Talking Real Estate | August 2020 Rocky Mountain, REALTORS

Don’t Give Up!

It’s no secret that Millennials, ages 24 to 34, have been hit hard in 2020. The triple whammies of student loans, COVID-19 and record job losses are huge challenges to face. It would be easy to give up your dream of owning a home, but we say where there’s a will, there’s a way.

How you manage your expectations, resources and opportunities will make all the difference in achieving what you want out of life, including owning a home.

First, don’t give up. Your timeline may be busted for buying a home this summer, but you can still make it happen sooner than you think.

Look for ways to save money. Don’t buy stuff you don’t need. Make your own Starbucks coffee and take your Teva and a packed lunch to work. Take advantage of interest deferrals on your student loan. Open a high-yield savings account that pays compound interest.

Move to a less expensive apartment, get a roommate to share expenses or move back home temporarily. Pay your parents a reasonable rent for food and board and save the difference of what you’re paying now or use it to pay off debt.

Look for ways to make money. Do you have a hobby or skill that you could turn into a side hustle, like carpentry, quilting, baking or small business accounting?

Don’t worry about what others think. Instead, encourage each other. It will be worth it when you move into your own home.

How Long Do Roofs Last?

Angieslist.com suggests that a typical asphalt shingle roof will last about 20 to 25 years, depending on variables such as the quality of the shingles, the professionalism of the installation, homeowner maintenance over the years, and, of course, the weather.

Your roof should have several lines of defense or redundancies. If one part fails, such as when a shingle blows off, there should be other protective layers such as an underlying membrane, flashing around chimneys and sealants that prevent the roof from leaking.

Because 70 percent of U.S. homes have asphalt or composition shingle roofs, replacement roofs tend to be similar. According to Roofingcalc.com, the average roof size in the U.S. is 1,700 square feet. Professional roofers calculate area by 100 square feet, so it would take 17 “squares” to reroof the average home. Materials and labor can run anywhere between $350 and $550 per square, or approximately $6000 to $9350.

Leaks through the ceiling, missing shingles, frayed or curling shingle edges, or erosion of the mineral granules are all signs that it’s time to repair or replace your roof. Have your roof inspected by a reputable roofing contractor, who can tell you if the roof was properly installed and maintained.

Check with your homeowner’s insurance company about coverage. Insurance.com warns that many companies will amortize coverage according to the age of the roof and refuse coverage if the roof has two or more previous layers of roofs or if the roof is 20 years or older.

Unpacking Mortgage News

In June 2020, average mortgage interest rates fell below three percent for the 30-year-fixed-rate mortgage – the lowest level in modern recorded history, according to Mortgage News Daily. What caused such a dip?

A stock market sell-off sent investors to the relative safety of the bond market, wrote housing journalist Diana Olick. Mortgage rates loosely follow the yields on 10-year U.S. Treasury bonds. As more bonds were purchased, the yields went down, and mortgage rates followed. But that’s not all that happened.

Also in June, the Mortgage Bankers Association’s Mortgage Credit Availability Index hit its lowest number since June 2014. The simple reason is that lenders don’t like uncertainty, so to secure those lower interest rates, borrowers are subjected to higher credit score qualifications (700 or higher per JP Morgan Chase), the temporary shelving of some loan programs (no new jumbo loans per Wells Fargo) and higher down payments (at least 20 percent). Other criteria lenders use to limit risk includes lower loan-to-value ratios and higher income-to-debt ratios from borrowers.

Yet, despite a rocky economy, June mortgage applications were up a whopping 13 percent over the previous year. Freddie Mac forecasts that interest rates will remain at or near record lows and that housing prices will moderate throughout 2021.

So, what does this mean to you, the homebuyer or homeowner? If you have good credit, steady employment, and a sizable down-payment, you’re in great shape to get or refinance a mortgage loan. In other words, nothing’s changed except tighter qualifications for higher-risk borrowers.