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Digital Showings

by Morris Pyle Team

Ask any real estate professional if they have sold a house without the buyer having physically seen it and they’ll most likely tell you they have. While it may have been an unconventional sale, it is more prevalent today than it was twenty or even ten years ago. iStock_000060465576_Small.jpg

The digital world of the Internet has changed the process of buying a home. It is evolving as people have become more comfortable with the reliability of the information available. 

Getting in a car and driving around all day looking at homes that may or may not fit your needs or wants is not productive for buyers or the agents.

The quality and the quantity of pictures has dramatically improved in the last twenty years. Buyers and agents alike can view a property online and get a fairly accurate idea of the condition and layout of home and whether it warrants a physical visit. Videos can “walk” you through the house to be able to assess if the floorplan will work for you.

The 2015 Profile of Home Buyers and Sellers reports 89% of all buyers cited an online website as an information source with real estate agents being a close second at 87%. 42% of all buyers looked online for properties for sale as the first step taken during the home buying process.

Interestingly, 87% of buyers in 2015 purchased their home through a real estate agent or broker compared to only 68% in 2001. The agent services deemed most valuable to buyers were help finding the right home to purchase (53%) and help to negotiate the terms of sale (12%) and the price (11%). 

A challenge for sellers is to understand that the digital showings are a critical part of today’s process. They save time and money for both buyers and sellers and are convenient because they can be done at any time of day and from anywhere. The difficulty is the seller’s feelings of inactivity when they believe their home is being shown frequently. 

Agents can share statistics that show a variety of digital activity like number of unique visitors, length of time spent on the listing site as well as the other features that were accessed. 65% of all buyers walked through the home they purchased after they viewed it online.

Bremer Bank Mortgage Lending Guidelines

by Morris Pyle Team

Check out this story on CNNMoney: 3% loan

by Morris Pyle Team

If you're looking to buy a home but don't have the 20% down payment sitting around, Bank of America is now offering mortgages with as little as 3% down.

Click on the link above for the full item.

 

 

Pay Yourself First

by Morris Pyle Team

The principle to pay yourself first has been referred to as the Golden Rule of Personal Finance.

The concept is that one of the first checks you write each month is for your own savings. The rationale is that if there is no money left after a person pays their bills, there is nothing to contribute to savings or investments that month. pay yourself first - check -300.png

By establishing a priority to save, a person realizes that the balance of their monthly income must cover living expenses and other discretionary spending. This is a much different strategy than saving what is left over from monthly expenses and other spending.

Many financial experts have likened an amortizing mortgage to a forced savings account because a portion of each payment is applied to the reduction of the principal amount owed. Some homeowners have taken that concept further with a shorter term mortgage to build equity faster.

In the example below, a $250,000 mortgage at 4% interest is compared with two different terms. The 30 year mortgage would have payments of $1,193.54 each month with the first payment having $360.20 being applied to the principal. Each payment would have an increasingly larger amount applied to the principal.

The 15 year mortgage would have payments of $1,849.22 each month with the first payment having $1,015.89 being applied to the principal. The $665.68 difference in payments goes toward reducing the loan amount and acts like a forced savings.

A homeowner might opt for the longer term and intend to put the difference in the two payments in a bank savings account each month or make an additional principal contribution to pay the mortgage down. However, as any person responsible for paying household bills knows, there will always be something that comes up that could hijack your intentions.

By committing to the shorter term mortgage, a borrower is committing to make the higher payment each month and the benefit is that it will reduce your principal balance faster.

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Bookmark this site to find an owner?s manual when you?ve lost yours.

by Morris Pyle Team
FargoHomeCenter.com's photo.

Homeowner Advisory

by Morris Pyle Team

Similar to an annual wellness physical, homeowners should consider an annual review of the financial elements of their home. It’s particularly valuable based on the fact that their home and its equity is generally, one of their largest assets.

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  • List of similar properties recently sold and currently available
  • Information on challenging property tax assessment
  • Refinance Analysis to:
    • lower your rate
    • shorten the term
    • make improvements
    • eliminate mortgage insurance
    • remove a person from the loan
    • eliminate credit card debt
    • combine loans
    • take cash out of the equity
  • Equity Accelerator to retire the mortgage within a specific period of time
  • Repairmen and contractors recommendations
  • Information on rental property opportunities
We’d be happy to provide this information at no obligation as part of our on-going commitment to providing homeowner information, both in general and specifically, to our contacts. It is part of a long-term strategy whereby we hope to earn your loyalty and referrals when you do need our services to buy or sell.
 
Mortgage shopping can be an overwhelming experience for first-time homebuyers, and is not a walk in the park even for the experienced buyer.
WWW.FOXBUSINESS.COM
 
 

Early Burnout Could be Good

by Morris Pyle Team

Early Burnout Could be Good - 1/4/2016 
 

Most of us understand the expression "burning the candle at both ends" to mean working so hard that you burn yourself out. Normally, that wouldn’t be a good idea unless it is intentional.

If the candle is your mortgage and the strategy is to get it paid off early, being “burned out” would be a good thing. One end of the candle would be your regular mortgage payments and the other end would represent additional principal contributions.candle-250.jpg

Since the Great Recession, lenders have been reporting a higher than normal number of borrowers getting shorter term mortgages not only when they purchase the home originally but when they refinance them also. It seems like the mindset of America’s homeowner has shifted a little from the belief that they will always have a house payment.

The extra $100, $200 or $500 in your checking account isn’t earning interest. Additional principal contributions with your regular payments on a fixed rate mortgage will save interest, build equity and shorten the term of the mortgage. 

Wealth management is about making financially wise choices. If having your home paid for by retirement age is one of your goals, making extra contributions regularly could get you there. Use this Equity Accelerator to see how it will affect your loan.

It's a Big Difference

by Morris Pyle Team

It's a Big Difference - 2/8/2016
 

Let’s say that you just won $8,750 on a lottery scratch-off ticket. You’ve decided to be frugal and invest the money and have decided on three alternatives: buying a certificate of deposit, a mutual fund or use the money as a down payment for a $250,000 home.

To compare the three alternatives, let’s look at the equity in each one three years from now.Your best investment graphic.png

The certificate of deposit can be invested at 1.3% in today’s market and you believe you can reasonably earn 5% on a mutual fund. You expect the home to appreciate at three percent a year.

The certificate of deposit would be worth $9,096 at the end of three years and the mutual fund would be worth $10,129. However, the equity in the home at the end of three years would be $45,204. That is a four time’s higher yield on the home.

One of the main reasons for the big difference is that the buyer benefits from leverage: the use of borrowed funds to increase the results. The $8,750 down payment is controlling a $250,000 investment. The appreciation is determined by the price and not merely by the cash invested. Another factor is that the loan balance is smaller at the end of five years than originally borrowed due to amortization.

There are certainly other factors to consider such as maintenance and other expenses but when the financial benefits are as strong as they are, it certainly deserves a much closer investigation. One of the first things to consider is whether the borrower can qualify for a mortgage and the only satisfactory way to be certain is to get pre-approved by a trusted mortgage professional.

Use the Your Best Investment calculator to make your own projections.

Have you ever wondered how long do I really need to keep these records?

 
FargoHomeCenter.com's photo.

Displaying blog entries 1-10 of 11

Contact Information

Photo of Morris Pyle Team Real Estate
Morris Pyle Team
RE/MAX Legacy Realty
4342 15th Ave. S., Suite 105
Fargo ND 58103
701-238-1652
701-281-0449