
Renting out your house… Are you insured for that?

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Opening Gateways To Opportunity
There are many benefits to homeownership, but one of the top benefits is protecting yourself from rising rents by locking in your housing cost for the life of your mortgage.
The first house I bought was a little Spanish bungalow on Clinton Street in West Hollywood, right behind the Improv. I was renting it, and I asked the owners if I could buy it, and they were really nice and let me work out a deal. And I fixed it up and later sold it. That was when I realized that if you make some improvements, you can make money.
Ellen DeGeneres
A recent article by Apartment List addressed rising rents by stating:
“Our national rent index is up 0.1 percent month-over-month, marking the sixth straight month of increasing rents. Year-over-year growth now stands at 1.2 percent.”
The article continues, explaining that:
“Rents increased month-over-month in 62 of the nation’s 100 largest cities, down significantly from the 85 cities that saw rents rise last month. That said, rents are still up year-over-year in most of the nation’s largest markets — 77 of the 100 largest cities have seen rents increase over the past twelve months.”
Additionally, Urban Land Magazine explained that,
“Currently, nearly half (47 percent) of renter households are cost burdened (i.e., paying more than 30 percent of income for housing), while 25 percent (totaling 11 million households) are severely cost burdened, paying over 50 percent of their total household income for rent.”
These households struggle to save for a rainy day and pay other bills, including groceries and healthcare.
The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
The updated numbers show that the range is an average of 2% less expensive in Honolulu (HI), all the way up to 48.9% less expensive in Detroit (MI), and 26.3% nationwide!
Perhaps you have already saved enough to buy your first home. A nationwide survey of about 1,166 renters found that 34% said they rent because they cannot afford to buy, 29% said they cannot afford to buy where they live, and nearly a quarter (24%) were saving to buy.
Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream homes. As we have reported before, in many areas of the country, a first-time homebuyer can save for a 3% down payment in less than two years. You may have already saved enough!
Don’t get caught in the trap that so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have one of our professionals help you determine if you are eligible for a mortgage today.
Call Your Friend In The Real Estate Business at 661.220.5506 and get going with GATELY!
Every year, the New York Federal Reserve publishes the results of their Survey of Consumer Expectations (SCE). Each survey covers a wide range of topics including inflation, labor market, household finance, credit access and housing.
One of the many questions asked in the housing section of the survey was:
Over three-quarters of respondents under the age of 50 said that they would prefer to own their home, rather than rent. While only 52.6% of those over 50 would prefer to own. The full breakdown can be found in the chart below.
When renters were asked what the average probability of owning a primary residence at some point in their future was, 66.4% of those under 50 believed that they would eventually own their home, while only 23% of those over 50 did.
Many had wondered if young Americans had lost their desire to own a home, but for those renting now, that dream is still alive. Call our office 661.220.5506 and get going with GATELY!
The American Dream of homeownership is alive and well. Recent reports show that the US homeownership rate has rebounded from recent lows and is headed in the right direction. The personal reasons to own differ for each buyer, but there are many basic similarities.
Today we want to talk about the top 5 financial reasons you should own your own home.
Before you sign another lease, perhaps you should contact a professional at GATELY properties to better understand all your options. 661.220.5506
You must have a good reason. Although, we’re not really sure what it is. With rents continuing to rise across the country, interest rates staying around historic levels, and new loans lowering down payment requirements, it just makes sense to take the leap to homeownership. Maybe you’ve got terrible credit and don’t want to take the time to improve it (or don’t know about loans that accept lower scores)? Or, maybe you just like giving your money away. If you’re still not on board, these 7 reasons might change your mind.
GOBankingRates‘ annual survey of “the cost of renting versus owning a home in all 50 states and the District of Columbia” just came out, and, while they “found that the number of places where it’s more expensive to own than rent has increased,” the number went from 9 to 11. That means that, in 39 states, it still makes more financial sense to buy.
We’re spoiled. Seriously. Anyone who has been paying attention to the market over the last few years and has seen interest rates with a 3 or 4 before that decimal point may just think it’ll always be that way. But history has a way of repeating itself, and while we may not see rates in the teens again anytime soon, most industry experts have been predicting rates moving into the 5s sometime this year, with a pattern of rising rates beyond. Buying a home while money is cheap is a smart move.
“A difference of even 1 percent can have a major impact on your total payments over time,” said ZACKS. “For instance, a $200,000 mortgage for 30 years at an interest rate of 5 percent would require a monthly payment of $1,073.64. By comparison, the same mortgage at 4 percent interest would result in a payment of $954.83.” That might not seem like a big deal every month, but, consider the long-term potential: “Over 30 years, the total difference between the two would be $42,771.60.”
Don’t have an 800 credit score? You don’t need to today. FHA requirements are lower than conventional loans, and you may already be where you need to be to qualify. “The average FICO score for buyers who finance FHA loans is 683, according to Ellie Mae. That’s considerably lower than the average score of 753 for conventional, non-FHA financing,” said Interest.com. “Most lenders have a…minimum of 600.”
Rising rents may or may not equate to rising property values in your area, but either way, you’re not going see any financial benefit from it. When you own your home and your equity rises, that equity is yours. And so is the choice of what to do with it. Whether you decide to let it sit and continue to grow or tap your equity for home improvement projects, the money is yours to decide how to use.
Does 20 percent down make it more likely that you’ll qualify for a loan? Sure. Does that mean you have to come up with that huge chunk of money? No. Nor do you have to come up with 10 percent down, which, for some reason, the majority of new buyers seem to believe. “87% of first-time buyers think they need 10% or more down to buy a home,” said The Mortgage Reports.
The FHA loan is one of the most popular loans available to first-time buyers because, not only can you qualify with a fair credit score, but the down payment is as low as 3.5 percent, and, “100 percent of the down payment can be a financial gift from a relative or approved non-profit,” they said. But, it’s not the only option for a low down payment. Fannie Mae’s Conventional 97 Mortgage and HomeReady Mortgage require just 3 percent down. The Mortgage Reports also has information on closing cost help and down payment assistance programs.
Unless you’re in a rent-controlled apartment (and, bless you if you are since there are so few left), your rent is just going to keep going up every year. Apartment List’s monthly National Apartment List Rent Report shows that, “Our national rent index is continuing to climb, with month-over-month growth of 0.5 percent for June. Rents grew at a rate of 0.5 percent between May and June, which is generally in line with the monthly growth that we’ve seen over the course of this year thus far. Year-over-year growth at the national level currently stands at 2.9 percent, surpassing the 2.6 percent rate from this time last year. In addition to the growth on the national level, rents are now increasing in nearly all of the nation’s biggest markets.”
When you own your home, your payment is your payment is your payment. Unless you take out a home equity loan or refinance to take cash out, your payment’s not going to go up.
Here’s another bit of fun for renters: nothing you pay comes back to you. I mean, except for that security deposit, but that all depends on what effect your dog and those few parties you threw had on the condition of the home. As a homeowner, you get to write off all kinds of stuff, which lowers your overall costs. “Your biggest tax break is reflected in the house payment you make each month since, for most homeowners, the bulk of that check goes toward interest. And all that interest is deductible,” said Bankrate. “Did you pay points to get a better rate on any of your various home loans? They offer a tax break, too. The other major deduction in connection with your home is property taxes.”
And think about it this way: Even if your house payment is going to be a little bit higher than what you’re currently paying in rent, it’s not an apples-to-apples comparison. How do those numbers look when you calculate the tax savings?
Still unsure about whether or not you should buy a house? It’s a big commitment, obviously, and not just from a financial standpoint.
But the rewards generally far outweigh any potential downsides for those who take the plunge. Need more convincing?
How about the fact that:
That money that comes out of your account every month? It’s going right into someone else’s account. Doesn’t that make you just a little bit mad?
To be clear, that someone else is making money off you
How about now, when you think about the fact that real estate continues to appreciate and you’re not getting to appreciate that appreciation. Aren’t you tired of watching someone else make money while you sit in the place they own and try to figure out how to get ahead?
Not being able to put a coat of paint on the walls or hang some wallpaper or enjoy the countertops, cabinets, or flooring you picked out because your landlord won’t let you make any changes is not cool. Sure, there are some temporary solutions to make your place look better, but nothing compares to having the freedom to do what you want, when you want, with your space.
In fact, you may be paying more in rent right now than you would be for a house payment. Paying a mortgage is cheaper than renting in 42 states, and sometimes it just depends on being more flexible on where you choose to live.
Were you under the impression that you had to come up with a huge stack of cash to buy a house? Federal Housing Administration (FHA) loans are among the most popular options for all homebuyers, and for first-timers, they make a lot of sense. First, because the credit requirements are less stringent than other loans – in many cases, you can have as low as a 620 score. Also, you can qualify with as low as 3.5 percent down. On a $250,000 house, that’s only $8,750.
FHA mortgages require a 3.5 percent down payment with the fewest ‘strings’ attached. This makes the FHA mortgage one of the most lenient mortgage types available nationwide. There are very few credit restrictions with the FHA loan and the agency allows your 3.5% down payment to comes as a gift from a family member, employer, charitable organization or government home-buyer program.
Yes, they’ve gone up a bit recently and are currently sitting a bit above four percent. But when you think about the fact that a decade ago they were over six percent and in the 1980s they were almost 18 percent, four percent looks a lot better, no?
Living in an apartment that doesn’t allow animals? That’s pretty common. Trying to find a rental with a generous pet policy is near impossible. If you do find one, you can usually expect to pay a hefty pet deposit and monthly pet rent.
Yeah, it stinks to have to be saddled with that debt just because you decided you should expand your education, get a degree, and make yourself more hirable, but just because it’s a reality doesn’t mean you can’t improve your standing.
If you have student debt, mortgage investor Fannie Mae’s new rule changes should make it easier for you to purchase a first home.
Are your millennial friends starting to buy houses? They’re part of a sweeping national trend. “Get ready to see more first-time home buyer clients. In the first quarter of 2017, the number of new-owner households was double the number of new-renter households,” said the National Association of Realtors (NAR) in the most recent edition of their Realtor magazine.
There were about 854,000 “new-owner households” during the first three months of this year, which is more than double the 365,000 “new-renter households in that period, according to U.S. Census Bureau data. What’s more, it’s the first time in a decade that new buyers outpaced new renters.”
First-time buyers also account for 42 percent of homebuyers this year, up dramatically from 31 percent in 2011, which was the lowest point recorded by Fannie Mae.
Specializing in residential resale and new construction of North Los Angeles County (Antelope Valley, Santa Clarita Valley, and San Fernando Valley). GATELY Properties is dedicated to helping you make the best financial and lifestyle choice for your situation. If it is cashing out, upgrading, downgrading, or even relocating we're here to help. Gately Properties was founded on the premise of building a Boutique Real Estate Office that focused on the client and community. Gately Properties helps strengthen the community where they we work and practice real estate because by combining real estate professionals and local neighborhood experience with up-to-the-minute real estate resources we deliver the results home buyers and sellers need today.