Justin BonuraDivision Manager - New Jersey And New York Mortgage Officer NMLS#: 73184
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Whether your family is welcoming new additions making for a larger household or your current living space doesn’t have the room you desire to entertain others and fit everything you need, buying a larger home is a process and making the decision to upsize takes a lot of factors into consideration. Current homeowners looking to purchase a larger home can do so by utilizing their home equity. What is home equity? How can you increase it? Check out these answers to some common questions to determine if purchasing a larger home is right for you and your family. What is home equity? Simply put, home equity is a homeowner’s financial interest in a home that can increase over time. Home equity typically starts when a mortgage is made out on a home and homeowners begin to make monthly payments. For example, if a home is $200,000 dollars and the owners purchased it at full value with a 20 percent down payment and a loan from the bank for the remaining amount, they have 20 percent of the purchase price or $40,000 that they own. Depending on the worth of the house as well as the down payment, home equity can be used towards the purchase of another home. In a 2019 Q3 U.S. Home Equity and Underwater Report conducted by ATTOM Data Solutions, 14.4 million residential properties in the United States were considered equity rich, meaning that the combined estimated amount of loans secured by those properties was 50% or less of their estimated market value. In other terms, these homeowners have at least 50% equity can use it towards the purchase of a new home. How can you increase your home equity for a larger home purchase? Over time, ...
The past decade has proven to be incredibly dynamic when it comes to the housing market. Ten years ago, the United States was still battling the effects of the Great Recession where real estate arguably suffered the most. It took until the middle of the decade for the greatest buyer’s market in history to turn into the greatest seller’s market. We’ve gone from having too many homes to sell to not having enough. Buying a home has remained a vital part of the American Dream and it’s important to come prepared to the start of a new decade. Come Prepared with Pre Approval Loans and a Credit Score to Match With inventory of homes for sale facing a major shortage across the nation, getting a preapproval for a home loan is more important than ever. Shopping for homes before gaining a preapproval letter is a common mistake. Pitfalls with student loans, significant recent cash deposits, and the manner in which self-employed income is reported can cause serious delays when it comes to getting a mortgage. A credit score of 620 or above is typically the minimum score required to buy a house. Don’t Be Tempted to Overbuy Consider three times your income as a starting point when considering debt-to-income ratios . Don’t be enticed by beautiful photos and luxurious amenities. Get preapproval for your mortgage so you can move quickly when you do find the right house. Preparing to Make a Down Payment Many people think that they need 20% down. However, 6% was the median down payment for first-time home buyers in 2019. For repeat buyers, the average was closer to 16%. Understand the ...
Whether you’re a recent college graduate or have spent some years working and saving, making your first home purchase may have crossed your mind. Thoughts about the current real estate market, the affordability of a home, and the timing of being a first-time buyer may have quickly followed as well. However, buying a home is more attainable than you think and can be a valuable tool in building your net worth and overall wealth. The Earlier The Better The earlier you start, the earlier you save. EMIs (equated monthly installments) are lower when you opt for a longer tenure of loan. By opting for a longer loan early on, you’ll be able to take advantage of low monthly payments when you need them and eventually repay the loan or increase the EMI amount as you become more financially stable in later years. Studies have shown that those that purchased their first home in their twenties had an average of $10,000 left on their mortgage at age 60. Those that waited until their thirties averaged around $50,000 but typically purchased more expensive homes. Tax Breaks When you take out a loan to purchase a property, you will be eligible for a tax deduction against the interest paid on the loan. If you itemize on your income taxes, you can deduct all or a portion of your mortgage interest and property taxes. You’re also eligible for a big exclusion in place to help reduce your capital gains tax when you’re ready to sell. Investment Potential If you buy property in a developing area, chances are that the property will yield a high return within a few years. ...
The housing market in New Jersey saw a dynamic year in 2019. As temperatures dropped, inventory and offers increased. Thanks to the high demand for starter homes, those looking to buy in the luxury market will find themselves at an advantage. Less competition coupled with notable increase in luxury homes spending can make upgrading your current home more attainable than ever. The Cost of Homes Will Remain Steady Existing homes have seen both a decline and rebound in sales in recent years. While the third quarter of 2019 saw declining mortgage rates, the pace for 2020 is projected to remain steady. The flattening of overall price growth projects a forecasted increase of 0.8% for 2020 . Mortgage Rates are Projected to Stay Below 4% Until there is a sustained increase in inflation, Central Bank will not be hiking up their rates. Currently, it’s projected that mortgage rates should stay below 4% but won't decrease much beyond that. Lower mortgage rates are proving to be a big factor in increased construction with builder confidence being reported at an all-time high since 1999. Increased Demand for Entry-Level Homes Can Lead to an Increase in Existing Luxury Inventory Those belonging to the Baby Boomer generation have played a major role in shaping the current housing market, as many of them are retiring and looking to downsize their current homes. While entry-level homes are in greater demand with a low level of inventory, many builders have shifted their focus to affordability rather than luxury. This trend will lead to a decrease in new construction in the luxury market. However, those currently inhabiting ...
There’s a common misconception that the real estate market in New Jersey slows to a complete stop in the wintertime. While it may feel counterintuitive, the colder months are actually a great time to sell your home! Less Competition Makes Your Home Seem More Desirable The vast majority of the country does not have enough homes for sale to satisfy the number of buyers in the market during the winter. Waiting until the spring can have you seeing more time spent on the market and potentially less money for your home. The Opportunity to Sell High and Buy Low If you want to buy a home in the spring, selling now gives you the chance to be a non-contingent buyer when you’re ready to make a purchase. While you may have to find some short-term accomodations, this sets you up as a competitive buyer because you won’t be saddled with a house sale contingency. Reduced inventory in the winter months often sees homes selling at higher prices. The market is often flooded with competition in the spring which gives buyers the leverage to negotiate on the price. Buyers Are More Serious in the Winter Months It is statistically shown that buyer demand remains strong throughout the winter in the vast majority of the country. Buyers that are ready, willing, and able to purchase are in the winter market. Many areas of the country will see buyers competing for the same home. Beyond that, mortgage rates tend to rise in the spring which gives buyers the incentive to act now. You’ll Capture the Relocating Buyer The first quarter of the new year is when employers are most likely to either ...