Seattle homes sold at fastest pace ever in 2017, Zillow says

Homes in Seattle sold in an average of 47 days in 2017. That’s the fastest it’s ever been, according to a new analysis by Zillow.

It means something recent house hunters already have learned — be ready to move fast when you find the home you want.

“As demand has outpaced supply in the housing market over the past three years, buying a home has become an exercise in speed and agility,” said Zillow Senior Economist Aaron Terrazas.

The 47 day average in made Seattle the third-fastest market for selling homes in 2017. Only San Jose, Calif. (41 days) and San Francisco (43 days) were faster.

Zillow said May and June were the fastest-selling months in 2017. Homes stayed on the market for 42 days. That includes closing.

It’s just going to get worse in 2018. Zillow predicts there will be 19.7 percent fewer homes on the market this year.

“This is shaping up to be another competitive home shopping season for buyers, who may have to linger on the market until they find the right home but then sprint across the finish line once they do,” said Terrazas.

Be prepared to pay more than you planned. Zillow says 52.4 percent of homes in 2017 sold for more than the asking price.

Nationwide, it took 81 days for the typical U.S. home to sell in 2017. The slowest market for selling was New York City (134 days).

~Travis Pittman, King 5 News

Eleven Things to Know About Mortgage Interest Deductions for 2018

With the passing of the Tax Cut and Jobs Act, a lot is about to change financially for citizens in the United States. One of the ways is how it will reflect financially for homeowners. Although this tax cut is for 2018 (meaning citizens won’t see changes until February of 2019), there will still be a dramatic change for U.S. homeownership. For a summary of things you need to know follow this link:  2018 Mortgage Interest Deductions

First thing to do now if you want to buy a home soon

If you’re planning to buy a home this year, you’ve hopefully saved up more than you think you’ll need for a down payment. But stockpiling money isn’t the only thing that should be on your financial checklist before becoming a homeowner.

First and foremost, you should check in on your credit score, says Suze Orman, financial expert and former CNBC host. That’s because, the higher your credit score, the better rate you’ll be able to get on a mortgage. And that matters because even a fraction of a percent can dramatically alter the total you’ll pay over time.

“Your goal should be to get the best possible loan,” Orman writes in a recent blog post. “The better your financial profile is, the lower the interest rate you will be offered. Even a small interest rate difference can add up to tens of thousands of dollars in savings over the life of a loan.”

FICO credit scores range from 300 to 850 and signify your trustworthiness to financial institutions. While anything over 650 is considered decent, Orman recommends aiming for a score of 740 or higher before applying for a loan.

If your score is less than ideal, Orman recommends taking three immediate actions to improve it: pay down credit card balances, pay down other debt, such as student loans, and stop buying anything that isn’t completely necessary.

You want to improve your credit utilization ratio, which is calculated by dividing your balance by your credit limit. Ideally, you’ll never hold a balance of more than 30 percent of your limit. So If you have a card limit of $10,000, you never want your balance to exceed $3,000.

As you get ready to consider putting in an offer on a home, you want to pay down as much debt as possible and refrain from splurging.

“The best advice is to charge as little as possible in the months leading up to a home purchase,” Orman writes.

You’ll also want to have excess cash on hand that can prove to lenders that you’ll be covered even in the event of an emergency. “Though there is no hard-and-fast rule, lenders want to know that if you get laid off, or sick, you can cover the mortgage for at least a few months,” Orman says.

~CNBC

Five First-Time Home Buying Mistakes to Avoid

Thinking about buying your first home? Before you can unlock the door to homeownership, you have to take some important first steps including:

Getting approved for a mortgage.
Choosing the right real estate agent.
Finding the right home that fits your budget.
Here are five common mistakes first-time homebuyers should avoid.

1. More to it than mortgage payments

Many first-time homebuyers decide to buy when they feel ready for a mortgage. But just because they can afford the mortgage payments doesn’t mean they can afford to own a home, says New York attorney Rafael Castellanos, president of Expert Title Insurance.

“They have an idea of what their mortgage payment is going to be, but they don’t realize there’s much more to it,” he says.

Property insurance, taxes, homeowners association dues, maintenance, and higher electric and water bills are some of the costs that first-time homebuyers tend to overlook when shopping for a place.

“Keep in mind property taxes and insurance have a tendency of going up every year,” Castellanos says. “Even if you can afford it now, ask yourself if you’ll be able to afford the increased costs later.”

2. Looking for a home first and a loan later

Homebuying doesn’t begin with home searching. It begins with a mortgage prequalification — unless you’re lucky to have enough money to pay cash for your first house.

Often, first-time homebuyers “are afraid to get prequalified,” says Steve Anderson, a broker and owner at Re/Max Benchmark Realty in Las Vegas. They fear the lender may tell them they don’t qualify for a mortgage or they qualify for a loan smaller than expected. “So they pick a price range out of the sky and say, ‘Let’s go look for a house,’” Anderson says.

And that’s not how it should be done. Yes, it’s more fun to go look at houses than to sit in a lender’s office where you have to expose your financial situation. But that’s a backward approach, says Ed Conarchy, a mortgage planner and investment adviser at Cherry Creek Mortgage in Gurnee, Illinois.

“You get preapproved, and then you find a home,” he says. “That way, you’ll make a financial decision versus an emotional decision.”

3. Not getting professional help

New to the homebuying game? You’ll need a reputable real estate agent, a good loan officer or broker, and perhaps a lawyer.

Venturing into this process alone, without professional help, is not a good idea. While every rule has its exception, generally, first-time homebuyers should not try to deal directly with the listing agent, Anderson says.

“If you are getting divorced, are you going to go to your husband’s attorney for help? Of course not,” he says. “Same here. If you go to a listing agent, they are only going to show you their listings. You must find a buyer’s agent to help you.”

If you hire an agent without a referral from friends or family, ask the agent to provide references from previous buyers. The same goes for loan officers or mortgage brokers.

“It’s very hard for first-time homebuyers because they don’t know who they are dealing with,” Anderson says.

It’s crucial to find a professional who will give you “truly independent advice,” Conarchy says. Sometimes that means hiring a lawyer.

Shop today for the best mortgage deal.

4. Using up savings on the down payment

Spending all or most of their savings on the down payment and closing costs is one of the biggest mistakes first-time homebuyers make, Conarchy says.

“Some people scrape all their money together to make the 20 percent down payment so they don’t have to pay for mortgage insurance, but they are picking the wrong poison because they are left with no savings at all,” he says.

Homebuyers who put 20 percent or more down don’t have to pay for mortgage insurance when getting a conventional mortgage. That’s usually translated into substantial savings on the monthly mortgage payment. But it’s not worth the risk of living on the edge, Conarchy says.

“I’d take paying for mortgage insurance any day over not having money for rainy days,” he says. “Everyone — especially homeowners — needs to have a rainy-day fund.”

Need a mortgage but don’t have much of a down payment? Search today for a low-down-payment mortgage.

5. Getting new loans before the deal is closed

You have prequalified for a loan. You’ve found the house you want. The contract is signed and the closing is in 30 days. Don’t celebrate by financing another big purchase.

Lenders pull credit reports before the closing to make sure the borrower’s financial situation has not changed since the loan was approved. Any new loans on your credit report can jeopardize the closing.

Buyers, especially first-timers, often learn this lesson the hard way.

“They sign the contract and they want to go buy new furniture for the house or a new car,” Anderson says. “I remember one case where, just before closing, the buyer drove to the office and said, ‘Look at my brand-new car.’ I told them, ‘You’d better go back to that dealership.’”

Luckily, the dealership agreed to wait a couple of days to report the loan to the credit bureaus, he says. Otherwise, it could have killed the deal.

~Polyana da Costa, Bankrate