Mike 425-367-2537 or Sheli 425-293-4568 Office@mikeandsheli.com
Is Family Mortgage Debt Out of Control? | Homes for sale in Lake Stevens

Is Family Mortgage Debt Out of Control? | Homes for sale in Lake Stevens

 

 

Some homeowners have recently done a “cash out” refinance and have taken a portion of their increased equity from their house in Lake Stevens. Others have sold their homes and purchased more expensive homes with larger mortgages. At the same time, first-time buyers have become homeowners and now have mortgage payments for the first time.

These developments have caused concern that families might be reaching unsustainable levels of mortgage debt. Some are worried that we may be repeating a behavior that helped precipitate the housing crash ten years ago.

Today, we want to assure everyone that this is not the case. Here is a graph created from data released by the Federal Reserve Board which shows the Household Debt Service Ratio for mortgages as a percentage of disposable personal income. The ratio is the total quarterly required mortgage payments divided by total quarterly disposable personal income. In other words, the percentage of spendable income people are using to pay their mortgage.

Is Family Mortgage Debt Out of Control? | Simplifying The Market

Today’s ratio of 4.44% is nowhere near the ratio of 7.21% during the peak of the housing bubble and is instead at the lowest rate since 1980 (4.38%).

Bill McBride of Calculated Risk recently commented on the ratio:

“The Debt Service Ratio for mortgages is near the low for the last 38 years. This ratio increased rapidly during the housing bubble and continued to increase until 2007. With falling interest rates, and less mortgage debt, the mortgage ratio has declined significantly.”

Bottom Line

Many families paid a heavy price because of questionable practices that led to last decade’s housing crash. It seems the American people have learned a lesson and are not repeating that same behavior regarding their mortgage debt.

If you have any real questions or need help selling or buying a home, contact us.

Source.. KCM Mike Kellogg and Sheli Kellogg blog

Rising Prices Help You Build Your Family’s Wealth | Homes for sale in Lake Stevens

Rising Prices Help You Build Your Family’s Wealth | Homes for sale in Lake Stevens

 

There are homes for sale in Lake Stevens that will appreciate in the next few years. Over the next five years, rising home prices are expected to appreciate, on a national average, by 3.6% per year and to grow by 18.2% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

You can see the local Lake Stevens appreciation over the last three years here at our Lake Stevens community page.

So, what does this mean for homeowners and their equity position?

As an example, let’s assume a young couple purchased and closed on a $250,000 home this January. If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?

Rising Prices Help You Build Your Family’s Wealth | Simplifying The Market

Since the experts predict that home prices will increase by 5.0% in 2018, the young homeowners will have gained $12,500 in equity in just one year.

Over a five-year period, their equity will increase by over $48,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

Bottom Line

Not only is home ownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today! You can check out our buying guide here for more information.

Mike Kellogg and Sheli Kellogg are real estate brokers in Lake Stevens and Snohomish.

Source.. KCM Mike Kellogg and Sheli Kellogg blog

 

Getting Pre-Approved Should Always Be Your First Step | Homes for sale in Lake Stevens

Getting Pre-Approved Should Always Be Your First Step | Homes for sale in Lake Stevens

 

 

Homes for sale in Lake Stevens the number of buyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so.

Mike Kellogg and Sheli Kellogg are real estate brokers in Lake Stevens. Give us a call if you have any questions.

Source.. KCM Mike Kellogg and Sheli Kellogg blog.

Mortgage Interest Rates Have Begun to Level Off | Homes for Sale in Lake Stevens

Mortgage Interest Rates Have Begun to Level Off | Homes for Sale in Lake Stevens

 

Whether you are a buyer (see our buyers guide) searching for your first home, or a homeowner (see our selling guide) looking to move up to your next home, you should pay attention to where mortgage interest rates are heading.

Over the course of 2018, according to Freddie Mac’s Primary Mortgage Market Survey, rates have increased from 3.95% in the first week of January to 4.40% in the first week of April.

At first glance, the difference between these numbers in such a short amount of time could be concerning, but if we look at the graph below, we’ll see that rates have already started to level off and return to the mark set in February.

Mortgage Interest Rates Have Begun to Level Off | Simplifying The Market

This is great news for anyone looking to buy a home this spring! The spring is always one of the busiest seasons for home buying, and with rates increasing even more, buyers have come off the fence to lock in great rates! This is still great advice as the experts believe that rates will continue to rise throughout the year.

Every month, Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors release their projections for where they believe mortgage rates will be in the coming months. If we take the average of what each of the four organizations is predicting for the second quarter, rates are expected to rise to about 4.48% by June.

That average climbs to 4.73% by the end of this year.

So, what does this mean?

Waiting until the end of the year to buy, with rates still projected to increase, will end up costing you more money on your monthly mortgage payment. For every $250,000 you need to borrow to purchase your dream home, you will spend $49.21 more per month, $590.52 per year, and over $17,700 by the end of your 30-year mortgage.

And that’s just the impact of your interest rate going up!

Bottom Line

If you are ready and willing to purchase a home, find out if you’re able to. Let’s get together to evaluate your needs and help you with next steps!

Contact Mike Kellogg and Sheli Kellogg to see homes for sale in Lake Stevens.

Source.. KCM Mike Kellogg and Sheli Kellogg blog

What Is Private Mortgage Insurance (PMI)? | Homes for sale in Lake Stevens

What Is Private Mortgage Insurance (PMI)? | Homes for sale in Lake Stevens

 

When it comes to buying a home in Lake Stevens or Snohomish, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase homes with down payments below 20%, you can never have too much information about Private Mortgage Insurance (PMI).

What is PMI?

Freddie Mac defines PMI as:

“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.”

 As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

“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.” 

According to the National Association of Realtors, the average down payment for all buyers last year was 10%. For first-time buyers, that number dropped to 5%, while repeat buyers put down 14% (no doubt aided by the sale of their homes). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

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 (PMI)? | Simplifying The Market

The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

“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.”

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and help you make the best decision for you and your family. Mike Kellogg and Sheli Kellogg are real estate professionals in Lake Stevens and Snohomish.

Source.. KCM Mike Kellogg and Sheli Kellogg blog

Four Bedroom Home for Sale in Everett (Silver Lake area)

Four Bedroom Home for Sale in Everett (Silver Lake area)

 

 

Four bedroom home for sale in Everett (Silver Lake area).

Click Here to Check Out This Beautiful Home.

  • All new paint on the inside and outside.
  • New roof, only 3 years old.
  • Brazilian Teak 3/4 solid hardwood floors entire upstairs.
  • Wood burning fireplace with matching hardwood mantel and custom tile surround.
  • Recessed LED lights with dimmers and surround sound speakers in front room.
  • New interior 6-panel solid core doors and new trim.
  • LED lights throughout the house.
  • Kitchen: new oven and microwave, refrigerator is recessed in wall for built-in look, cabinets re-faced, doors are soft-closing, pull-out drawers, lazy susans, under cabinet lights, tile back splash, granite counter top with steel reinforcement around sink area, and bar seating.
  • Hallway has a coat closet and linen closet.
  • Main Bath: new skylight, heated tile floors, commercial grade occupancy fans, extra large sink cabinet, wall cabinet recessed into wall, tile tub surround, crown molding.
  • Master Bedroom: wired for surround sound, lighted closet with updated storage system.
  • Master Bath: heated tile floors, commercial grade occupancy fans, auto sensing under cabinet lighting, custom tile shower, beautiful vessel sink, custom cabinets, extra recessed mirrored cabinet with lights, crown molding.
  • Downstairs Bath and Utility Room: 3/4 bathroom with tile shower surround, marble counter top, pull-out drawers.
  • Downstairs: carpeted 4th bedroom, rec. room, family room and storage closet.
  • Garage has work bench and storage.
  • Updated electrical service of 200 amps.
  • Outside deck has new material and new hand rail.
  • Fully fenced back yard with access from the back.