Have You Considered Investing In Real Estate?

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Have you ever considered buying a property as an investment? The property market is not reserved for experts and millionaires – you too could use it to make the most of your hard-earned savings.

A lot of people only buy a house as a family home and find paying off their mortgage before they reach retirement a big financial burden. Sound like you? However, buying a house as an investment (not living in it and instead renting it out) can make you a lot of money. In fact, it’s been shown that property outperforms other investments such as stocks, shares and savings accounts to bring you a nice fat profit in the long-term.

Yet somehow we’re all too cautious about hopping on the property investment train. Why? There are a few common apprehensions, questions and ‘buts’ people have when first looking at property, but there are good answers to all of them. So, before the words ‘finance’, ‘invest’ and ‘mortgage’ turn you off, have a read of the below to get clued in on what property investment can do for you and your piggy bank

But I don’t have the money to invest in property!

It’s a common misconception that you need to have all the cash up front. US banks may lend up to 75% of the property purchase price for investors, so for a $250,000 purchase (the average housing price in Lewisville according to Zillow) the total capital you need is $62,500. IRA’s and 401K’s are ways to get the down payment.

But I don’t want to take out another mortgage!

Before you panic about taking out a second mortgage, remember that the tenants who will be renting at your property will be paying off the mortgage for you, and that taking out a mortgage to pay for your investment means making more money.

But isn’t it risky?

As with all investments, there are low-risk and high-risk options.

But how can I make money from my investment if all my pennies are tied up in the property?

1) The increase in the property’s value over time. A well-chosen property and market will see the value of your investment jump up significantly over the course of five-to-ten years. You can then choose to resell at that higher price, keep it for longer to increase profits further or pass on the investment to your children.

2) The rent your tenants will pay you. This can cover the mortgage and/or provide you with an additional regular income – remember, rents will also increase over time as the area you invest in becomes more popular.

But I don’t want to be a landlord!

You don’t have to be! There are property management companies that exist to take that responsibility off of your hands. They can handle everything, from decorating and tenanting to taxes and reselling, and you’ll still be able to make a healthy profit.

When you’re ready to learn more or if you’re already clued in and want some more in-depth market advice, contact Jim Trump & Associates today! (214) 609-7123 or jtrump@kw.com

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DO NOT DELAY!! Move Up To The Home Of Your Dreams!

Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still below 5%.

However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease.

Here is a chart detailing this point:

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U.S. City Growth Is Slowing, But Suburbs Are Still Booming!

While cities are still outpacing suburbs, the gap is closing

The United States’ biggest cities grew more slowly last year as suburban areas population closed the gap, according to figures released by the U.S. Census on Thursday, suggesting that city-dwelling Americans may be looking to the suburbs again. While city growth overall is still outpacing the suburbs, the gap between the two is shrinking after several post-recession years in which downtowns and older urban cores around the U.S. saw significant population increases.

“The slowing growth in these urban cores and the increasing gains in the suburbs may be the first indication of a return to more traditional patterns of city-suburban growth,” said University of New Hampshire demographer Ken Johnson.

Of the 51 largest metropolitan regions in the U.S. in 2013, just 18 of them saw faster growth in cities than suburbs in 2013, compared with 25 in 2012.

The new Census figures show significant growth in suburban areas in the South and West. Almost all of the fastest-growing cities with a population of 50,000 or more were suburbs of major cities like Dallas, Salt Lake City, Phoenix, Nashville and Houston.

Texas suburbs saw the largest growth between 2012 and 2013, especially in areas around Austin, a city millennials have moved to in recent years for its tech jobs and cultural opportunities. The U.S.’s fastest growing city is San Marcos, whose population grew 8% in 2013. Cedar Park and Georgetown were also in the top seven fastest-growing cities, and all three Texas cities surround Austin.

“What you’re seeing, particularly outside of the northeast, is the growth of the ‘boomburbs,’” says Andy Beveridge, a demographer at Queens College. “But you still have substantial growth in the cities. Both are happening.”

Many of the nation’s biggest cities still saw the largest population increases, led by New York City, which added 61,440 people and remained the country’s largest with a population of 8.4 million. Houston, Los Angeles, San Antonio and Phoenix made up the top five in terms of population increases. One curious outlier was Chicago, the nation’s third-largest. Its population in 2013 grew by just 5,900, or 0.2%, to 2,719,000. That was smaller than the 8,600 it gained in 2012. In Chicago’s suburban Cook County, population growth was stable, and it increased in the city’s outer suburbs. Johnson points to Chicago as possibly suggesting an end to rapid city gains over suburban growth.

Historically, Americans have moved from downtown city cores to suburbs as they got older, had children and needed more space. Suburbs grew three times as fast as cities from 2000 to 2010, according to an analysis by William Frey, a demographer with the Brookings Institution. But the recession quickly reversed that as many older Americans felt frozen in place and decided to stay put, temporarily halting that city-to-suburbs flow. At the same time, those in their 20s and 30s have flocked to downtowns in that same period, often lured by jobs and the ease of commuting in an urban area.

Since the recession, city growth has largely outpaced suburban growth. From 2011 to 2012, city populations increased by 1.13% while suburbs increased by 0.95%, according to Frey. The new Census numbers show cities growing 1.02% and suburbs growing 0.96%.

But Frey says the U.S. is a long way off from the kind of suburban sprawl it witnessed throughout the 1990s and 2000s. Many of those living in cities have likely decided to stay put for good, Frey says, or are still financially unable to move or buy a house.

“We may never see that kind of suburbanization again,” he says.

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Why You Should Sell Your House NOW!!

School is back in session, the holidays are right around the corner, you might not think that now is the best time to sell your house.  But with inventory below historic numbers and demand still strong, you could be missing out on a great opportunity for your family.

Demand is Strong

Foot traffic refers to the number of people out actually physically looking at home right now. The latest foot traffic numbers show that there are more prospective purchasers currently looking at homes than at any other time in the last twelve months which includes the latest spring buyers’ market. These buyers are ready, willing and able to buy…and are in the market right now! As we get later into the year, many people have other things (weather, holidays, etc.) that distract them from searching for a home. Take advantage of the buyer activity currently in the market.

There Is Less Competition Now

Housing supply is still under the historical number of 6 months’ supply. This means that, in many markets, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future. Also, new construction of single-family homes is again beginning to increase. A recent study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference). The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.

The Process Will Be Quicker

One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.

There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate in the low 4’s right now. Rates are projected to be over 5% by this time next year.

It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should? Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important. 

For professional real estate service, contact The North Texas Home Hunter at (214) 609-7123 or jtrump@kw.com

 

10 Simple Steps to Losing Your House!

Open New Lines of Credit

Lenders must adhere to strict debt-to-income ratio requirements.  If you add a new car payment or credit card payment to the mix after you have been pre-approved, you debt-to-income ratios may now be too high to qualify for the proposed housing payment.

Run Up Balances on Current Credit Cards

Even if you don’t open new lines of credit, charging a substantial amount on a current card will raise the minimum monthly payment on that card your lender is using for financing. Again, this could throw your debt-to-income ratios completely out of whack!

Spend Down Payment Funds

Even if your lender verified down payment funds prior to your pre-approval, if your balance decreases to less than what you will need at closing and your lender requires new bank statements, this could cause a major delay in your closing date.  If you’re closing on a short sale with a hard deadline, you could end up losing the house if you cannot close in time and aren’t able to obtain an extension.

Lose or Switch Jobs 

Not much explanation needed here. If your qualifying income is no longer coming in every month, closing on your house isn’t going to happen unless you have a co-borrower who can carry the payment on his or her own.

Make a Late Payment on Your Credit Report

If your credit score is barely meeting the minimum threshold, one late payment could knock you out of the qualifying range.  If your credit score expires before closing and your lender needs to re-pull credit, then you would be in trouble if this has happened to you.

Failure to Communicate Alimony or Child Support to Your Lender

This information is important and will affect the amount for which you qualify. If it comes up too late in the process, there’s a chance you could lose the house, so please share this information with your lender, even if he or she doesn’t ask.

Failure in Communicating That You Are in the Market for a Condo

If you are purchasing a condo, the lender must factor in condo association dues, which can be very pricey. If your lender isn’t factoring a cushion for this into your pre-approval, you may find out that your debt-to-income ratios are too high once you are already under contract.

Getting a 10 Minute Pre-approval

Yes, I know you are busy, but getting a pre-approval shouldn’t be a 10 minute process with some online lender that you heard about on the radio.  Obtaining a mortgage loan is very complicated and your lender should spend time interviewing you, learning about your employment history, and reviewing the standard documents required for a mortgage pre-approval.  Just because you are supposed to receive court-ordered child support doesn’t automatically make that money qualifying income.  A lender must be able to show a history of receiving these payments on time, if not; the underwriter will not allow your lender to use the income.

Failure to Communicate an Employment Gap 

A lender should ask for your two-year work history upfront, and, if a large employment gap arises that your lender was unaware of, you could have issues if you don’t have a good letter of explanation.

Failure to Submit Lender-Required Documentation

Your lender may ask you for documentation several times throughout the process–in order to make sure he or she can submit your story to underwriting in a timely matter and close you on time. They aren’t doing this to be spiteful! You must be available via phone and email to respond to these requests in a timely manner.  If you aren’t, your loan won’t make it to final approval, and you will not be able to close on your home.

How Do You Make Sure This Doesn’t Happen To You? 

How can you be sure you won’t sabotage your own chances of closing on your dream home? Make sure you speak with a mortgage advisor who is knowledgeable, skilled, and thorough enough to make sure you’re not scaring underwriters away with your credit history, bank statements, and employment history.  A skilled loan officer will not conduct a 10 minute pre-approval or send you out to search for home without explaining closing costs and how to get to the closing table with ease. I have lenders that I work with that I trust implicitly, and will give you their information in order to streamline the lending process.

For professional real estate service, contact The North Texas Home Hunter at (214) 609-7123 or jtrump@kw.com

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The Hottest Trends In Residential Flooring

In the flooring world, carpeting is getting softer. Wood is getting more roughed-up. And vinyl is getting more luxurious.

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Yes, you read that right. “Luxury vinyl” isn’t a contradiction in terms — it’s the phrase du jour among those who pay close attention to the materials home buyers are eager to walk on.

“It’s the fastest-growing portion of the industry in the past two years,” according to Scott Humphrey, chief executive of the World Floor Covering Association, a trade group based in Anaheim, Calif., who said this flooring category has developed thanks to extraordinary photo technology that mimics wood (or just about any other material) so closely that you have to look twice to see that it’s vinyl.

But luxury vinyl is far from the only flooring product that’s drawing consumer attention. Here’s the NewHomeSource guide to what’s hot underfoot:

Carpeting

It’s getting more environmentally friendly and a few manufacturers are creating fiber combinations that take softness to a whole new level, Humphrey said. “Everybody is making carpet that’s green,” he said. “They have factories that do this all across the United States. Shaw Floors is the only one that recycles nylon into carpeting, but a lot of companies melt down polyester and make new fiber over and over.”

Humphrey, who grew up in a carpet-manufacturing family, said he regards the development of softer textures as the cutting-edge trend in the business. “The thing that has been most surprising to me is the return of luxury carpet,” he said. “Some of it is the softest carpet I’ve ever felt.”

He particularly cited Shaw’s Caress line (nylon, with a new way of processing the fiber) and Mohawk Flooring’s SmartStrand Silk line (a nylon product that the company says uses three times the number of fibers of other carpet). Humphrey said the carpet industry was likely to follow suit.

In terms of carpet styles, the current favorite probably is a broad genre called cut-and-loop, in which the pile is partly cut and partly looped to create a sculpted look or pattern, he said. “They’re ‘heathered’ and multi-tonal,” explained Amber Shay, vice president of the design studio for Standard Pacific Homes’ Denver operation, which works with homebuyers to choose the features and finishes of their new homes. “The trend is more toward the patterned carpet, with a cleaner finish, and some personality to it.”

Shay said Standard Pacific customers in her area (flooring preferences tend to vary by region) who favor carpeting tend to use it in bedrooms and on stairs.

Wood

With the advent of the “great room” concept that unites kitchen and family rooms into one expansive space, it’s become common to see hardwoods on kitchen floors, Shay said. “We’re almost always doing woods in kitchens,” she said. “With the great room plan, having consistent flooring is a big part of that picture, having the space ‘roll.’ ”

A popular route to take with wood floors are the laminate versions, she said. “(Laminate) is a thin piece of wood on a core that’s made of something else,” Shay explained. “It creates structural stability, so you have less movement in the floor and it’s less expensive than solid hardwood.”

Preferences in hardwoods are leaning toward darker stains, with a growing interest in gray tones, she said. “The trends are also toward larger planks or toward using multiple-sized planks and toward more exotic species — hickory, cherry, walnut.”

Look for more wood floors that have been hand-scraped and hand-textured, Shay said. Humphrey concurred: “People are willing to pay for a new floor, but they want it to look old.”

And in a related (and greener) vein, a growing segment of the market is interested in reclaimed woods, which have been salvaged from older residential flooring or even from old barns. “Or, a lot of companies are taking new hardwood and making it look old,” Humphrey said. “It’s like what happened with blue jeans — making them look worn.”

Bamboo flooring made a big splash in the industry some years back because it comes from an easily renewable resource, but the category gradually met with some resistance because some early versions were known to have shrinkage issues. “Bamboo is getting better,” Humphrey said of the recent incarnations. “I haven’t heard much about the shrinkage issue in a couple of years.” Look for bamboo to be produced in an array of colors and plank widths.

Luxury Vinyl

The “luxury” angle may be a bit of a stretch, but technology unquestionably has given some vinyls a whole new look. At its most basic, the process of producing it amounts to taking a photo of wood and printing it into the significantly less expensive vinyl flooring, usually in the form of squares or planks.

“But anything you can take a picture of, you can make it into vinyl tile,” Humphrey said. “It can go into various rooms — some of it looks like marble and people put it in bathrooms.”

Tile

Ceramic tile is getting bigger — literally. Tile in formats larger than the standard 12-by-12 inches are growing in popularity, though there’s a lot of variation in regional preferences, Humphrey said.

“And those digital prints that you see on laminate countertops and vinyl tile — they’re also doing that on ceramic tile, so that you might also see tiles that look like hardwoods,” he said.

In the Denver area, Shay said the biggest trend is toward “modular” sizes — rectangular tiles or 12-by-24-inch sizes. “We’re seeing lots of tile that looks like a fabric, or like wood,” she said. “Some of them have a concrete kind of look.”

Freelance writer Mary Umberger has covered real estate and home-related products for publications such as The Chicago Tribune, Inman News and other leading print and online publications.

Contact me for professional real estate services (214) 609-7123 or jtrump@kw.com

You’ve Played The Housing Market Perfectly. Don’t Blow It Now!!

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Many people suffered through the housing crisis. We realize that most of the heartache was the result of a housing and mortgage market gone wild. Many consumers were swept away by the waters of a frenzied real estate market that resulted in a crisis even the experts didn’t see coming.
However, some of the suffering was caused by home buyers and home owners simply making bad decisions. NOT YOU! You didn’t buy that house that stretched your family finances past the point of sustainability. You didn’t take out a home equity loan and buy new water skis. You didn’t do a cash-out refinance for the maximum amount possible.

Instead, you bought a home your family could enjoy – and afford! You waited for interest rates to drop to historic lows and then refinanced your mortgage; not for the sake of taking cash out but instead to lower your monthly payment. You have equity in your house and a nice, low mortgage payment. You played the housing market perfectly.

Don’t Miss the Last Move

Yet, there is one more move many should consider. With interest rates still at historic lows, and prices projected to increase by almost 20% over the next four and a half years, this may be time to buy a new home.
Whether you are a growing family ready to move-up to that waterfront home you always wanted or an empty nester downsizing to a home that makes more sense, now may be the time to buy. If you have considered buying a vacation/retirement home, there may never be a better time to move forward with that plan.
You have been fiscally astute enough to navigate the treacherous waters of a housing market that sank many a homeowner. Now, that the seas have settled, don’t think there aren’t even greater opportunities on the horizon.

Contact me at (214) 609-7123 or jtrump@kw.com