Does moving up make sense?
Real Estate ForumBy JOYCE NENNINGERQuestion: Joyce, how do I determine if this is a good time to sell my home and buy something a little newer and nicer?Answer: Take a look at the following questions. Your answers to these questions will help you decide:1. How much equity do you have in your home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of paying a mortgage, but if you’ve owned your home for a number of years, you may have significant gains.2. Has your income increased enough to cover the extra mortgage costs and the costs to move?
3. Is the neighborhood still a good one for your needs? For example, if you’ve had children, the quality of the schools may be more of a concern now than when you first purchased.4. Can you add on or remodel? If not, your options may be limited. Also, do you want to undertake the headaches of remodeling yourself?5. How is the home market? If it’s good, you may get top dollar for your home.6. How are interest rates? A low rate not only helps you buy more home, but also makes it easier to find a buyer.Question: What is happening with interest rates? Answer: As of the end of June, rates on 30-year mortgages dipped to 5.57 percent from 5.63 percent, according to Freddie Mac.
The decline took rates down to the second-lowest level of 2005 and represented the 10th decline within the last 12 weeks. Mortgage rates continue to fall at a time when the Federal Reserve has been increasing short-term interest rates; and the result has been an enormous boost to residential construction and sales, which have reached record levels for both new and existing homes.”Given that mortgage rates aren’t expected to move too much in either direction any time soon, we fully expect the housing market will continue to thrive well into the foreseeable future,” says Frank Nothaft, chief economist for Freddie Mac.Question: Joyce, what exactly is an appraisal? Are they pretty exact?Answer: An appraisal is an objective opinion of value, but it’s not an exact science, so appraisals may differ.For buying and selling purposes, appraisals are usually based on market value – what the property could probably be sold for. Other types of value include insurance value, replacement value and assessed value for property tax purposes.Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value. Appraised value doesn’t consider special considerations, like the need to sell rapidly.
Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer. Question: Joyce, I can’t qualify for a loan that would put me into the type of home I want. What are my options?Answer: House-hunters who find the home of their dreams is financially out of reach have several options. They can choose a property in a lower price range; opt for adjustable-rate financing, to more easily qualify for a mortgage; or simply put off buying until they can afford the house they want.Those who choose a less expensive home should make sure it will meet their needs for at least the next four to five years, especially when considering how costly it is to move. They should plan to stay put for more than a year or two; otherwise, they might not have enough money to trade up to a better home in the future, if the neighborhood they buy into is stable or depreciating.Call JOYCE NENNINGER at (970) 468-6800 or (800) 262-8442 for answers to your real estate questions. Or e-mail Joyce@SummitRealEstate.com or you can visit her website at http://www.SummitRealEstate.com. She has lived in Summit County for more than 20 years. Joyce is the broker/owner of Summit Real Estate – The Nenninger Team at the Dillon Ridge Marketplace. Her longtime residency and years of real estate experience can help you make the most of any buying or selling situation. She is a Certified Residential Specialist, the highest designation awarded to a Realtor in the residential sales field. She ranks in the top 4 percent of Realtors nationally.
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