Rent To Own . . .Is It A Good Idea?

I often get calls and inquiries from hopeful buyers who want to look at "rent to own" options.  I get the feeling these buyers want to own a home so very badly, that they are willing to do anything to call a home there own and rent to own is usually the last resort.  While a rent to own can work out for both the buyer and seller, these are usually set up to protect the seller.  Here are 4 things you should know about rent to own homes.

1.  OPTION MONEY

Most buyers look at this route because of bad credit, and sellers know this.  The seller will usually require 3%-10% of the purchase price as "option money".  This money is held in an escrow account (with a neutral, third party) for the duration of the rental.  Once the rental term is up (usually 1-5 years), the money is used as the buyers down payment for the purchase.  If the buyer decides to not purchase the home, the seller keeps the money.  So what happens if you decide you don't like the house, or interest rates go up and you can't afford the house?  What happens if your job transfers you, or life changes and the homes doesn't work for your needs?  You lose the money!!  This is perhaps the biggest reason I caution buyers to carefully consider a rent to own.

2.  RENTAL MONEY

Along with the money the buyer puts in the escrow account, the buyer will also pay a monthly rental fee.  This money is not credited to the buyer in anyway, other than allowing the buyer to occupy the home for that month.

3.  IF SOMETHING BREAKS

Unlike a normal rental, most rent to own situations are set up in such a way that the buyer is responsible for all utilities, maintenance and repairs.  If something breaks, the buyers is fully responsible.  Although you are renting, you lose some of the best rental "perks".

4.  PURCHASE PRICE

One benefit of a rent to own can be (although not always true) the locked in purchase price.  Many times the purchase price is agreed upon at the beginning of the lease.  If the option to buy isn't due for 2-5 years, it is likely homes prices could go up, locking the buyer in to a great purchase price with instant equity.  On the flip side, if the market goes down, you could be stuck with a home that won't appraise (meaning you can't get a loan on it).

CONCLUSION

In my opinion, I would much rather see an anxious buyer practice some discipline and patience, work on their credit, save up some money and buy a house the traditional way!  It is almost always a safer bet for the buyer.  I know it is hard to be patient, but every buyer that I have walked with down this road, is much happier at the closing table when they wait.

If you are anxious, excited and ready to buy, but still have a long road ahead of you to pay off/down debt, fix credit, save some money, let's talk.  One of my favorite parts of this business is walking alongside those buyers and getting them to the buying point.  The reward for me is handing those buyers keys to their new home after months and often years of preparation!  Don't wait - get started NOW!!!  And let me know how I can help you a long they way!

Jessica Adams
REALTOR
Cannon and Company, Real Estate Services
801.518.1806 (call or txt)

It's Still the American Dream . . .

Anatomy of a Short Sale

Top Reasons For Improved Housing

I attended the  Utah Real Estate Forecast Breakfast last week and took away some great info that I wanted to share with you!  No doubt our economy (especially real estate) has been on a crazy roller coaster in the last decade - but 2015 is looking strong, with steady growth, which is both healthy and exciting!  And so I have come up with the top  reasons for improved housing in Salt Lake in 2015!!

10. National Economy is Better!

In fact we saw a 3.9% economic growth in the 4th quarter of 2014 compared to the 4th quarter of 2013.

9. Job Growth is High!

In the 4th quarter of 2014, 250,000 new jobs per month were created.  125,000 are needed to keep up with the demand of new job seekers entering the marketplace, so to have double that number for three consecutive months is amazing!!

8. Pent Up Demand

Many of those who had to short sale their home have worked on their credit, waited the required time and are ready to purchase again!

7. Increase in Price!

At first, an increase in home prices may not sound good, but in fact, during the recession many home owners couldn't sell their home because they were upside down.  An increase in prices over the last couple years has put people back in the positive, allowing them to look at making a move.  In fact, home prices are nearly back to the 2006 level.

6. Housing Affordability!

Before you start thinking the increase mentioned in #7 is a bad thing . . . 68% of the population can currently afford the median price of a home (which is currently $255,000).

5. Household Debt is Down!

In 2006 the average household debt was 30% higher than their annual income.  Currently the average household debt is equal to their annual income (this is still really high, in my "Dave Ramsey" loving opinion, but it is progress).

4. Household Income is Rising!

To be completely honest, it's not rising a lot, but it is rising, nonetheless.

3. Mortgage Credit Access!

Right after "the crash" in 2007/2008 lenders, who would have given a loan to any warm body in 2006, tightened up their regulations making it very difficult for some of the best borrowers to obtain a loan.  As time has passed, the requirements have loosened up some, making a mortgage easier to obtain.

2. Mortgage Rates Are Low!

I mean, really rates are still in the high 3's and low 4's.  They wont stay there forever, so, please take advantage of them NOW!

1. Consumer Confidence

Let's face it, the attitude of the people drives the economy more than almost anything.  Confident consumers = spending consumers.  Consumer confidence has definitely been boosted in the last couple of years and it shows in the real estate market. Rates are low, home prices are competitive  . . . Now is a great time for real estate!!

FHA Lowers Mortgage Insurance Premiums

Great news for FHA buyers!!!

The Federal Housing Administration (FHA), a government insurer of home loans, cut 50 basis points (0.50%) from the annual mortgage insurance premium for FHA backed loans with terms greater than 15 years. For most FHA loans this will reduce the annual premium from 1.35 percent of the loan balance to 0.85 percent for case numbers assigned on or after January 26, 2015.

This Mortgagee Letter includes a table which shows the current and new annual MIP rates by amortization term, base loan amount, and loan-to-value ratio.

For the typical FHA applicant, the reduction in premiums means a savings of about $80 on their monthly payment, according to CoreLogic's chief economist, Sam Khater.

Please call me with any questions or for more information.

Kimberly Hendry
Sr. Mortgage Loan Consultant
NMLS# 288635 6925 South Union Park Center, Suite 150
Cottonwood Heights, UT 84047
Office: 801-312-8080
Mobile: 801-688-0599
Fax: 801-734-8815

$15,000 Down Payment Assistance Program!!

Such Exciting News!!!  I am so happy to bring you information about an AMAZING program to help out both buyers and sellers in Salt lake City!!!  Salt Lake is the 31st city in the entire country to offer this program!!  And so without further ado . . .

NeighborhoodLIFT Program

For Buyers:
1.  $15,000 down payment assistance on a primary residence (grant is forgiven 20% per year for 5 years.  If you remain occupying the home for 5 years, the total amount is forgiven).

2.  260 grants are available on a first come, first serve basis.

3.  FHA, FHA 203k, Conventional and VA loans are all available in conjunction with the grant.

4.  Home must be your primary and only residence (you can currently own a home, but must sell it to buy using the grant).

5.  Home must be located in incorporated "Salt Lake City" (this does not include neighboring communities like West Jordan, South Salt Lake, Sandy etc.).  See map below for qualifying areas (seen in green).

6.  You must be pre approved with Wells Fargo (please contact me for loan officer info), schedule and attend their home buyer event (December 12 and 13 at the Salt Palace) and take an 8 hour home buying seminar (available online and live).

7.  Home must be under contract within 60 days of being approved for the funds.

This is an amazing opportunity for qualifying buyers to get in to a home with no money out of pocket!!!  If you have been thinking of buying, don't miss this opportunity!!!

For Sellers:

If you have a home located in the mapped out area (seen above), and have been thinking about selling your home in this area, buyers will be abundant in the next 60-75!!!  NOW IS THE TIME TO LIST!!!  Buyers qualified to purchase using this grant will be out in full force ready and able to buy!!!

AND . . . you can take advantage of this as a buyer too!!!  If you are thinking of selling and buying in this area, you too can get $15,000 for a down payment!

This is one of the best down payment programs I have seen in years!!  Please don't hesitate and DON'T WAIT!!!  Call or email me today for more info, if you think this might be a good opportunity for you (Hint: it is a GREAT opportunity for you)!!

Jessica Adams, Realtor
801.518.1806
jessica@thecannonteam.com

Interest Rates and Your Buying Power . . .

Is Your Home Ready for Fall?

Thanks Veritas Funding for this great reminder!  As cool weather sets in, don't forget to get your home ready!!  We have great relationships with many handymen and specialists if you need help, just let me know!!

Salt Lake County Numbers - 2nd Quarter 2014

Thanks to the Salt Lake Tribune for compiling numbers giving us an overview of prices in Salt Lake County for the 2nd quarter of 2014.  3rd quarter numbers have not been compiled yet, but I will post them once they are out!

For more specific information about the value of your home, please feel free to contact me, anytime!!

How Will You Know if You Never Try?

PROCEED WITH  . . . CAUTION . . . . DO NOT ENTER . . . WRONG WAY . . .

Numerous road blocks can keep buyers from reaching their real estate goals.

BUT THAT DOESN'T HAVE TO BE TRUE FOR YOU!!!

There are many options that can help you get in to a home!  I wan't to take a minute and work through 3 of the most common problems we hear from potential buyers.

1.  "I wont qualify"

I can't tell you how many times I have heard this, arranged for the buyer meet with a lender and they are shocked that they can actually qualify (sometimes for more than they would have guessed).  Don't let the unknown keep you from moving forward!

2. "I have bad credit"

While this can cause hiccups, it doesn't have to stop you from buying.  We have often helped buyers take a couple of months to make some credit adjustments and *presto* they qualify to buy.  Sometimes this process can take longer (depending on the credit issues we are dealing with).  No matter how long it takes, we are here to help you each step of the way!!  One of our greatest joys is seeing a buyer conquer a seemingly impossible task and buy a house!

3. "No down payment"

There are several loan programs available making it fairly easy to get in to a house with little or no down payment.  Both FHA and conventional products are available with $0 down!!  A traditional FHA loan requires only 3.5% down and traditional conventional programs require as little as 5% down.

No matter what your story is, with a little work, focused determination and time, your dream of owning a home can be very real!  The best thing you can do is GET STARTED TODAY!!  Give me a call and let's see what we can do to get headed down the right path.

To learn more about my desire to help people read my post here.

Jessica Adams
Realtor
Cannon and Company Real Estate Services
801.518.1806

Machu Picchu and Buying a Home . . .

One of my favorite books is "A Million Miles in a Thousand Years", in it, Donald Miller takes you on an eye opening journey that will challenge you to REALLY live your life story.  We are talking about a turn off the TV, get off Facebook, experiencing everything life has to offer kind of story.  Donald takes us on an excursion to see the famed city of Machu Picchu.  I did not know that there are several ways to get to this ancient place.  Many travelers will chose to take a bus, train or even fly in, but there are a rare few that choose to make the treacherous hike in to Machu Picchu.  This 4 day excursion is not to be taken lightly.  Drastic climbs in elevation, fluctuating weather and harsh terrain make this expedition anything but quick or easy.  Take a look at the hike itinerary, below . . .

As I have thought about Donald's account of his hike to, and experience in Machu Picchu as outlined in his book, I can't help but make a comparison to so many sweet families and individuals that I have had the opportunity to "hike" with on their journey to home ownership.  You see, for many, purchasing a is not an easy loan app, home search and signing of closing documents.  In fact, many stories look more like the picture above.  Past bankruptcies, divorce, medical issues, bad credit and simply the hard lessons of life can knock us to the ground, leaving us feeling helpless and hopeless to ever realizing the dream of home ownership.  I am hear to tell you some great news!!  No matter where you have been, what your past looks like, how many mistakes you have made - you too can own a home - if you so desire.  The trail to get there may be narrow, steep, long and scary, but with a team of caring experts guiding you through, you can make it!!

My favorite part of Donald's experience hiking in to Machu Picchu is a realization he had once he made it to the Sun Gate, to over look the beautiful ruins.  I thought of paraphrasing, but why?  He puts it, so perfectly!

"And it was like Carlos said, because you can take a bus to Machu Picchu; you can take a train and then a bus, you can hike a mile to the Sun  Gate.  But the people who took the bus didn't experience the city as we experienced the city.  The pain made the city more beautiful.  The story made us different characters than we would have been if we had skipped the story and showed up at the ending an easier way.
It wasn't only the pain of the trail that made you appreciate the city; it was the pain of the landscape, steep in the mountains of the Andes, spiraled towers of natural rock, cliffs dropping for a thousand feet to the river."


You see, the path to owning a home looks very different for every person brave enough to start down the trail.  In almost 12 years, I can tell you one thing for sure, the ones who conquer the "Inca Trail" of the real estate world swell with a sense of pride and accomplishment that is visible in their walk, heard in their voice and impossible to miss as their eyes beam at the closing table!  No doubt that in all of the stories I have been apart of, the most impacting and memorable are the ones are the ones who endured to the end, ensuring their goals and dreams were realized!  There is nothing more gratifying in my real estate world than handing keys to a buyer who fought through the mess, climbed to the top and finally . . . owns a home!!!

Whatever your trail looks like, please always feel free to contact me.  I take great joy in hiking the steep and rough terrain alongside you!

Jessica Adams, Realtor
Cannon and Comapny Real Estate Services
801.518.1806 (call or txt)

How Does Your Credit Score Affect Your Buying Power?

When you’re obtaining a loan to purchase a home, your credit score plays a huge role in your ability to buy.  This is common knowledge for most consumers but did you know how your credit score really affects your buying power?

Most loan programs require at least a 620 FICO score in order to qualify but the higher your score, the lower the rate.  The lower the rate, the more dollars-per-month you qualify for and the more dollars-per-month, the higher the purchase price.  In short, you get more “bang for your buck” with a higher FICO score.

With conventional loan programs, the interest rates offered are usually tiered for every 20 FICO points added to your score.  This means that the difference in an offered rate from a 620 score vs. a 740 score could save a home buyer hundreds of dollars per month OR, increase their buying power by thousands of dollars in regard to purchase price. 

Other ways in which your credit score can affect your buying power include how much you’ll be required to put down on the home and how much your mortgage insurance premium will be (don’t confuse mortgage insurance with homeowner’s insurance, they are two different policies but that’s an entirely separate post in itself).  On the lower end of the credit spectrum, your mortgage insurance premium could be significantly more than if your scores were higher.  This alone could save you hundreds of dollars per month and thousands of dollars over the life of your loan.

So we know credit matters but knowing how much it matters and having the tools to improve your credit is the key to locking in the lowest rate and mortgage insurance premium on your home mortgage.

Next time, we’ll talk about ways to improve your scores and in the meantime, if you’re curious to know how your credit will affect your ability to buy, give Kim a call!

Kim Hendry

Mortgage Loan Consultant

Veritas Funding

NMLS # 288635

CA-DBO 288635

Cell: 801-688-0599

Fax: 801-639-0910

Online Loan Application Click Here to Apply for a Loan with Kim

kimberly@vfund.com

Listing Your Home - A Step By Step guide

1.  Listing Presentation

At our listing presentation meeting, we will discuss what your goals are, the current market condition and value of your home and work out a strategy to accomplish your goals.  We will sign the all listing paperwork during our first or second meeting (depending on the plan we put in place).

2.  Implement Marketing Strategy

With years of experience in real estate marketing, your home will be showcased through the most effective means, possible.  Your home will be featured on dozens of websites, with professional photography, flyers, Facebook boosts and much, much more!

3.  Showing Process

I will call or text (per your preference) for showing appointments. After showings, I will follow up with the buyers agent to get feedback.  You will also receive weekly updates including market activity, feedback from showings and marketing efforts.

4.  Receive and Negotiate Contract

When we receive and offer we will negotiate the terms (price, closing date etc.) that work for you.  Once the contract is signed, it is legally binding.

5.  Contract to Closing

Once we are under contract, the buyer will begin getting all of their financing in place, complete their inspection and order an appraisal. Once all of these things are complete, we will move toward closing.

6. Closing

When the closing day arrives, we will meet with a title company who will have all the documents ready for you to sign.  Once all monies are transferred the deed is recorded in to the new buyers name and ownership is transferred.

If you are considering a move, please let me know how I can help. I would be happy to find out what your home is currently worth!

Jessica Adams, Realtor
Cannon and Company
801.518.1806

Committed to taking care of and 
educating clients and friends!

Buying a Home . . . A Step By Step Guide!

1.  Talk to a Lender: Get Pre-approved

A pre-approval letter from a reputable lender, can make all the difference when making an offer on a home!  Not only will the seller have confidence in your ability to buy their home, you will feel good knowing you are staying in a price range you are comfortable with.  

P.S. You can never do this step too early!  Even if you are months away from buying a home, having a strategic plan in place insures a smoother, more enjoyable transaction!

2. Buyer Consultation: Meet Your Realtor

To ensure the best experience, it is important to meet with your Realtor to understand each other's objectives and expectations.  In this meeting we will establish clear goals and a timeline based on your needs.

3. Select Properties to Tour

During our meeting, we will discuss the features you are looking for in your new home and set up a daily search that will you informed of both new listings and changes to current listings that meet your criteria.

4. Tour Properties

Part of educating yourself on the market, is touring potential homes.  This is one of the funnest parts of the entire process. We will view homes allowing you to compare features and areas ~ until you find the right fit for you!

5.  Offer and Negotiation Process

Once you find the right home, we will negotiate the purchase terms with the seller.  Sales price, closing date, included/excluded items and closing costs are just some of the items we will negotiate.

6.  Under Contract and Closing Period

Now that we have successfully put a home under contract, the lender will begin processing the loan (they may ask you for new or updated documentation), the appraisal will be ordered and you will have the option to have a home inspection.

7.  Closing Process

When the wait is over, we will sign your loan documents with the title company.  Once all docs are signed, the monies will be transferred and the deed recorded into your name.  This process usually takes about 24 hours.  Once the deed is recorded you can take possession of your new home!

Welcome Home

It truly is an honor to walk beside you during the home buying process.  Please contact me today and let's get started making your dream of owning a home, a reality!

Jessica Adams

Realtor

Cannon and Company

801.518.1806

Committed to taking care of and educating clients and friends

What Drives Mortgage Rates?

Thanks to Kim Hendry for a great piece explaining interest rates!

The Importance of Pre-Approval

We know how it goes ….

You are anxious to get started on the hunt for a new house, right?  How exciting is this time in your life when you get to make dreams a reality and take that first step to becoming a homeowner?  That step of house hunting?  It is so much fun.

But wait, what if I told you that house hunting is not only not the first step; it’s not even the most important step in your journey toward home ownership?

That’s right.  Unless you plan to pay cash for your new home, the first thing you need to consider is, “how much can I afford?”  This is the big question and it’s not the same as “how much do I qualify for?” But both figures are figures that need to be narrowed down.  Knowing these important numbers is the most important and first step toward the home buying process.  Not having this knowledge is like going to the grocery store without your wallet.  It doesn’t help you make a purchase!

Before you start shopping for a home, take the time to sit down with a recommended professional who can guide you through the pre-approval process.   This professional should be able to clearly explain the loan process, ask the pertinent questions regarding your personal financial situation and assess your ability to purchase a home.  Together with your hired mortgage professional you should discuss loan options, loan costs as well as turn times and what to expect.  Your loan officer should be someone who is familiar with all of the loan programs that are available and know what the guidelines are for those programs.  They should be able to adequately explain to you how your current situation affects your ability to buy, how your credit effects the interest rates being offered to you and what options you have for paying closing costs.

Kim Hendry is a seasoned loan officer with the expertise and drive to make your home buying process a positive and stress-free process.  Kim would love the opportunity to compete for your business.  Even if you are only in the beginning stages and just have questions, Kim is always available to you.

Give her a call today and get started on becoming pre-approved!

Kim Hendry

Mortgage Loan Consultant

Veritas Funding

NMLS # 288635

CA-DBO 288635

Cell: 801-688-0599

Fax: 801-639-0910

Online Loan Application Click Here to Apply for a Loan with Kim

kimberly@vfund.com

Pricing Your Home . . . RIGHT!

Tips For First Time Home Buyers

Trusting the Loan Process

Today I want to introduce you to a great partner in the industry, a trusted friend and my favorite loan officer.  Kim Hendry and I have worked together for years and I confidently refer all my clients to her, because her number one goal is the same as mine "educating and taking care of people".  Kim will be a guest contributor to the blog on a regular basis.  Here is post from Kim's team . . .

Purchasing a new home is an exciting experience but not something to be taken lightly. At times, the process can become daunting and with large amounts of money on the line, emotions can run high. Having trust in the professionals you’ve hired, such as Jessica Adams and The Cannon Team, is the key to a successful transaction.

Kim Hendry would love the opportunity to earn your trust. 

Kim is a veteran to the mortgage industry. However, more importantly, Kim is a mother and a wife who enjoys nothing more than watching her three kids in the hockey rink and spending time with her handsome husband!

Kim has been originating mortgage loans for over 13 years and has worked through the most volatile markets in the industry while assisting hundreds of customers with the financing of their new and existing homes. Her industry knowledge is top notch and she is backed by one of Utah’s leading mortgage companies, Veritas Funding.

Veritas is one of the fastest growing companies in Utah for the past three years (as ranked by Utah Business Magazine), Top 100 Mortgage Companies in America in 2012 (as ranked by Mortgage Executive Magazine) and, Utah’s “Best of State” in Mortgage and Banking in 2013.

In addition to working for one of the most competitive lenders in the State, a team of qualified mortgage professionals with a combined 25 years of industry experience stands behind her to insure expedited turn times, thorough processing procedures,  as well as the friendliest faces in the business!

Let Kim work for you today and move in happy!

Kim Hendry

Kimberly@vfund.com

(801) 688-0599 (cell)

(801) 639-0294 (office)

Kim = NMLS# 288635

Veritas = NMLS# 252108

The Facts About For Sale By Owner