Archives for October 2014

Cut YEARS off of your mortgage payments with these 8 easy steps

Some are better off using the money elsewhere, but extra payments and refinancing can do a number on your mortgage.

The mortgage burning party may have gone the way of the rotary phone, but that doesn’t mean Americans don’t own their homes free and clear anymore. In fact, about 34 percent of homeowners in the U.S. no longer have a mortgage, according to U.S. Census data.

The stories of people who pay off 30-year mortgages after 30 years in the same home are indeed rarer than they once were. But the recent foreclosure crisis did serve as an incentive for homeowners to pay off their loans sooner rather than later – and some have actually given it a try.

Jackie Beck, creator of the Pay Off Debt app, and her husband paid their $95,000 home mortgage in less than three years. To finish off the mortgage, they repeated the same tactics they had used to vanquish their credit card, student loan and auto loan debt. The secret to their success? They started earning more money but didn’t increase their expenses, plus they were careful not to borrow any more money.

For Beck and her husband, the major benefit was having more money for travel and other goals. Not having to make a house payment also meant that Beck could quit her full-time job and focus on marketing her app and running her own The Debt Myth website business.

While living mortgage-free may sound like an enviable goal, paying off your mortgage early isn’t always the best use of your money, says Todd Tresidder, a financial coach and author who publishes the website FinancialMentor.com. He was asked about the merits of paying off a mortgage early so many times by his readers and clients that he wrote up an exhaustive 5,200-word article, with charts, covering all the considerations.

The 140-character Twitter version: You might be better off putting your extra cash elsewhere, but the emotional payoff of being debt-free matters.

“The intuitive response is to get out of debt. We all want the security of owning our castle free and clear with one less expense to deal with. The prospect of making monthly payments for the next 30 years is antithetical to freedom,” Tresidder wrote. “However, there are times when intuition and finance disagree. … The correct answer is not cookie-cutter but must be custom fitted to your personal financial situation.”

If you have high-interest credit card or student loan debt, you’re much better off paying those off before making extra mortgage payments. Saving for your child’s college education and funding your 401(k) at least to the point of getting the maximum employer match – and maybe more – may also be more important than getting ahead on your mortgage.

Beyond that, you want to make sure you have enough cash on hand for emergencies because drawing from your home equity isn’t always easy. If your mortgage is underwater, or if you anticipate losing your house to foreclosure or short sale, making extra mortgage payments is just throwing money away.

The harder calculation is whether you’re better off investing your money or applying it toward your mortgage. When the market is strong (for whatever investment you’re making), you will likely earn much more on your investments than you are paying in interest on your mortgage. But if your investments lose money, you would have been better off applying that cash to your mortgage.

Many people aim to pay off their mortgages before they retire, but even that may not be the best move in all circumstances.

Having a mortgage does provide a tax break, but it’s not as good a benefit as many people think. According to an analysis of 2012 tax data by The Pew Charitable Trusts, just under 24 percent of tax filers claim the deduction. Many homeowners, even those who itemize, often find they do better on their taxes with the standard deduction.

For those homeowners who are fully funding their retirement accounts, are free of high-interest debt and have enough cash socked away for other life goals, here are eight simple ways to pay off your mortgage early.

Add something to every month’s payment. The advantage to extra payments is that all that money goes toward principal. Early in a mortgage, most of your regular payment goes toward interest. According to calculations by Bankrate.com, if you added an extra $100 to your payment of a new $100,000 30-year mortgage at 4.5 percent interest, you’d pay off the mortgage eight and a half years early and save more than $26,300 in interest.

Make a payment every two weeks. There are companies that volunteer to set this up for you, for a fee, but you can do it yourself for nothing. You’re effectively making a full extra payment each year. Paying half your mortgage payment every two weeks, on that same $100,000, 30-year mortgage at 4.5 percent, would cut just under 5.5 years off the term and save roughly $14,000, according to a calculator at The Mortgage Professor site run by Jack Guttentag. Splitting your mortgage payment into two pieces produces minimal savings.

Make extra payments whenever you can. Beck and her husband started by paying $35 extra per month, but then began making additional payments, at one point so eager to pay off the loan that they made eight payments in a month.

Make one extra payment a year. This provides about the same savings as making half a payment every two weeks. When you make the payment isn’t important. You could make it at the end of the year or wait until you get a tax refund or a bonus.

Refinance your mortgage to a lower rate, and keep making the higher payment. The amount this will save depends on the exact figures, but it should shave years off your mortgage and save you thousands in interest.

Refinance your mortgage to a shorter term. This cuts the amount of interest you pay significantly as well as getting you out of debt sooner.

Contribute funds from another source. Designate money from a bonus, odd jobs or freelance work toward paying of the mortgage. If your income is variable, rather than making regular additional payments toward principal, make one big payment when you can.

Cut expenses and put the savings toward your mortgage. Change to a cheaper cellphone plan, cut the cable cord or otherwise cut living expenses and devote that extra money to extra mortgage payments. Living a frugal lifestyle may be difficult in the moment, but it’s worth the struggle if your ultimate goal is to be debt-free.

 Tatyana Sturm and The Storck Team have helped many buyers in Southeast Aurora,Centennial, and Parker with the purchase of their condo.  Whether you are a first time home buyer, down-sizing, or prefer the community style of living that a condo has to offer The Storck Team would love to show you the hottest listings in our market.  The Storck Teamlives, works, and plays here and our community is our true passion.  Call or text (720) 350-5909.

Selling your home in the fall market?

2014 Homes for SaleIf you are thinking of putting your home up for sale in this fall market but are concerned about the cooler weather and the buyers being all moved in this summer, THINK AGAIN!  Denver and surrounding areas are still involved in a “seller’s market” and the primary reason…..  INVENTORIES ARE LOW.   Month to date with October coming to a close, we have the lowest number of homes for sale this year at just 1,305 listings in Southeast Aurora.  The buyers are still out there, but their inventories are becoming less and less.  This means for the savvy home seller LESS COMPETITION!

Tatyana Sturm and The Storck Team have specialized in relocation real estate within the AuroraCentennial, and Parker communities for the last 10 years.  Our true pride is our community; The Storck Team lives, works, and raises our families in Southeast Aurora.  Call or text Tatyana Sturm with The Storck Team for all of your South Metro Denver real estate needs at (720) 350-5909.

Buyers can save on their closing costs with the 5 simple steps!

When you are purchasing a property, there are costs that must be covered before you can become the owner. These are known as closing costs and include things like application, loan origination, appraisal, home inspection, credit report, attorney, appraisal and survey fees. As the buyer it is usually your responsibility to cover these fees and costs.

The typical closing costs are 2% to 5% of the price of the home. That can be a large difference. On a $350,000 home that is the difference between $7,000 and $17,500. To find out what your closing costs will be you can use an online calculator. But these payments are often a key point of negotiation and the fees will vary by lender, so there are plenty of things you can do to save money on closing costs. Here are some tips.

1. Shop around

Mortgage rates are not the only costs you need to search around for when buying a home. It’s a good idea to get quotes from several third-party services for things like home inspections, surveys, attorneys and title insurance. Mortgage lenders will include a fee for these services on the good faith estimate, but you can ask for the opportunity to find cheaper options. This can be a great way to save money.

MORTGAGE LENDERS: How to find the right one for you

CREDIT REPORT: Better check it before buying a home

MORTGAGE LOANS: How the approval process works

2. Know your locale

Location is very important in terms of the closing costs associated with your loan. As mentioned above, the amount you will be expected to pay varies greatly. While some may pay around 2% to 3% of a home’s price, some high-tax areas of the country carry closing costs around 5% or 6%. Different states have very different closing costs — some even carrying a flat fee for title insurance. This is why it can be helpful to ask around in your community or try an online tool to estimate closing costs instead of just assuming a number.

3. Negotiate with the seller

Take notice of cost estimates and work toward the best deal you can manage. The payment of any and all closing costs should be an important negotiation point between buyer and seller from the start. Depending on market conditions and the seller’s motivation or timetable, you may be able to arrange that the seller pays some or all of these fees.

4. Time the closing well

If you close toward the end of the month, you can avoid prepaid interest charges. Your lender assesses charges to cover the time between the settlement date and the end of the month to compensate the lender before you will be paying the “full” interest and principal payment the following month. Whether substantial or nominal, this cost can be significantly reduced by planning ahead and scheduling your closing toward the end of the month.

5. Perform a final check

It’s important to review closing cost forms carefully. If the fees have changed from the good faith estimate to the official documents that arrive three business days before your closing, ask your lender for an explanation. If you notice new or significantly higher closing costs, it’s a good idea to investigate and consult with a real estate attorney about your options.

Don’t get intimidated if this is a new process — with enough information and negotiation skills on your side, it can be possible to cut back on closing costs. Even taking into account these money-saving tactics, it’s important to include closing costs into your calculation of how much house you can afford.

Tatyana Sturm and The Storck Team have helped many buyers in Southeast Aurora,Centennial, and Parker with the purchase of their condo.  Whether you are a first time home buyer, down-sizing, or prefer the community style of living that a condo has to offer The Storck Team would love to show you the hottest listings in our market.  The Storck Team lives, works, and plays here and our community is our true passion.  Call or text (720) 350-5909.

Short Sale Home for Sale Brighton, CO!

14881 E 117th Ave14881 East 117th Avenue – This Brighton home has verbal short sale approval at just $220,0000 which is priced to move quickly in Buffalo Run.  Located close to parks and schools, this gem is MOVE IN READY making it a rare short sale home.  Don’t let this one pass you by, great starter home for you first time home buyers!!  Call or text The Storck Team at (720) 350-5909 to schedule your private showing.

Tatyana Sturm and The Storck Team have been honored to serve the Denver and surrounding areas in relocation real estate for the last 10 years as one of Denver’s leading short sale specialists.  If you or someone you know is facing foreclosure, make sure you are educated on your options.  You might have equity or money in your home that you are unaware of in this ever changing real estate market.  Call or text The Storck Team at (720) 350-5909.

What is a high priority when considering the purchase of a condo?

Condos were once thought of as homes that attracted singles or couples, often without children. But in today’s market, condos are growing increasingly attractive to buyers with families of all sizes.

Condos can be an excellent choice for the right buyer. Here are a few things that you should considered before purchasing a condo. Most buyers start with the condo itself. That may be a good place to begin but, before they buy, buyers should also consider other factors outside of the condo.

Some developers are building condos that have a look and feel like single-family homes. These modern condos have great rooms and open, flowing floor plans that look and feel like a single-family home rather than an apartment or condo.

One of the major attractions of condos is the low maintenance. The community area is maintained by an association funded by the dues that homeowners pay into it.

That’s why buyers’ first consideration should be to explore the development and make sure they like the look and feel of the complex and surrounding community. There are codes and restrictions, often referred to as CC&Rs (covenants, codes, and restrictions) that buyers will have to abide by once they purchase a condo. Buyers should ask to review them before making an offer to purchase a condo. These regulations help ensure that the community maintains its general appearance and any necessary repairs of the external areas.  

Asking yourself if you belong in an HOA covenanted community is a whole separate set of questions.  HOA’s really work for some people, and not so well for others.  Make certain that you familiarize yourself with not only the rules and regulations but also the financial stability of the association itself.  

Review the association’s budget. It may be necessary to get the seller to provide this information because it may not be released to a non-owner who is only a potential buyer. However, in considering buying into a development, it’s almost like going into business with the neighbors in the complex. It’s important to make sure that the association is running properly and has enough of a reserve for necessary expenses and maintenance. The budget and CC&Rs will give an idea about how stable the association is and if increases in the homeowners’ association dues are likely each year.

Find out how many owners in the development are delinquent on their dues. A condo complex that has a high level of delinquencies can cause problems for buyers when it comes time to get a loan or sell the condo. Some loans are not approved if delinquency rates are higher than 15 percent.  

Another avenue to research is how many renters are located in the complex.  While owning a rental property is a great investment, it can bring down the property’s value if the ratio of renters is too high in comparison to that of owner occupied units.  

Review the minutes from the association’s board meetings. They will reveal the day-to-day issues that occur each month and give an indication of how the development is run. For instance, lots of complaints and filings about noisy residents, loud parties, or dog droppings on the lawn reveal potential problems with neighbors. The minutes will also reveal if the development is engaged in any lawsuits.

Understand what your responsibilities are for the upkeep of the condo. Find out what the association takes care of and what the homeowners have to maintain. Look at the association’s property management team and see how many times the association has changed management companies. Find out why. This will may reveal how responsive the association will be should residents need its assistance.

Ultimately, buyers need to ensure that when they purchase a condo they’re not buying into any legal battles the association is in the middle of and that they will be able to live in their condo the way they want. Study the CC&Rs and do due diligence before buying.

Tatyana Sturm and The Storck Team have helped many buyers in Southeast Aurora, Centennial, and Parker with the purchase of their condo.  Whether you are a first time home buyer, down-sizing, or prefer the community style of living that a condo has to offer The Storck Team would love to show you the hottest listings in our market.  The Storck Team lives, works, and plays here and our community is our true passion.  Call or text (720) 350-5909.


Tatyana:
Aaron: 720-273-7419
Exit Realty


,


RSS Facebook Twitter LinkedIn


© Copyright All Rights Reserved 2018

Exit Realty