February 17, 2021
3 Ways Home Equity Can Have a Major Impact on Your Life
Posted by Nisha under Uncategorized | Tags: #homebuyers, cupertino real estate, Home Equity, LOS ALTOS REAL ESTATE, los altos realtor, mountain view real estate, nisha los altos realtor, Nisha Sharma Homes, SELLING YOUR HOME, silicon valley real estate, Sunnyvale |Leave a Comment
There have been a lot of headlines reporting on how homeowner equity (the difference between the current market value of your home and the amount you owe on your mortgage) has dramatically increased over the past few years. CoreLogic indicated that equity increased for the average homeowner by $17,000 in the last year alone. ATTOM Data Solutions, in their latest U.S. Home Equity Report, revealed that 30.2% of the 59 million mortgaged homes in the United States have at least 50% equity. That doesn’t even include the 38% of homes that are owned free and clear, meaning they don’t have a mortgage at all.
How can equity help a household?
Having equity in your home can dramatically impact your life. Equity is like a savings account you can tap into when you need cash. Like any other savings, you should be sensible in how you use it, though. Here are three good reasons to consider using your equity.
1. You’re experiencing financial hardship (job loss, medical expenses, etc.)
Equity gives you options during difficult financial times. With equity, you could refinance your house to get cash which may ease the burden. It also puts you in a better position to talk to the bank about restructuring your home loan until you can get back on your feet.
Today, there are 2.7 million Americans who are currently in a forbearance program because of the pandemic. Ninety percent of those in the program have at least 10% equity. That puts them in a better position to get a loan modification instead of facing foreclosure because many banks will see the equity as a form of collateral in a new deal. If you’re in this position, even if you can’t get a modification, the equity allows you the option to sell your house and walk away with your equity instead of losing the house and your investment in it.
2. You need money to start a new business
We’ve all heard the stories about how many great American companies started in the founder’s garage (i.e., Disney, Hewlett Packard, Apple, Yankee Candle, Keeping Current Matters). What we might not realize, however, is the garage (along with the rest of the home) supplied the start-up money for many of these companies in the form of a refinance.
If you’re passionate about an idea you have for a new product or service, the equity in your home may enable you to make that dream a reality.
3. You want to invest in a loved one’s future
It’s been a long-standing tradition in this country for many households to help pay college expenses for their children. Some have tapped into the equity in their homes to do that.
Additionally, George Ratiu, Senior Economist for realtor.com, notes:
“52% of Americans who bought their first home in 2020 said they got help with their down payment from friends or family. The number one lender? Their parents.”
It’s safe to assume a percentage of that down payment money likely came from home equity.
Bottom Line
Savings in any form is a good thing. The forced savings you can earn from making a mortgage payment enables you to build wealth through home equity. That equity can come in handy in both good and more challenging times.
February 12, 2021
Why It’s Easy to Fall in Love with Homeownership
Posted by Nisha under Uncategorized | Tags: #Buyers, #homeownership, #losaltosrealestageagents, #sellers, #sellingyourhomevirtually, cupertino real estate, LOS ALTOS REAL ESTATE, mountain view real estate, NishaSharmaHomes, silicon valley real estate |Leave a Comment
February 11, 2021
47% of New Buyers Surprised by How Affordable Homes Are Today
Posted by Nisha under Uncategorized | Tags: #losaltosrealestate, BUYERS, cupertino homes, cupertino real estate, los altos realtor, mountain view real estate, Nisha Sharma Homes, SELLING YOUR HOME, selling your home this fall, silicon valley real estate, Sunnyvale |Leave a Comment
Headlines matter. Right now, it’s hard to read about real estate without seeing a headline that suggests homes have become unaffordable for most Americans. In reality, there’s hard evidence that shows how owning a home is more affordable than renting in most parts of the country, as record-low interest rates are keeping monthly mortgage payments about 23% lower than the typical payment of 20 years ago. Despite the facts, misleading headlines persist, and they impact how hopeful homebuyers perceive the market.
In a recent survey by realtor.com, home shoppers indicated they were surprised by what they could actually afford when buying their first home. In fact, 47% discovered their budget was larger than they expected. George Ratiu, Senior Economist at realtor.com, explains:
“For first-time buyers, especially, the drop in the 30-year mortgage rate…has provided unexpected leverage. Lower rates allowed many buyers to stretch and buy more expensive homes while keeping their monthly budget the same.”
So why do these negative headlines that cast doubt on affordability continue to exist?
Most analysts only look at two of the three elements that make up the affordability equation: price and income. It’s true that incomes haven’t kept up with the price of houses. However, affordability is about the cost of the home, not just the price. For that reason, mortgage rates, the third element of the affordability equation, are important to consider.
For example, here’s the typical mortgage payment for assorted dates going back to 2000, as calculated by CoreLogic:Outside of the housing crash (when short sales and foreclosures drove prices down), it’s more affordable to buy a home today when you consider all three elements of the affordability equation: price, income, and mortgage rate.
Bottom Line
Whether you’re a first-time buyer or a move-up buyer, don’t let the headlines scare you away from your dream of homeownership. Instead, connect with mortgage and real estate professionals to determine what you can afford and what’s available at that price. Like almost half of the buyers in the survey, you may be pleasantly surprised.
February 10, 2021
The Luxury Market Is Attracting Buyers in 2021
Posted by Nisha under Uncategorized | Tags: #bayarearealestate, #Buyers, #cupertinorealestate, #losaltosrealestate, #losaltosrealtor, #luxurymarket, #Mountainviewrealestate, #nishaishyourlosaltosrealtor, #nishasharmahomes.com, #sellers, #siliconvalleyrealestate |Leave a Comment
As more people continue to identify their changing needs this year, some are turning to the upscale housing sector for more space or finer features. In their most recent Luxury Market Report, the Institute for Luxury Home Marketing (ILHM) shares:
“In a snapshot of 2020, despite the devasting effects of the coronavirus pandemic, the luxury real estate market has seen one of its strongest years since 2008. In comparison to experts’ predictions in early 2020, it is remarkable how significant demands for property type, location, and amenity preferences have changed amid the pandemic.”
With more opportunities to work from home and a growing interest in having extra space for things like virtual school, working out, and cooking more meals, the desire to own a home that can meet these needs continues to increase. Additionally, record-low mortgage rates are creating opportunities for homebuyers to stretch their legs into higher price points or even expand their real estate portfolios. The ILHM report continues to say:
“Experts believe that the demand for exclusive residential properties outside the metropolitan areas will continue well into 2021; even with the introduction of vaccines, the pandemic is far from over.
For those who have moved to the suburbs and beyond, moving back to the city full time is unlikely while the work from home trend remains. Many of these affluent homeowners are now making their secondary properties their primary residences for the foreseeable future.”
If you’re interested in buying a home this year, it appears that some higher-priced markets may have more homes to choose from than those at lower price points. Javier Vivas, Director of Economic Research at realtor.com, notes:
“Interestingly, markets, where new supply is improving the fastest, tend to be higher priced than those that have yet to see improvement, suggesting sellers are more active in the more expensive markets.”
Bottom Line
If you’re hoping to buy the home of your dreams, this could be the year to achieve that goal. Let’s connect today to explore your possibilities.