this benefit if you pay off your mortgage early. If you have a higher income and are able to itemize several other deductions, the impact of removing the tax benefit can be significant. Other homeowners falling into a lower tax bracket might consider investing their savings into real estate or other assets rather than a mortgage payoff, as the tax savings are likely negligible or even zero. (more…)

Read More »

Why You Should Buy Your New Home Instead of Renting

Why You Should Buy Your New Home Instead of Rent

Why You Should Buy Your New Home Instead of RentWhether you’re considering relocating across town or across the country, you’ll be making one major decision about your living arrangements: buying a new home or renting. Signing a lease is certainly convenient in that there are fewer worries about maintenance or repairs. You simply contact your landlord, and he or she will solve problems according to the lease. But convenience isn’t the only factor, as you’ll see when you look at the many reasons buying is a better option for most people.

You’re making an investment that increases in value. Real estate has an excellent return on investment as compared to other assets, even if you do nothing to the place. But there’s more incentive to improve upon it when that property is the house you live in – and when you renovate, you add value. Typically, you’ll gain more than what you put into home improvements and you’ll reap the rewards when you sell.  (more…)

Read More »

How a Good Realtor can Make or Break the Home Buying Process

Even after you’ve made the big decision to buy a home, there are still other choices you’ll have to make as you’re looking for the perfect place. One of the first tasks you’ll need to accomplish is finding the right realtor to assist you in your house hunting efforts. There are countless real estate professionals out there, but you must separate the good from the bad to make the home buying process run smoothly. Here’s why a qualified realtor is important and some pointers on what to look for.

A Good Realtor is Critical for Several Reasons  (more…)

Read More »

How to Make Buying Your First Home as Simple as Possible

Buying your first home is a huge milestone, and an incredible feeling once it’s completed. During the process, though, it can be kind of daunting. As an FTHB, how can you make things as simple and painless as possible? Here are a few tips.

Check Your Credit. When you apply for a home loan, the bank will run a credit check to see what your financial situation is, and how likely you are to make your mortgage payments on time. So that there are no surprises, do your own credit check first. There are a number of sites that offer a free credit report that you can look over. If it turns out your credit score is too low for a regular loan, you might consider applying for an FHA loan, which caters to those with lower credit scores and allows for a much lower down payment. (more…)

Read More »
Copyright © 2003-2017 Paramount Equity® Blog. All rights reserved.
"Paramount Equity®", "Paramount Equity Mortgage®" and "Savings Made Simple" are trademarks of Paramount Equity Mortgage®, LLC.
   

Paramount Equity Mortgage®, LLC is licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License #4170047; Arizona Mortgage Banker License #0922160, NMLS# 30336; regulated by the Colorado Division of Real Estate NMLS# 30336; Connecticut - Connecticut Mortgage Lender License # ML-30336; D.C. - Mortgage Lender License #MLB30336; Florida Mortgage Lender Servicer License # MLD 898; Kansas - Kansas licensed mortgage company License # MC.0025206; Maryland - Mortgage Lender License # 21172; Nevada Mortgage Banker License #3919; Licensed by the N.J department of Banking and Insurance NMLS#30336; Oregon Mortgage Lender License #ML-3256; Texas – Paramount Equity Mortgage®, LLC NMLS #30336; Utah DRE Mortgage Entity License #6967176; Washington Consumer Loan Company License #CL-30336; and Wisconsin – Wisconsin Mortgage Banker License #30336BA; NMLS ID #30336.