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Is a 15-Year Mortgage Right For You?

by Rebecca Shahan

Are you planning to buy a home in Austin and want to pay it off faster and save money? If so, then a 15-year mortgage can be a great way to pay off your mortgage in half the time and save tons of money on interest. Just keep in mind that to really get the most from this type of mortgage, you need to have enough income to keep on top of the payments, along with all your regular expenses. This fact alone can deter home buyers to stay away from a 15-year mortgage, since the payments are about 50% higher than a similar 30-year mortgage.

As with any mortgage, there’s pros and cons.  What are the pros and cons of a 15-year mortgage?

Pros

  • Owning your home faster. Your home will be paid for in only 15 years.  Plus you’ll have peace of mind that it belongs to you after it’s paid off.
  • Builds equity. Paying off the principal faster helps you build more equity.
  • Save money. As there’s fewer years of risk in a 15-year loan, they have a lower interest rate. And since the term is shorter, you save even more money on interest.

Cons

  • Higher payments. The payments will be 50% higher than a 30-year loan, so you need to be sure you can keep up with them.
  • Locked up equity. The equity you’re building is locked up in the home. The only way to use it is to sell the home or refinancing.
  • Missing other opportunities. Higher payments means you may not have enough money to take advantage of other financial opportunities, such as investments or matching your employers contribution to a retirement account.
  • Lower quality home.  Since you aren’t stretching your payments over 30-years, you won’t qualify for as high of an amount as you would with a 30-year loan.

To sum up, a 15-year loan is an ideal way for those who can afford the higher payments to save money and own their home more quickly. But if you’re not entirely sure your finances are stable, then you should avoid a 15-year mortgage. 

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.  

First Time Buyers - Avoid These Common Mistakes

by Rebecca Shahan

Avoid these first time buyer mistakesAre you ready to buy your first home?  If so, this is an important time for you.  This is a big decision, so don’t get caught up in the emotions and make the same mistakes that so many first time buyers make. Let’s take a look at just a few of those mistakes and what can be done to avoid them.

Picking Out a House Before the Mortgage

Having enough money to buy your home is a step you would think most people would realize. But it turns out that many first time buyers get so excited that they start looking at houses before they secure financing. You can’t blame people for doing this, as looking at homes is definitely more fun shopping for a mortgage. But if you don’t know what you can afford beforehand, it can lead to disappointment if you can’t finance enough money to buy the home you want.

Make sure you talk with a lending professional to get pre-qualified or pre-approved for a loan before you start looking at any houses.  You’ll have a better idea of what you can afford. And it also gives you leverage, as the seller will be more confident that you’re serious.

Not Looking at First Time Buyer Programs

As a first time buyer, you may not have a lot of money saved up to put down on a home and cover closing costs. This may lead you to think that you have to wait until you save enough for a huge down payment.

However, there are programs such as Veterans Administration or U.S. Department of Agriculture loans that don’t require a down payment. You may also qualify for a Federal Housing Administration loan that only need a down payment of 3.5%. Even some conventional loans have down payments as low as 3%. You never know until you ask.

Applying For Credit Before Closing

The closing period is the worst time to apply for new credit, as some make the mistake of applying for credit cards so they can buy furniture and other items for their new home.  To be blunt, that is a huge error on their part. The lender will be looking at your credit during this period and will base their decision on your debt-to-income ratio.  Applying for credit can lower your score. About a week before closing they will also check your score.  So if they see any change in credit activity, it could change the interest rate or fees.

Pick out what you want to buy ahead of time, and then get any needed credit after the closing.

Not Having the Home Inspected

Not having a home inspected before you buy it is only asking for trouble. Homes, especially older ones, can have many issues that are hidden from immediate view. You need to be able to see the hidden issues. Some buyers feel that if they waive the inspection that it will give them an edge on other buyers.  But if you end up buying a home that needs major repairs, it ends up being a bad deal anyways. 

The simple solution is to hire a home inspector of your own choosing.  This way they won’t have any bias toward the home seller or your agent, and can give you an honest assessment.

Buying your first home can be a positive experience if you take the time and make wise decisions with the future in mind. Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.  

A Home WIth a View of Lake Travis - What Is It Worth to You?

by Rebecca Shahan

How much is a view of Lake Travis worth to you?The amazing views in the Lake Travis area are certainly what draws people to move here. But the real question is how much it’s worth to you to see those amazing views of the hills, water, or other scenic features from your front window? What you need to decide is how extra you’re willing to pay for a stunning view.

According to appraisers and analysts, there’s no simple answer. “Views are actually really difficult to quantify. It’s somewhat subjective,” according to Principal data scientist Andy Krause at Greenfield Advisors.  “What makes a better water view? Do you want it to be wider? Do you want more of the water from a taller angle? You know, some of that is in the eye of the beholder.”

And that’s a great thing to consider when it comes to living in a location like Lake Travis. What kind of view matters the most to you?

If a view is a must have for your next home in the Lake Travis area, here’s a couple of tips.

Is the view protected?

In Houston, a homeowner sued after a high-rise office tower was built across the street. Not only did the office block their view, but workers could see their back yard and pool. Were they protected from this intrusion? As it turns out, no. With some basic research, they would have seen that the area was zoned for such a building, and so the lawsuit was dismissed. How can you avoid this happening to you?  Make sure to check with planning authorities about zoning near your home and if there’s any large projects planned where your view is going to be.

Find a Great View with a Not As Great House

What if you find a house with a great view, but the windows are smaller and don’t show off the scenery? This may be a great opportunity, as you can pay less for the home and then spend money later for a remodel to add larger windows or perhaps a rooftop deck. Make sure you check the deed for restrictions as well as homeowner association rules, if any.

What could be better than a home with a spectacular view of the Lake Travis area? If you’re looking to buy a home in Lake Travis, whether it’s a view of the lake, or just a regular view, we can help you find the perfect home. You can also search for your dream home now using our convenient home search tool.

The Steps to a Succesful Home Inspection

by Rebecca Shahan

Steps to having a succesful home inspectionOf all the parts of the home selling and buying process, the home inspection is certainly one of the most important steps.  A home inspection is really important, as it will determine the condition of the home and could save you quite a great deal of money as a home buyer. And if you are selling a home in Austin, then it can give you time to make the needed repairs to get the most money you can from the sale. A home inspection will also give valuable insight into potential problems in the future.

What are some important things to consider when getting a home inspection?

  1. Research the Inspector

A costly mistake that people make is hiring the first inspector they find or is recommended. As with any service, it’s important to research who you hire, as it can make all the difference in the end. You need an inspector who will make sure you understand the issues and will be thorough.

Here are some important questions to ask a potential inspector:

  • How long have you been inspecting homes professionally?
  • How many home inspections have you performed in your career?
  • What are your qualifications, certifications and training?
  • What did you do for work before you were a home inspector? (Preferably, you want someone who was a contractor or builder.)

Also, is the inspector keeping current in their education? They need to be up to date so that you get the best and most current information possible.

  1. Be There During the Inspection

Being present during the inspection may seem excessive or not needed, but that’s not the case.  A good inspector will welcome your presence. And simply reading the report doesn’t always reveal all that needs repairing.  Seeing the issues in person and having the home inspector explain them will be far more helpful.  Even though an inspection may take a few hours, it will be well worth your time, as it could save you a great deal of money.

  1. Get a Presale Inspection

If you’re selling your home, you may think you can leave the inspection to the home buyer. Here’s the issue with that plan. If the buyer’s inspection reveals repairs that are needed to make the sale, you won’t have as much time to make the needed repairs. But if your home is inspected before you put it on the market, you’ll have more time to make needed repairs and will have more control over the costs.

A good home inspection is crucial to buying a home, so make sure you find the best inspector you can.

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.  

Has the 2018 Tax Reform Damaged the Real Estate Market?

by Rebecca Shahan

Recently some speculated that the 2018 tax changes would damage the housing market. Some headlines were reporting that there was a potential for double-digit price depreciation. These headlines even suggested that buyer demand could decrease rapidly. Some felt that the American dream of owning a home would slip away.

Now that we’ve come past the first quarter of 2018, we can look at the number and analyze the actual impact of the tax reform on the real estate market.

1. Has tax reform killed off home buyer demand?

If we look at the Showing Time Index which “tracks the average number of buyer showings on active residential properties on a monthly basis” and is a “highly reliable leading indicator of current and future demand trends,” we can see that buyer demand has actually risen each month over the last three months and is even higher than it was for the same months last year. We can clearly see from this that buyer demand is not going down, but up.

2. Have the tax changes affected America’s belief in real estate as a long-term investment?

Gallup released its annual survey two weeks ago that asked Americans which asset they thought was the best long-term investment. This is what the survey showed:

“More Americans name real estate over several other vehicles for growing wealth as the best long-term investment for the fifth year in a row. Just over a third cite real estate for this, while roughly a quarter name stocks or mutual funds.”

This survey also revealed that there has been no change in the past year of the percentage of Americans who believe real estate is a good investment.

3. Has the homeownership rate been negatively impacted by the tax changes?

In her latest “Z Report,” Ivy Zelman helps us to understand that the 2018 tax reform didn’t damage the homeownership rate. In fact it helped it.  She explains it this way:

“We have been of the opinion that homeownership is most highly correlated with income and the net effect of tax reform would be a positive, rather than negative catalyst for the homeownership rate. While still in the early innings of tax changes, this has proven to be the case.”

5. Will the reforms in the tax code cause home prices to tumble over the next twelve months?

According to CoreLogic’s latest Home Price Insights Report, home prices will appreciate in each of the 50 states over the next twelve months. Appreciation is projected to be anywhere from 1.9% to 10.3% with the national average being 4.7%.

As we’ve proceeded through the year, we can see that the dire predictions of the 2018 tax reform have not affected the real estate market adversely.

Check back on our blog each week for more real estate and local Lake Travis and Austin articles. If you're planning to buy a home in the Austin and Lake Travis area, please contact us today. You can also search for your dream home now using our convenient home search tool.

 

How to Move With Pets

by Rebecca Shahan

Moving in Austin With PetsIt’s time to move! But what about your pets? How can you be sure the move is a good one for them as well? Moving with pets is never easy, but it will be a worthwhile challenge. Your pets are used to the same environment and neighborhood, which gives them a sense of security. During a move, that environment changes and disrupts that security, especially since they don’t know why everything has suddenly changed. Needless to say, this can be a tough time for your beloved pets. But you can show them it will be OK and make the change more tolerable.  Here’s a few tips that can help.

Moving With Dogs & Cats

Prepare for the First Few Days

You can make sure your dogs and cats are more comfortable during the first few days by preparing an ‘overnight kit’ that has enough food, litter, toys and other needed items to help your bets feel at home.

Keep Them Out of the Action

Ideally, you should try to find friends or family that can watch your pets during a move, or a kennel.  After the hubbub of the move is over, then you can move them into the fully furnished home.  If you can’t do that, try to find them a quiet room in the new house to adjust to.  Make sure you also check on them regularly and try to stick with feeding and walking routines.

Keep Them Inside

Do not let your dogs or cats outside until you get to the new home. It’s easy for them to get lost in a new environment. Make sure they stay inside for a few days to let them have time to adjust.

Move the House Before You Move Your Pets

Move your pets into the new home after everything else is moved if at all possible.  Try to get as much set up as you can before moving your pets in. If you have an extra room or garage you can set up and keep clear, this will help them adjust.  Give them plenty of attention and toys to make them feel at home.

Update Their Info

After you move, visit a local pet store or vet to update their tag and chip info.

Moving With Fish

Moving fish can be tricky as they can be easily traumatized and can die easily from a move. Move them in plastic bags filled with their old tank water if you’re moving short distances.  But if you’re moving a long distance, it may be better to find your fish a new home rather than risk them dying.

Moving With Birds

You never know when a bird will just up and fly away, which happens quite a lot during moves.  The stress of your move can make them easy escape artists. So make sure you keep your bird caged during the move and even a few days after.

Moving is never easy, but if you prepare, you can make it easier for your furry family.

Are you planning to buy a home in the Austin area and have questions about moving ideas? Please contact us today for more information. You can also search for your dream home now using our convenient home search tool.

What is PMI?

by Rebecca Shahan

If you plan on buying a home in Austin and want to go with a low down payment loan, are you familiar with a type of insurance called Private Mortgage Insurance (PMI).  There are plenty of mortgage options that offer down payments under 20%.  But if you plan on getting one of these types of loans, it’s a good idea to look into and educate yourself about Private Mortgage Insurance. How can Private Mortgage Insurance help you buy a home in the Austin area?

Here’s how Freddie Mac defines PMI:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

The simple explanation is that the buyer pays the monthly premiums for the PMI insurance policy, and the lender is the beneficiary. As Freddie Mac explains:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.”

The average down payment last year for all home buyers across the nation was 10% and 5% for first time buyers, according to the National Association of Realtors (NAR). They also reported that the average down payment for repeat buyers was 14%. In other words, PMI didn’t stop these buyers from getting loans.

Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:


What is Private Mortgage Insurance

The larger the down payment, the lower your monthly housing cost will be, but as Freddie Mac says:

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Are you planning to buy a home in the Austin area and have questions about home loans and PMI? Please contact us today for more information. You can also search for your dream home now using our convenient home search tool.

Spring is a Great Time to Buy a Home in Lake Travis

by Rebecca Shahan

Reasons to buy a homenow in Austin and Lake travisAre you thinking about whether Spring is the right time to buy a new home in Lake Travis, Austin, or the surrounding areas? If so, here's some great reasons why now is a good time to buy a home instead of waiting.

Prices Will Continue to Rise

According to CoreLogic’s latest Home Price Index reports, home prices have continued to increase by 6.6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.3% over the next year.

The bottom in home prices in Austin has come to pass. Home values will continue to appreciate for years. Waiting to buy a home in Texas just doesn't make sense.

Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage hovered close to 4.0% in 2017. And according to experts, that rate will continue to rise. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors all agree that rates will increase by nearly a full percentage point by this time next year.

Higher mortgage rates means higher mortgage payments. You likely want to avoid that from happening.

Either Way, You Are Paying a Mortgage

Many renters are afraid to take on a mortgage. The thing to remember is that you are paying a mortgage when you rent, it's just someone else's.  

Having a mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. when you rent, it's your landlord is the person with that equity.

It’s Time to Move on with Your Life

There are two things that determine the cost of a home: the price of the home and the current mortgage rate. Both of those factors are rising. Would you still wait if they weren't?

Examine the real reasons you want to wait. Are you doing fine where you are living now?  Or do you need to have a better place for your children? Maybe safety is a concern.  Maybe now is the right time to buy.

Rebecca Shahan has been helping people buy their homes in Lake Travis and Austin for years. She can help you make the right choice in a home if you do decide it's time to move. Call today at 512-657-4467. Or search for a home online with our convenient home search tool.

11 Steps to Owning Your First Home

by Rebecca Shahan

Are you getting ready to buy your first home in Austin or Lake Travis?  If so, it’s certainly an exciting time for you. It’s easy to get lost in all the emotions and happenings. The trick is to not let yourself get swept away in the process.  But don’t worry, if you keep on track, you can successfully buy your first home in Austin and come out on top.  What are the steps involved, and how can you successfully complete them all so that you find the house of your dreams in Austin and the surrounding communities?

Here are the 11 steps that you need to follow.

  1. Do Your Homework
    Buying a home is without a doubt the biggest financial decision you’ll likely make in your life. You’ll need to consider factors such as price, housing type, neighborhood, school districts, and more. You can complete this worksheet to help you figure all these items out. Make sure to fill it out with everyone who’s involved in the process so that everyone has the same goals in mind.
  2. Start Shopping for Homes in Austin
    Now that you know what you're looking for, start looking for listings online.  Here's a great tool for finding the ideal home in Austin and surrounding communities.
  3. Find a Great Agent
    Rebecca Shahan is ready to help you find the perfect first home and help you through the process of finding the perfect home in Austin and Lake Travis.
  4. Choose a Lender
    Now it’s time to find the right mortgage lender. Your lender will be working closely with you throughout the process, so it’s important to find one that understands your goals and needs.
  5. Pick a Loan
    Your lender will work with you to determine the right mortgage to fit your financial needs.  You'll need to provide proof of income, employment, and other details.
  6. Look at Homes
    Here comes the fun part of the process! Rebecca Shahan can help you find homes in in Austin and the surrounding areas in Texas that fit your budget and the needs you determined in step 1.
  7. Make an Offer
    Now that you’ve located the home you want in Austin, then you make the offer.  Rebecca can help you decide how much you want to pay, along with contingencies that both parties can agree on.
  8. Negotiate, Negotiate, Negotiate
    This is where you work out the deal for your new home.  But watch out that you don’t get carried away by emotions because you want the house. Some sellers may just accept your offer, but some may make a counter-offer.  Your agent will work with you to decide what to do.
  9. Inspect the Home
    When an offer is accepted, then you'll sign a contract that will no doubt include a home inspection contingency.  At this point you'll hire a licensed home inspector to look for needed repairs. If major repairs are needed, then the seller will be asked to make those repairs.
  10. Appraisal
    Your lender needs to determine if the home is worth enough to cover the mortgage.
  11. Close the Deal
    You’re almost there! You just need to sign the final paperwork to finish the deal.  Now it’s time to get moved into your first home!

Rebecca Shahan has been helping people buy their first home in in Austin for years. She can help you through all of these steps to guide you to owning your first home in in Austin. Call her today at 512-657-4467.

Millenials - Take Advice From a Millionaire: Buy, Don't Rent

by Rebecca Shahan

Millenial Home BuyersAre you a millennial and currently renting a home? Why not take some solid advice from a self-made millionaire? David Bach is just such a person and has written nine consecutive New York Times best-selling books. For 31 weeks his book, “The Automatic Millionaire,” was on the New York Times bestseller list.  He is also one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, Washington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes. 

In a recent CNBC article, Bach says that: “The biggest mistake millennials are making is not buying their first home.” Then he said that, “If you want to build real financial security, real wealth for your lifetime, then you need to buy a home.”

Here's his reason why buying a home is so important:

“Homeowners are worth 40 times more than renters. Now, that first home doesn’t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but that’s how you get started.”

 “Don’t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).”

What will it cost to pay your mortgage in fifteen years?

“For fifteen years, you got to brownbag your lunch. Think about that! Brownbag your lunch literally for fifteen years. You can retire ten years sooner than your friends. You’ll have real wealth, because you bought a home – you’re not a renter. And you’ll be financially secure for life.”

When a well-respected millionaire gives you advice, it’s usually a good idea to follow it.  But this is hardly the first time that experts have given advice on the wisdom of buying a home. Many successful individuals have found that over time, buying a home is the most advisable course toward financial security.

As an additional note on David Bach’s experience, he has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. Not a bad resume!

If you are currently renting a home in Austin or Lake Travis and are looking to take this advise, give us a call at 512-657-4467 to see how this dream can become a reality.

Displaying blog entries 1-10 of 16