Real Estate related topics

Will FHA Loans Save Homebuyers Money in 2023?

Will FHA Loans Save Homebuyers Money in 2023?If you are looking for a home but do not have a large sum of cash to make a down payment an FHA mortgage program can be beneficial to you. According to the government's latest numbers, FHA loans may be very lucrative for those looking for some help in purchasing a home over the next year.

FHA stands for the Federal Housing Administration and they are the ones that back FHA loans to help a larger number of borrowers with a focus on first-time homebuyers to obtain mortgage loans to purchase homes. An FHA loan gives a borrower a chance to purchase a home by making a lower down payment of 3.5% as long as they have a credit score of 580 or above.

The FHA does not originate or fund the loans directly they work through agency-approved lenders. The FHA does however ensure these lenders against loan default. When you take out an FHA loan to purchase a home you will need to pay mortgage insurance premiums often referred to as MIP to help cover this default insurance.

MIP gets expensive and some mortgage and financial advisors have raised concerns about the monthly cost of mortgage insurance. But the latest FHA balance sheet can help to address insurance problems and may look more favorable for taking out an FHA loan in 2023.

FHA fund according to the numbers

The fiscal year for the FHA ending in September 2022 reported that there was $141.7 billion in cash on hand and the mutual mortgage insurance fund. This number increased by 41.2 billion from just the previous fiscal year. This fund is required to have a 2% raise or ratio. This means that it must maintain 2% of all possible insurance claims at the end of September 2022 the fund had a reserve ratio of 11.11% which...

Important Information About Assumable Mortgages

 Important Information About Assumable MortgagesAn assumable mortgage not only provides funding for a home buyer to purchase a home and move into the former seller's house but the opportunity to take over the former homeowner's loan. The buyer has the opportunity to take on the remaining balance of the current mortgage on a home as well as the repayment schedule and interest rate of that mortgage.

As mortgage rates are soaring much higher than anyone expected back in January of this year assumable mortgages are becoming more attractive to buyers that are hoping to find ways to get their interest rates down. For example, if a buyer takes on a mortgage loan originated in 2016 when the average rate was around 4% this could save a hopeful buyer a whopping 3% in interest points.

There is a twist to taking on the current mortgage on a property and that is that assuming the mortgage can only be done through a government-backed mortgage. These are loans including Federal Housing Administration FHA loans, Department of Agriculture USDA loans, and other government-backed loans. And in addition to assuming the home's current mortgage debt, the buyer will be responsible to pay off the difference between the mortgage balance and the home's current fair market value. This may cause a need for a second mortgage on the property.

How to assume an assumable mortgage

For a buyer to assume a current mortgage it requires the approval of the current loan servicer. If the buyer and seller enter into an agreement to assume the mortgage without the lender's knowledge they take a huge risk. If a lender finds out that a new homeowner has...

An Overview of Prop 19 and How it Benefits Homeowners

An Overview of Prop 19 and How it Benefits HomeownersProp 19 in California is a tax benefit for certain homeowners. The Act has recently been expanded to be more beneficial to those who qualify for the benefits. 

What is Prop 19?

Prop 19 is the Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act. This is quite the mouthful so most people refer to the Act as Prop 19. 

This is a property tax benefit that allows a homeowner of a primary residence in the state of California who is over the age of 55, severely disabled, or the victim of wildfire or natural disaster to transfer the primary residence (first home, lived in a majority of the year) taxable value to a new primary residence as long as that home is within the state of California. 

This act allows for transfer regardless of the location or value of the new primary residence home. It can be a home that is newly constructed or purchased as their new principal residence within 2 years of the sale of the first primary residence. 

Recent Prop 19 Expansions that Began in April !, 2021

The tax measure has expanded to be more beneficial for California homeowners needing to utilize the benefit. Prop 19 now allows replacement home purchases anywhere within the state of California. This means that a homeowner can retain a lower property tax bill that they paid on their first home when moving anywhere else in California to find a new or replacement home. 

The benefits also allow a homeowner to purchase a more expensive property. Eligible homeowners could make use of the new expansion rules to purchase a more expensive property. This does not mean that...

More Buyers are Now Considering Adjustable Rate Mortgages

More Buyers are Now Considering Adjustable Rate MortgagesAn adjustable-rate mortgage most often known as an ARM has been an alternative mortgage product for some time. Often a majority of buyers will choose a more traditional loan type such as a 30-year fixed-rate mortgage. But since mortgage rates have been significantly climbing just in the past year more and more homebuyers are beginning to look into the possibility of taking out an ARM mortgage.

Home buyers are looking into ways to bring down their housing costs especially when it comes to purchasing a home and their monthly mortgage payment. The reason adjustable-rate mortgages are coming back into play for many potential homebuyers is that they offer a lower interest rate which turns into a lower monthly mortgage payment.

How does an adjustable rate mortgage work?

An adjustable-rate mortgage offers a fixed interest rate for a set period of time at the beginning of the mortgage. This period of a fixed and guaranteed rate can be anything from one year to 10 years. The most common type of adjustable-rate mortgage is a five-year fixed rate at the beginning of the loan life. After this initial guaranteed fixed rate period ends the rate becomes adjustable and will change to the current average mortgage rate at the time.

Depending upon your mortgage contract terms an adjustable rate mortgage can adjust your interest rate once per year or every six months. The fixed-rate portion of an ARM mortgage is almost always lower than the current average fixed-rate mortgage interest rate. The current average fixed rate for adjustable-rate mortgages is 4.6% as compared to the...

Ways To Make Moving While Expecting Easier On Moms-To-Be

Easier moving can start with thorough preparation. Not only are expecting moms required to handle the chores of prepping the new place on top of packing the old, but they must always be thinking of what’s OK for the baby. One of the first things to do to help is to consult the doctor. Recommendations on avoiding heavy lifting may already be at the forefront of your mind, but medical experts could offer further advice. This also presents an opportunity to gather necessary medical information and documents to have for a new doctor once the move is complete. While stress can’t be completely removed, these suggestions and more like them can help the move be less stressful. For further tips and a handy timeline on moving while pregnant, please see the accompanying resource.

Graphic created by New City Moving.

For more information on living in Santa Cruz, including Santa Cruz real estate please contact us any time. 

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Surprising Items Homeowners Insurance Doesn't Cover

Surprising Items Homeowners Insurance Doesn't CoverHomeowners Insurance is vitally important for every homeowner and as such, it is important for every person who owns a home or plans to own one to know the basics about home insurance. When many of us think about homeowners insurance we think of it as protection to cover damage and loss in our homes with unforeseen acts of nature or emergent accidents.

This being said many of us have a preset list of ideas that we assume would be covered under homeowners insurance. Many homeowners are surprised to find out that there are some things homeowner insurance will not cover. It is wise for every homeowner to make sure they know their policy and exactly what their insurance covers them for.

Five Surprising Things Homeowners Insurance Does Not Cover

Flooding

Since this is most often caused by an accidental pipe burst in a home or through a crazy act of nature many people assume that flooding is automatically covered in their basic homeowner's insurance coverage. When it comes to a burst pipe this type of flooding is covered under homeowners insurance but when it comes to acts of nature most often homeowners insurance is not going to help to restore your home.

Earthquakes

Again another natural disaster that many would assume is automatically covered with homeowners insurance. However, it is best to check your policy as many basic insurance plans do not cover earthquake damage. Homes within areas prone to earthquakes may be able to purchase additional coverage from their homeowner insurance company at a discounted rate and it is well worth adding on to your...

First Time Homebuyers: How to Get Help with a Down Payment

You may be ready to buy a home and already narrowed down your options but without enough money for a down payment, you'll have to wait a little bit longer. However, you shouldn't lose hope just yet. There are several options for first-time homebuyers to get help in raising a down payment. Being aware of these options means you can pick the one that suits your needs the best. Here are some of the options you can go for:First Time Homebuyers How to Get Help with a Down Payment

Low-down payment mortgages

Lenders have been asking for a 20% down payment in most cases. However, there are several low-down payment options especially if you are buying your first home. They include:

  • VA loans. These loans are backed by the Department of Veterans Affairs. You can also go for USDA loans that are backed by the Department of Agriculture. If you qualify for these loans, you will enjoy a 0% down payment option.
  • FHA loans. These are backed by the Federal Housing Administration, and they can allow you to pay a 3.5% down payment.
  • Conventional loans. There aren't backed by the government but in this option, your down payment can be as low as 3% as long as your credit score is stellar

If you don't have to raise a big down payment it means you can move into your new house faster and start building equity.

State and local down payment assistance

In every state, there are down payment assistance programs usually implemented by employers, foundations, government agencies, and even nonprofits. The assistance will be in the form of...

Things To Prepare For With Rising Interest Rates

things to prepare for rising interest ratesWhen you hear of the possibility of rate hikes by the Federal Reserve, you can take several proactive measures to minimize the effect on your financial situation.

Rising Interest Rates

When the Fed starts pushing up interest rates, you'll see the effects flow through to your credit card debt, mortgage rates, and rates on car loans. If you're struggling to pay your credit card bills each month or you pay your bills but can only swing the minimum payment, even a small rise in interest rates could create a problem. As the rates gradually rise, more of your monthly payment will go toward interest and less toward paying off the principal portion of your balances.

Credit Card Payments

If you're only making minimum payments on your credit cards, start paying more. If you can't come up with the money to increase your payments, start budgeting or tighten your existing budget, cut spending, and pay down credit card debt with the money you save. If you have money sitting in low-interest savings accounts, using that money to reduce your credit card debt and avoid higher interest gives you, in a way, an immediate return on your money.

Home Equity Loan Over a Line of Credit

If you have a home equity line of credit, consider taking out a home equity loan to repay it if interest rates are expected to rise. Since interest rates on home equity lines of credit are tied to the prime rate, if rates rise, so will the interest on your line of credit. Depending on how much you borrowed, this payment could quickly become one you can't afford, and your house is at risk. By replacing the home equity line of credit...

Great Tips on ADUs

Using Your ADU as a Rental? Here’s What You Need to Know

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Have you been thinking about using your ADU as a rental unit, but you’re just not sure where to start? The potential earnings and benefits of renting your ADU are endless, but given that every city has its own ADU zoning restrictions, HOA regulations, and building laws, actually renting out the unit can be difficult. For example, laws surrounding rental ADUs from Los Angeles, CA are completely different from the laws in Houston, TX.

To help you learn more, we reached out to ADU experts to share their best advice and tips about using your ADU as a rental unit. Keep reading to see what they had to say.

Read the entire article on ADUs here

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Starting a Vacation Rental Business: A Step-By-Step Guide

If you’ve been thinking about starting a vacation rental business, it’s never been a better time to do so. Global News Wire reports that the industry is expected to grow to $11.3 trillion net worth in the next ten years. Confused about where to start? Property in Santa Cruz shares a step-by-step guide to running a vacation rental below!Starting a Vacation Rental Business A Step-By-Step Guide

Do Your Homework

There’s a lot to think about when you invest in real estate. Here are some key factors you need to research before launching your business.

  • Pricing and demand: Research what similar properties in your preferred area are charging and the kind of vacation home that is preferred to maximize your chances of beating the competition.
  • Business model: From sole ownership and property management to arbitrage or working with a subcontractor - pick the right business model for your needs.
  • Business plan: A solid business plan will include your USP, target audience, opportunities for growth, and critical selling strategies.

Factor in Your Costs

Running a rental can be pricey, so you’ll need a clear idea of incoming...

Renting vs Buying – Which Is Better?

Homeownership has long been a sign of success, but comparing renting to buying isn't all that clear-cut. Renting is less capital intensive, and it gives you the freedom to move when you please. Buying a home will help you build equity and wealth. There are many financial implications and lifestyle factors you should consider when you're making the choice of whether to rent or buy. Learn more so you can make the best decision for yourself.

OWNINGRenting vs Buying – Which Is Better

Buying a house is a serious step in your life and you need to consider all the problems you may face and review the advantages you get with your own property. There are plenty of reasons to buy or not to buy a house, but let's highlight the key points that should help you understand whether you’re ready to buy your own property. Home equity is the difference in the market value of your home and how much you owe.

Owning a house is, first of all, a huge investment. Even if you’re not pulling your equity loan, there is always a chance to sell your house later for a better price. The imputed rental income that you receive as a homeowner is not taxed. On top of that, you can deduct your mortgage interest and property tax payments from your federal taxable income.

Owning a house gives you real improvement freedom. There is no landlord who says what you can and cannot do while decorating and improving your house. Renovate your property or completely redesign your bath, you can do whatever you want with your own place. This is something worth paying for. Unfortunately, despite the freedom mentioned above, when you take a mortgage for a house, you’re stuck with this particular place for a long time....

Relocating Out Of State

Are you planning to move out of state? This is no easy task. Generally, when you are planning to cross the state line, it seems like there are too many priorities on your checklist to accomplish. There is no doubt that moving is hard, and it seems the farther you go, the harder it becomes. Interstate moves are characterized by a set of challenges that make them more complicated. Whether you are relocating to another state to take up a job or you want to move closer to your family, or you want to change the environment for some personal reasons; whatever may be your reasons, out-of-state moves require proper planning.

Craft a Plan for Moving
Create a high-level master plan of how you’ll organize your move. Figure out how much money you can spend while moving out of state. Can you transport any of your belongings in your own car or rental truck, or will you leave everything to professional movers? If you’re planning a DIY move, you’ll want to look into the cost of renting a moving truck.

Make a list of any friends or family members who could help you with moving out of state. If you’re driving some of your belongings yourself, how much time do you have to reach your new home? Will you take out a moving insurance policy? The key to this first step is to prepare the big plans first so you don’t get bogged down in the nitty-gritty details down the line.

Get Rid of Stuff Before You Move
Take inventory of everything that you’ll bring to your new place, being sure to focus on the things you really need, like your dishes and a bed frame. Moving out of state can get very expensive very quickly, so you’ll want to keep costs under control by only moving these necessities.

Secure Housing and Employment
While it might not always be possible, moving out of state after you have a job lined up will take a huge load off. How do you find a job...

How to Kill a Perfectly Good Real Estate Deal

How to Kill a Perfectly Good Real Estate Deal

In today's real estate world, buyers know when the property hits the market almost immediately. With the Internet and updated real estate websites, homes can hit the market, be seen that afternoon and have an offer by dinnertime. Properties that sell quickly often come extremely close to the listing price if not over in hot markets. Buyers can look at all the pictures of a home, contact our agent and have an offer on the table within a few hours.

If a home is priced correctly, is in decent condition, and has a great location, chances are that home will sell fairly quickly. If the home doesn't have one of these three features buyers will typically move on. The longer a home sits on the market the higher the risk that the property won't sell for list price. If buyers do return to a home it's typically because the price has been lowered or they can't find anything better.

This is why time is one of the biggest things that can kill real estate deals. Not only the length of time a home sits on the market but during the real estate transaction as well. If parties do not respond in a timely manner or within the three day response time, the deal can technically be terminated by either party. If buyers submit an offer and sellers refused to return the offer, counter, accept or reject it technically dissolves.

Days on the market also can kill a real estate deal. "When a home first comes on the market everyone who is looking for a particular type of home in certain price range and location sees it right away online. If it does not sell, those potential buyers have moved on, and as time goes by, only buyers new to the market are discovering the...

Blocked Summertime Noises Using These Simple Techniques

I tried a variety of noise-cancelling devices, including white-noise makers, ear plugs, and noise-canceling headphones, but none of them seemed to work. 

BUILDING WORK

When dealing with extremely loud noises such as construction or road construction, you should start by lowering the decibels. When jackhammers and electrical saws cause your ears to become damaged, full, The Best White Noise Machineor ring, the noise is simply too loud and may be harming your hearing.

According to Sam Nicolino, the engineer who invented the white-noise devices LectroFan EVO and Sound+Sleep, the moderate rhythms of the white-noise machine should fill the room rather than sit in a nook.

READ MORE:

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Top Googled Real Estate Question- What Does Contingent Mean in Real Estate?

The number three googled real estate topic this week was “What Does Contingent Mean in Real Estate?” This question saw a 130% rise in inquiries. As buyers are shopping for homes it is not uncommon to see the word contingent come across in home listings, real estate articles, and more. Or for a seller to see this word pop up in an offer agreement.Top Googled Real Estate Question- What Does Contingent Mean in Real Estate?

What does the word contingent mean when it comes to real estate?

In real estate contingent is a status stating that the seller has accepted a buyer’s offer and that the offer has certain requests to be met before the sale becomes final. If the buyer or in some cases the property is unable to meet the contingencies then the buyer may back out of the sale agreement and receive their earnest money back.

In general the fewer contingencies in a purchase agreement the better it is for the seller.

The Most Common Contingencies in Real Estate

According to the National Association of Realtors Confidence Index Survey, 76% of offers had contingencies in the purchase offer. These were the top four contingencies reported in the survey:

Inspection Contingency

This is a smart contingency that every home seller should come to expect from a buyer....

Prop 19 - Allows to Move Your Tax Base Without Penalty to Other Counties in California

TAX SAVINGS FOR OLDER HOMEOWNERS

Thanks to Prop 19, seniors, retirees, and all homeowners aged 55+ can move closer to family, medical care, or to a home that better meets their needs anywhere in California without a
tax penalty.

 Prop 19 removed unfair location and price restrictions, allowing older homeowners to transfer the tax base of their home to a new home.*

SAVINGS FOR HOMEOWNERS WITH SEVERE DISABILITIES

Prop 19 also removed unfair restrictions on Californians with severe disabilities, allowing homeowners to move to a replacement home anywhere in California without
a tax penalty.*

 Under Prop 19, homeowners with severe disabilities can transfer the tax base of their existing home to a replacement home up to three times.

HOUSING RELIEF FOR VICTIMS OF WILDFIRE AND NATURAL DISASTER

After wildfires destroyed more than 24,000 family homes in the past few years, wildfire victims have faced massive property tax hikes when relocating to another home.

 Prop 19 allows ...

Stillwater Cove, Ocean View Homes in Pebble Beach

Individuals who have thought about purchasing Ocean view homes in Pebble Beach should know that doing so will grant them access to one of the region's most scenic areas: Stillwater Cove. Filled with numerous attractions and recreational activities, this region will keep you and your family active and alive during vacation season or throughout the entire year should you choose to settle here permanently. 

stillwater cove in pebble beach

Beautiful Beaches

One of the biggest benefits of buying Ocean view homes in Pebble Beach is that doing so situates you near the public beach at Stillwater Cove. The beach extends out below the community's golf course and is filled with beautiful white sand. Individuals who enjoy the active lifestyle can scuba dive when they visit the beach, and touring companies will oftentimes make kayaking tours available. Those who prefer to rest and relax on the beach can sunbathe and take in the beautiful scenery without moving a muscle!

Tourist Attractions

stillwater cove fishing in pebble beachAnother...

How To Make Your Home Safe And Secure For Your Senior Years

29798 Highway 1, Carmel, CA 93923As people age, it's important for them to do all that they can to make their golden years healthy and happy. While there are many steps that should be taken to realize this objective, preparing the home for one's senior years is incredibly important. This is the case for many reasons, including the fact that the home preparation process can decrease the likelihood of accidents and injuries. Luckily, preparing your home for your senior years can be relatively simple. Use the information and instructions outlined below to complete the process quickly and correctly:

1. Move Downstairs

One of the best ways to increase your level of safety within the home is by moving downstairs. Maintaining a bedroom upstairs is a recipe for disaster. This is the case because living upstairs will require that you travel up and down the stairs throughout the day. Doing so will increase the likelihood of unwanted trips and falls. Another issue with living upstairs is that doing so can make it more difficult for you to leave the home in the event of an emergency. An alternative to moving downstairs is relocating to a single level home. If you're considering this option, note that you can purchase Camel homes for sale that conform to your requirements for safe, secure living.

2. Use Proper Lighting

In addition to moving downstairs, make sure that you use proper lighting. Poorly lit regions of the home will make it difficult for you to move freely. Also note that without...

Eco Friendly Bridges May Save Time and Money for Carmel Valley Home Builders

Carmel Valley is an incredibly beautiful area with unique terrain. The terrain is one of the appeals of living here, but it also means that Carmel Valley homes for sale are often on steep hills or otherwise face potential access challenges created by the terrain itself. 

However, there is a solution. New research shows that glulam timber bridges can last between 75 and 90 years under ordinary use at the relatively low traffic levels you are likely to see on county and township roads in parts of Carmel Valley

These are bridges built from glulam, an engineered wood product that combines wood strips with glue to create a superior structural component compared to unmodified wood timbers. They are also cost effective. 

The research was conducted at J. Lohr Structures Lab. They calculated the typical load and stress tested the bridge to simulate use over a long time frame. The amount of stress incidents the structure survived suggests that such bridges can last for decades.

The bridge they tested was donated by Gruen-Wald Engineered Laminates of Tea. The U.S. Department of Transportation and the South Dakota Department of Transportation worked together as co-sponsors. 

Such bridges take less time to build than other alternatives. This is beneficial to the community by keeping road closures to a minimum. As we've seen with Big Sur fires or the slide that took out the Pfeiffer Canyon Bridge, getting a community back and thriving depend, on speed and cost. For smaller roads and private residences these glulam bridges may one day have their day.

This type of bridge also fits in well with the aesthetic of ...

Upgrading Home to Pro, Perfect for Happy Aging

Once upon a time your house was filled with the laughter and happy chaos of children but now they have all grown up and moved away from the family home. Should you be looking for other Pacific Grove homes for sale? Why not consider instead remaining in your familiar home and neighborhood and upgrade and redesign the spaces to better meet your needs as you grow older.

Many older adults choose to downsize to smaller homes once their children move out on their own but many more choose the option of upgrading their current family to make it more “user friendly”. The facts are that with aging the body sometimes just can’t do what it once did, as well as it did. That does not mean however that you need to move away from the treasured family home and all the memories made and stored there. Upgrading the family home to meet your current and future needs is a viable and acceptable option.

Upgrading and Redesigning for Better Functionality

Your family home likely had more than one storey to it, with numerous bedrooms and likely more than one bathroom. Even though your kids have moved out you know they will be back, filling the house once again during holiday gatherings, or simply for surprise visits. And if they should have children of their own in the future you will definitely need those rooms and extra bathrooms. 

For now, for you and your partner, the house can be redesigned to make your everyday life easier. Simple additions and adjustments can make for less strain and chance of injury, ease of movement, and better accessibility.

Ideas and Tips to Help You with Your Redesign Plans:

As you may already be aware aging does not always happen as gracefully as we hope. Illness,...

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