Talking Real Estate
Featured Articles: What Post-COVID Buyers Seek in a Home | Making Your Gutters Usefully Beautiful | How Fast Does Equity Build on Your Home?
What Post-COVID Buyers Seek in a Home
Do homebuyers want the same things in their next home as they did before the COVID pandemic? In some ways, yes, and in others, no. According to the latest summer Realtor.com survey, post-COVID homebuyers are willing to spend more money on a home, have saved more money toward a down payment as they sheltered in place, and plan to buy a home sooner than they did in the spring of 2020.
A greater majority of homebuyers surveyed also said they want a three-bedroom home, with two bathrooms, an updated kitchen, and a garage. In a comparison of surveys conducted in both the spring and summer, a notable share of homebuyers wanting move-in ready homes has gone up 10 percent and six percent more buyers are willing to take on longer commutes to get the home they want. In addition, low mortgage interest rates, combined with additional personal savings, are making conditions attractive for them to buy a larger home in a nicer neighborhood.
Six percent fewer homebuyers plan to put more earnest money down, plan to offer above listing price, or offer all cash. Three percent plan to put down more than a 20 percent down-payment.
The trend in these numbers appears to point toward less willingness on the part of homebuyers to compromise on what they want. They may spend more for a home, but plan to preserve as much cash as possible. Homebuyers may be planning to stay in their next homes for a longer period.
Making Gutters Usefully Beautiful
One pleasure in buying an older home is the beauty of mature trees on your property and their dazzling display of fall colors when the weather turns cool. But, what happens to the leaves when they fall?
What you don’t want is leaves clogging your gutters, preventing them doing their most important job - to route roof water away from vulnerable areas of the home’s exterior and garden. If your new home doesn’t have gutters or needs new ones, consider investing in them as an important and elegant part of your home’s curb appeal.
Today’s gutters are far from the boring half-pipe gullies of the past. You can choose gutters in an array of sizes, materials and designs that add style and value to your home. A general rule is the more durable and valuable the material, the higher the cost, but the longer it will last, according to Bankrate.com.
Vinyl is the most economical, but least durable. Aluminum is more durable but can crack like vinyl, but not as quickly. Some lower cost options may be available in faux-metal finishes. If your home is surrounded by trees, or your area experiences strong winds, choose steel, zinc or copper which can carry much more weight and last a lifetime.
A popular choice for gutters is the K-style which has a staircase design that resembles crown molding, so your home appears finished in finer detail from the street. Choose gutters with leaf and debris guards to minimize home maintenance chores.
How Fast Does Equity Build During Homeownership?
Building equity in your home is like a savings account – the more you put toward it, the better. Your home’s equity grows with each mortgage payment you make and with time.
According to BankofAmerica.com, you can calculate your equity based on current appraised value less any mortgages tied to your home. If your home is appraised at $400,000 and you owe $120,000, then your equity is $280,000. But that doesn’t mean you have savings of $280K; it just means that you have a general idea of how much your home will yield should you sell it at that moment, less closing costs, of course.
Lenders consider equity differently. You can begin building equity the moment you purchase your home with your down-payment. ($400K – 20% = $320K) Your loan amount would be $320K and the equity in your home would be $80,000. You can increase your equity by paying your mortgage regularly and paying a little extra every month, which speeds up the amortization of your loan.
To approve a home improvement loan or to determine whether to eliminate private mortgage insurance, lenders take the appraised amount and divide it by your loan balance to get a percentage of how much equity you have. Divide your current loan balance by your home’s appraised value, then multiply by 100. ($120K ÷ $400K = 35%) That means you own 65% of your home.
These numbers are theoretical until you sell your home. Meanwhile, watch your savings grow on your monthly mortgage statement!