Down Payment Gift? Better Watch Out!

Many first-time home buyers receive down payment assistance from a family member or close friend, but they may not realize there are specific guidelines they must follow when they take money from others for a home purchase.

Buyers will need a gift letter from the person or persons who gave them the money. The person who gifted your buyer the money will need to state on paper that he or she does not plan on asking for the money back in return and that it is, indeed, a gift.

“The gift letter is very serious,” says Casey Fleming, mortgage adviser and author of “The Loan Guide: How to Get the Best Possible Mortgage.” “While it is doubtful that a lender would ever audit a file after the fact to see if the recipient is paying the donor back, if the transaction goes bad, you might very well find yourself with a subpoena in your hand.” Remember, you cannot lie on a mortgage application. It’s a felony.

Source: “Getting a Down Payment as a Gift? Avoid the Mistakes That Could Mess You Up,”® (Nov. 28, 2016)

Modern vs. Contemporary: Which Is It?

Make sure property descriptions are accurate. Luxury homes described as modern and those described as contemporary can vary in price by about $275,000, according to a® analysis of luxury homes. Defining these two styles has proven tricky and often get used interchangeably.

John Stewart, residential committee chair of the American Institute of Architects, describes a modern home and décor as having simple lines. He says modern homes tend to have a “stripped-down” aesthetic, often with cube-shaped structures, flat roofs, monochromatic color palettes, low-key furnishings, and those that often incorporate exposed steel and concrete.

On the other hand, contemporary homes often combine materials and bright colors, says Sheila Schmitz, editor of Houzz, a home design website. Contemporary homes may feature a black-and-white color palette, interiors baked in natural light, and floorplans that make the indoor-outdoor connection seamless.

Source: “Modern or Contemporary: What’s the Difference in Home Styles?” The Wall Street Journal (Nov. 10, 2016)

Home Loan Rates Move to Higher Averages

Fixed-rate mortgages headed up this week, reaching their highest averages since early summer.

Freddie Mac reports the following national averages for the week ending Nov. 3:

30-year fixed-rate mortgages: averaged 3.54 percent, with an average 0.5 point, rising from last week’s 3.47 percent average. Last year at this time, 30-year rates averaged 3.87 percent.
15-year fixed-rate mortgages: averaged 2.84 percent, with an average 0.5 point, rising from last week’s 2.78 percent average. A year ago, 15-year rates averaged 3.09 percent.

Source: Freddie Mac

When Home Additions Hurt and Help Resale

The 2016 Remodeling Impact Report: Outdoor Features analyzes 10 common outdoor remodeling projects and found which ones are likely to add the most value to a home at resale. The study by the National Association of REALTORS® and National Association of Landscape Professionals (NALP) looked at at the reasons why home owners complete outdoor remodeling projects, the value of taking on such projects, and the increased happiness experienced by home owners once a project is completed.

Read the story by REALTOR® Magazine here or download the full report for more information. For highlights from the report, you can also download this infographic.

Mortgage Rates Are Staying Low

Fixed-rate mortgages were mostly in a holding pattern this week, keeping borrowing costs low for home buyers and refinancers.

Freddie Mac reports the following national averages for the week ending Oct. 6:

30-year fixed-rate mortgages: averaged 3.42 percent, with an average 0.5 point, unchanged from last week. A year ago, 30-year rates averaged 3.76 percent.

15-year fixed-rate mortgages: averaged 2.72 percent, with an average 0.5 point, also unchanged from last week’s average. Last year at this time, 15-year rates averaged 2.99 percent.

Source: Freddie Mac

Study: Real Estate Cheapest in Fall, Winter

The market tends to slow in the fall and sales prices start to dip. Sales prices drop nearly 3 percent, on average from summer (June through August) to fall (September through November).

Home sale prices tend to be cheapest in the winter. In January or February, for example, homes could potentially cost 8.45 percent less on average than in June through August.

Be able to choose the best time to look for the best buy and now is a great time to start the process.

Source: “House Shopping After Summer Ends? Buying Later in the Year Could Save You Thousands,” NerdWallet (Sept. 20, 2016)

Federal Reserve on Interest Rate Hike: Not Yet

The Federal Reserve voted Wednesday to continue to leave short-term rates alone, but hinted that a raise is still likely before the end of the year.

Fed Chair Janet Yellen offered an upbeat report about a strengthening economy, while still acknowledging the sluggish first half of the year. Employment is increasing and household incomes are too, she said. While the case for raising rates has strengthened, Yellen said there was no need to raise rates quite yet because inflation remains below the Fed’s 2 percent target.

“We judged that the case for an increase had strengthened but decided for the time being to wait for continued progress toward our objectives,” Yellen said at a press conference following the Fed’s policy meeting.

Source: “Fed Stands Pat, But Says Case for Rate Increase Has Strengthened,” The Wall Street Journal (Sept. 22, 2016) and “Why Housing Doesn’t Care About the Fed,” CNBC (Sept. 21, 2016)

Home Loan Interest Rates Are Moving on Up

“This is the first week since June that mortgage rates were above 3.48 percent, snapping an 11-week trend,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending Sept. 15:

30-year fixed-rate mortgages: averaged 3.50 percent, with an average 0.5 point, rising from last week’s 3.44 percent average. Last year at this time, 15-year rates averaged 3.91 percent.

15-year fixed-rate mortgages: averaged 2.77 percent, with an average 0.5 point, rising from last week’s 2.76 percent average. A year ago, 15-year rates averaged 3.11 percent.

Source: Freddie Mac

July Marked a Big Month for Housing

The housing market heated up in July, with several factors favoring buyers this summer.

Jonathan Smoke,®’s chief economist, says this summer one of the best in a decade: we’re seeing the highest consumer confidence for a July since 2007, we’ve also had the highest nominal home prices for a July on record, and we’ve had the lowest July mortgage rates on record.

“The good news for would-be buyers who have struggled to find a home or have been outbid in prior attempts is that the balance of power shifts a bit more in your favor in late summer and fall,” Smoke writes in his column at®. “This is the time of the year when sales slow down, but inventory is at its peak. That means there are more homes for sale per buyer now, and yet mortgage rates remain close to their all-time lows. The window to enjoy the best summer in a decade for real estate remains open for the well-qualified and those ready to act.”

Source: “Finally, a July to Remember – and to Buy a Home,”® (Aug. 4, 2016)

Instagram Debuts ‘New Stories Feature’

Instagram is starting to look a lot more like its competitor Snapchat. The popular photo-sharing app just debuted its Instagram Stories feature, where users can post photos and videos.

Instagram’s Stories feature is already available in its own section on the photo-sharing app, giving users the ability to draw and add text over photos and combine multiple photos into a narrative story that can be seen by their followers for up to 24 hours before it disappears.

Stories also sets out to make sharing on the photo app a bit more casual and personal. “Our mission has always been to capture and share the world’s moments, not just the world’s most beautiful moments,” says Kevin Systrom, co-founder and chief executive of Instagram. “Stories will alleviate a ton of the pressure people have to post their absolute best stuff.”

Source: “Instagram Takes a Page From Snapchat, and Takes Aim at It, Too,” The New York Times (Aug. 2, 2016)