Blog :: 11-2015

Determining a Home's Value

We thought this article by Liston Steven had some great points that may not always be top of mind. 

Interested in buying a piece of real estate? Many real estate investors and first-time homeowners seem to focus on the style and functionality of their potential purchase, thinking that these aspects help to increase the property's value. They seem to have forgotten the popular adage, “location, location, location.”

The truth is, the physical structure depreciates as time goes on, it is the land that increase in value. This is very important to note because buying a home is a huge purchase, one of the biggest in most people's lives. If you don't look at your investment from all angles and understand everything that drives the value of your home, you can limit your opportunity to increase your wealth.

Land appreciates in value because, as the population grows, the demand for it grows and it's in limited supply. When you focus on the land underneath the structure, this can help you find more efficient investments that will give you the best return for your money.

It's not to say that the appearance of the home doesn't increase the value of the property, but it's impact is less that you may think. When you understand how location and future estimates of land value will influence property return you can then make better investment decisions.

Here are some considerations of the top things that determine a home's value to ponder before you purchase your next home:

  1. Smaller and/or less attractive home can provide you with more bang for your buck: This is because all homes in a neighborhood, no matter the size or aesthetics, appreciate by approximately the same amount every year
  2. Your location within your neighborhood will affect the value of your land: Because they get less traffic and the implied increase in safety for children, homes in cul-de-sacs are more in demand than others with more traffic.
  3. The average age of your neighbors can tell you how much your property will appreciate: For instance, neighborhoods with older homeowners are less in demand for home-buyers with children.
  4. Future prospects of development can change your property's value: You must be aware of both the present state of local amenities as well as the future prospects for governmental and commercial development in the area. Both of these factors will influence whether your land will appreciate or depreciate.

An effective real estate investor looks past the physical attributes and the style of prospective purchases and, instead, focuses on the land appreciation potential. So, in order to be successful, you must overlook the more beautiful homes for a great location that provides opportunities for improvement that will increase the value of the land.

Read the original article here.

Get a Better Mortgage Interest Rate

We came across this insightful article by Blanche Evans about shopping around for interest rates on a mortgage. We just had to share it.

People will clip coupons and drive across town to save a few cents at the gas pump, but few will shop around for the best interest rate on their mortgages. Most buyers tend to go with the first lender they talk with, perhaps out of fear of losing the house if they don't act quickly enough. Paying one-eighth of a point too much can add up to thousands of dollars over the life of the loan.

You're smarter than that. Know you have the right to shop lenders and negotiate mortgage interest rates and fees. Here's how to do it.

First, you need to decide on which loan program you're going to compare. You need to decide between a fixed, an adjustable rate mortgage (ARM) and a hybrid. A fixed rate is fixed throughout the life of the loan, so it costs a little more. An ARM has an interest rate that can vary throughout the life of the loan, which would be cheaper now, but might cost more down the road. A hybrid is an ARM that is fixed for a predetermined period, such as five years, then it morphs into an ARM.

With interest rates still near historical lows, most people select a fixed rate because it's safest and protects you better the longer you stay in your home. An ARM or a hybrid loan is best if you plan to move in five years or less, but most people stay in their homes as long as nine years or more.

Next, you need to select a loan term, which refers to its amortization period. The most common fixed-rate term is the 30-year fixed-rate mortgage. Lenders also offer fixed rate loans in five-year increments beginning with ten-year loans, so you can select a 15, 20, and 25-year fixed rate. The advantage to doing that is that you'll pay the loan off faster, but you should know that the loan will cost more monthly because you're paying down more interest and principal at a time, even with a lower interest rate.

How do you decide which loan is best? By what you can afford. If you want the best rates, conventional loan-to debt-ratios prevent you from having more than 41% of your gross income used toward debt payments and mortgage payments. The ceiling for mortgages is about 28% of your income, with the rest of your debt payments going toward a car payment, student loan, or revolving credit card charges. If you have low debt, or are buying a modest home compared to your means, it's a good idea to get a shorter term.

Once you select the proper loan as well as the term you can start shopping. Give the lenders you call the exact same facts -- what kind of loan you want, how long the loan term will be, how much you want to put down toward the purchase price, and your credit score. According to the new loan disclosure requirements, which went into effect in August 2015, you have to provide six pieces of information to qualify for an "application":

·       Your Name

·       Your Income

·       Your Social Security Number

·       The Property Address

·       The Contract Price of the Property

·       The Mortgage Loan Amount

The lenders have to return a good faith estimate of what your closing costs will be within three business days. Then you can compare and choose the loan with the most favorable costs to you.

Click here to read the original article.

Comments

  1. No comments. Be the first to comment.

We've Got Spirit!

 

If you're a fan of craft beverages, you'll be a fan of our neck of the woods. This year the National Brewers Association found that:

·       Vermont has more breweries per capita than any other state in the US

·       We produce 16.2 gallons of beer per year per every 21+ adult

·       We have 1 brewery per every 11,628 (21+) adults

And new breweries, distilleries, wineries, and cideries are popping up all the time.

Local brewers, vintners, distillers and cider-makers have put our area on the map. As of right now our area claims fame to:

·      The Alchemist Brewery, aka creator of the World's #1 beer: Heady Topper

·      Boyden Valley Winery & Spirits

·      Crop Bistro & Brewery

·      Prohibition Pig Brewery

·      Rock Art Brewery

·      Shed Restaurant & Brewery

·      Smuggler' Notch Distillery

·      Stone Corral Brewery

·      Stowe Cider

·      von Trapp Brewing

So yes, you could say we have spirit.

Comments

  1. No comments. Be the first to comment.