Talking Real Estate
June is National Homeownership Month | Do You Need a Jumbo Loan? | All About Biophilic Interior Design | Is It Cheaper to Rent or Buy?
June is National Homeownership Month
National Homeownership Month is celebrated in June, the kickoff of the summer homebuying season. Homeownership is widely considered the foundation of civil stability and familial happiness – the American Dream.
The National Association of REALTORS (NAR) believes homeownership gives families more financial security, a better lifestyle, and stronger communities through supporting businesses, schools, and services making it a powerful financial, psychological and physical stake in local neighborhoods and communities.
Whenever a homeowner mows their lawn, shops at the local grocery, or joins the PTA of their children’s school, they’re creating a more stable community. This is why homeownership is one of the most subsidized national initiatives through low-interest rates, tax incentives, and low-down-payment federally guaranteed mortgages or bank mortgage package purchases.
According to NAR, homeowners attain 46 times the personal wealth of renters because of equity ownership. They can customize their homes in a way that renters can’t – for their comfort and family needs. They contribute to their neighborhoods through home improvement, which makes them more desirable; through participation in schools, which makes them stronger; and in supporting the community.
According to Miblog.genworth.com, homeownership is at risk due to a number of factors –the pandemic, business closures and inflation. Homeownership is investing in the future. As a homeowner, you have the ability to shape your home, neighborhood and community for better or worse, simply by how you treat your home, neighbors and local businesses. The more we have responsible homeownership, the better our future looks.
Do You Need a Jumbo Loan?
For 2021, the Federal Housing Finance Agency (FHFA) which oversees Fannie Mae and Freddie Mac raised the maximum conforming loan limit for a single-family property from $510,400 in 2020 to $548,250. In high-cost areas, including parts of California, New York, Washington D.C. and others, the limit for conforming mortgage loan limits is 150% of that limit, or $822,375. You can also get a jumbo FHA loan, which follows the same limits as for conforming loans, with the exception that some counties in Hawaii, Alaska and Guam have limits as high as $1,233,550.
What if you need to borrow more? You’ll need a jumbo mortgage loan, defined as a loan that’s any amount over conforming limits. If you’re wondering whether you will need a jumbo loan to buy your next home, check conforming loan limits for your area here and FHA loan ceilings here.
What does it take to qualify? Ally.com suggests that non-conforming loans pose a higher risk to lenders. Qualification requirements can vary among lenders, but you will likely need higher credit scores, down payment and cash reserves, and you’ll pay higher interest rates and experience greater scrutiny of your financial sources.
Not all lenders provide jumbo loans, so it’s wise to shop around to get the best terms. You can also ask your Berkshire Hathaway HomeServices network professional for referrals to lenders who are experienced and willing to make jumbo loans or that offer other loan products that allow you to meet the FHFA limits for high-cost areas.
All About Biophilic Interior Design
Architects and interior designers strive to improve living spaces so their clients will be happier and more productive. One increasingly popular approach is called biophilic design, which “seeks to connect occupants more closely to nature,” according to Archdaily.com.
Biophilia simply describes the affinity and love humans have for the natural world and its life forms. It’s the reason we have house pets, indoor plants, and install skylights, wood floors and granite countertops in our homes. We screen windows and doors to let in the fresh air. We are willing to pay much more money for homes with views of the ocean or lake, the mountains, or park-like landscapes.
Humans spend 90% of their time indoors, so we’re happier when we can bring the outdoors inside, which explains the booming houseplant industry, reports Fastcompany.com. We’re simply happier, more focused, and healthier in a biophilic environment, and there are numerous studies confirm the direct positive effect nature has on our well-being.
So how can you incorporate biophilic design into your environment? LifestyleAsia.com suggests that objects, materials, textures, colors, shapes, and sequences that mimic nature will stimulate visual, auditory, haptic, and olfactory connections to the natural world. Start with plenty of natural light. Add a water feature, such as a small entry fountain. Use walls to hang landscape paintings or botanical wallpaper. Add fragrant plants, flowers and candles with pine, lavender, and other soothing scents.
You’ll soon see that furniture, art, décor and architecture can work together to create a peaceful haven.
Is It Cheaper to Rent or Buy?
Home prices are going up, but in some areas of the country, it may be cheaper for you to save money for your own home by renting another year. According to Move.com, renters can save thousands on a lease in the nation’s largest tech hubs, compared to pre-pandemic prices. In February 2021, the U.S. median rent, which is calculated by averaging the median rent of the 50 largest metros, was up 0.6% to $1,452, well below its pre-COVID growth rate of 3.2%.
Meanwhile, the median mortgage payment, reports TheBalance.com, was $1,100 in 2020. Monthly mortgage payments are based on the loan amount, interest rate, and the term, typically 30 years.
Renters are required to pay hefty security deposits that are often not refundable. Landlords can raise rents when your lease expires. Homeowners make down payments which reduce the amount of money they need to borrow to purchase a home; they pay ongoing expenses such as property taxes, homeowner’s insurance, and private mortgage insurance in many cases. However, mortgage interest and property taxes are tax-deductible, if you file long form.
TheMortgageReports.com suggests that buying is a long-term investment, with prices going up over time. The amortization of your monthly mortgage means that at first little money goes to reduce the principal and the majority goes to pay interest to the lender. The longer you own, that slowly reverses until you’re paying mostly principal and little interest.
Over time, you’ll own something, whereas with renting, you get no ownership stake.