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Hello,

The housing and Florida home mortgage market continues to change on an almost daily basis. Our Florida home mortgage practice stays on top of the changes to insure that the mortgage solution we put together for you is indeed the best package available for you. In fact as Florida home mortgage planners our solutions are highly customized as there is no such thing as one size fits all when it comes to a Florida home mortgage.

Due to current market conditions, our practice has been in high demand. We appreciate your patience and understanding as we work diligently to provide all clients with the expert solutions they have come to expect from our practice.

The expertise of your lender can either cost or save you thousands of dollars. I look forward to personally working with you, so please send me your name and contact information and I’ll gladly follow up with you. After all, the best rate on the wrong mortgage is still a bad deal.

Warm Regards,

Edgar DeJesus, NMLS#230414
Chairman, CEO & Certified Mortgage Planner

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Americans Believe Real Estate is Best Long-Term Investment

Americans Believe Real Estate is Best Long-Term Investment | Simplifying The Market

Americans Believe Real Estate is Best Long-Term Investment

According to Bankrate’s latest Financial Security Index Poll, Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.

Bankrate asked Americans to answer the following question:

“Which would be the best way to invest money you did not need for more than 10 years?”

Real Estate came in as the top choice with 25% of all respondents, while cash investments (such as savings accounts and CD’s) came in second with 23%. The chart below shows the full results:

Americans Believe Real Estate is Best Long-Term Investment | Simplifying The Market

Sterling White, co-founder of Holdfolio, gave one reason as to why real estate may have ranked so high.

“Houses are tangible. You can physically see and feel the product. So you know where your money is going.”

July’s poll also found that for the “26th consecutive month, Americans’ sense of financial well-being improved when taking into account debt, savings, net worth, job security, and overall financial situation.”

Bottom Line

There are several reasons, both financial and non-financial, as to why homeownership makes sense. It is nice to see that Americans have returned to a belief in homeownership as the best investment.

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Thinking of Selling? The Market Needs Your Listing!!

Thinking of Selling? The Market Needs Your Listing!! | Simplifying The MarketThe housing market is really heating up and buyer demand is dramatically increasing as we enter the spring season. However, one challenge to the current market is a major shortage of inventory. Below are a few comments made in the last month by industry experts.

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Mortgage Rates Decline Again

Lowest mortgage rates in 3 years

MORTGAGE RATES DECLINE (AGAIN)

Mortgage rates went down in the first quarter of 2016 as investors drove up the price of mortgage bonds (see chart).  Mortgage pricing gets better when bond prices go up.  The first run-up in bond prices was caused by global growth worries and a “flight to quality” in the financial markets. Investors started buying government bonds on fears that an economic slowdown in China would spill over into the rest of the world.  There were also other fear factors at play in the markets, and government bond yields remain low to this day.  Mortgage bonds look very attractive by comparison because the yield on mortgage bonds is higher than the yield on government bonds.

The second factor that caused mortgage pricing to improve, was the series of recent statements made by the Fed and also comments made by Fed Chair Janet Yellen. The Fed has indicated that they will continue their mortgage bond buying program until the Fed Funds rate is in the 1.5 – 2% range.  The recent Fed statements and Janet Yellen’s comments seem to indicate that this is not likely to occur until sometime in late 2017.  The Fed is the largest buyer of mortgage bonds in the market.  Bond prices rallied (and mortgage pricing improved) once the market got wind of the fact that the Fed’s bond-buying program is likely to continue until late 2017.

All that being said, we shouldn’t get too comfortable that mortgage pricing will remain as good as it is right now. There are only a few instances in the past 18 months where mortgage pricing has been this good.  The last time this happened, bond prices fell off a cliff and mortgage pricing got worse very quickly.  At the moment, bond investors are concerned with the “pre-payment risk” of borrowers refinancing their higher-rate mortgages.  This may put a damper on mortgage pricing moving forward. 

Contact me for further information about current market conditions, and what they may mean for your situation.

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Buying a Home is 36% Less Expensive Than Renting Nationwide!

In the latest Rent vs. Buy Reportfrom Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers actually show that the range is an average of 5% less expensive in Orange County (CA) all the way up to 46% in Houston (TX), and 36% Nationwide!

Other interesting findings in the report include:

  • Interest rates have remained low and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.
  • Some markets may tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
  • Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to discuss the best course of action to get you into your dream home!

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If You Are Thinking of Selling, Now Is The Time

If you thought about selling your house this year, now may be the time to do it. The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market.

Jonathan Smoke, the Chief Economist of realtor.com, in a recent article revealed that:

“Would-be buyers face a dilemma: There will be more homes on the market over each week of the next three to four months, but there will also be even more prospective buyers. We are entering the busiest season of home buying with the lowest amount of inventory in three years. To be competitive, buyers should get pre-approved for a mortgage and be ready to act quickly if they find a home that meets their needs.”

Smoke goes on to say:

“Listings are growing as they normally do this time of the year, but because demand has been growing faster than supply, homes are selling faster. So the monthly trend is the normal seasonal pattern, but the year-over-year decline is reflective of demand being stronger than supply for more than a year, which is resulting in fewer homes available and faster-moving inventory.”

In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction including the inspection, appraisal and financing contingencies.

Bottom Line

As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.

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Vacation Home Sales Reach 2nd Highest Mark Since 2006 [INFOGRAPHIC]

Vacation Home Sales Reach 2nd Highest Mark Since 2006 [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • 58% of vacation homes purchased were single family homes.
  • 51% of vacation homes that were purchased were found online.
  • The median price of a vacation home is up 28% from 2014.
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Vacation Home Sales: Sales Down, Prices Up

The National Association of Realtors recently released their 2016 Investment and Vacation Home Buyers Survey. The survey revealed many characteristics of both vacation home purchasers and investors. Today, we want to concentrate on the vacation real estate market.

The survey found that vacation home sales last year declined to an estimated 920,000, down 18.5% from their most recent peak level of 1.13 million in 2014. However, this is still the second highest number of vacation sales since 2006.

Vacation Sales: Sales Down, Prices Up | Simplifying The Market

Lawrence Yun, NAR’s chief economist explained:

“The expanding pool of buyers amidst a dwindling number of bargain-priced properties led to tighter supply and fewer sales and caused the price of vacation homes to rise. Furthermore, the turbulence that hit the financial markets the second half of the year likely seized some would-be buyers’ available cash.”

As Yun mentioned, the sales price of vacation homes rose in 2015:

Vacation Sales: Sales Down, Prices Up | Simplifying The Market

Tomorrow, we will be providing an infographic that will highlight the other findings about vacation home sales from the survey, and in two weeks, we will report on the investor side of NAR’s survey.

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The Top Reasons Why Americans Buy Homes

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The Top Reasons Why Americans Buy Homes| Simplifying The MarketLast week, the inaugural “Homebuyer Insights Report” was released by the Bank of America. The report revealed the reasons why consumers purchase homes and what their feelings are regarding homeownership.

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Over Half of Americans Planning on Buying in the Next 5 Years

According to the BMO Harris Bank Home Buying Report, 52% of Americans say they are likely to buy a home in the next five years. Americans surveyed for the report said that they would be willing to pay an average of $296,000 for a home and would average a 21% down payment. The report also included other interesting revelations.

Those Looking to Buy

  • 74% of those looking to buy a new home will consult with a real estate agent
  • 59% said they will visit online real estate websites
  • 37% will seek recommendations from friends and family
  • 78% plan to get pre-approved before seriously searching for a home

Those Who Already Own

  • 75% of current homeowners set a budget before looking for a home, and 16% ended up spending less while 13% went over their budget.
  • 63% of American homeowners spent under six months looking for a new home before they made a purchase.
  • 8% bought their home without participating in an active real estate search – or even any plan to buy at all – because a specific property caught their attention.

The last point is very interesting: Of those who purchased a home, 8% bought “without any plan to buy at all”. A property caught their attention and they acted on it.

Why Are More People Not Planning Their Next Move?

Why are people that are considering a move not putting their home search to a plan, and instead, buying only when a property catches their attention? An article by Fannie Mae reveals evidence that a large number of homeowners are dramatically underestimating the equity they have in their current home. The report explains that:

“Homeowners may be underestimating their home equity. In particular, if homeowners believe that large down payments are now required to purchase a home, then widespread, large underestimates of their home equity could be deterring them from applying for mortgages, selling their homes, and buying different homes.”

Bottom Line

Let’s meet up to determine the actual equity you have in your house and to take a look at the opportunities that currently exist in the real estate market. This may be the perfect time to move-up, move-down or buy that vacation home your family has always wanted.

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You Can Save for a Down Payment Faster Than You Think

In a study conducted by Builder.com, researchers determined that nationwide, it would take “nearly eight years” for a first-time buyer to save enough for a down payment on their dream home.

Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage of income a renter spends on housing in each state, and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.

According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state:

You Can Save for a Down Payment Faster Than You Think | Simplifying The Market

What if you only needed to save 3%?

What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states as shown in the map below.

You Can Save for a Down Payment Faster Than You Think | Simplifying The Market

Bottom Line

Whether you have just started to save for a down payment, or have been for years, you may be closer to your dream home than you think! Let’s meet up so I can help you evaluate your ability to buy today.

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More & More Singles Are Falling For Their Dream Home [INFOGRAPHIC]

Singles Are Falling For Their Dream Home | Simplifying The Market

Some Highlights:

  • 24% of all recent home buyers were single at the time of purchase.
  • 47% of single men cite the desire to own a home of their own as the primary reason to buy.
  • 18% of first-time buyers were single women.
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Review your Retirement Plan Options at Your Current Employer

 
Does your current employer offer a retirement plan? If they offer something above and beyond a 401(k), good for you!
Find out if this is a defined benefit or a defined contribution plan.
 
What’s the difference?
 
Defined benefit means you will get $X/month as a pension when you retire based on your salary and years of service. Pretty simple. They tell you the amount that you are getting.
 
Defined contribution plans mean that your employer will put in $X a year into a retirement plan on your behalf. It is usually a percentage of your salary. The difference is that they aren’t guaranteeing how much your will get at retirement. When you retire, the amount you get is based on how much they’ve added, and the performance of the account. You can choose to take a lump sum or an income stream as a pension when you retire.
 
 
Why do you need to know this? A couple of reasons… Frequently, when someone retires and they get a pension, they can elect to take a smaller pension amount and have the pension extend to their spouse after they pass away. This is great for financial planning purposes.
 
If you aren’t married and have a partner, many employers do not extend this benefit to the unmarried partner. Particularly if it’s a government agency, such as a school system, law enforcement, etc. This changes the financial planning landscape.  If you are unmarried and partnered, you might be better off to take the lump sum upon retirement instead of the pension. Or take the pension and get additional life insurance.
 
Either way, planning is a little tricky in these situations. So find out what you have and how it works.
 
Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
 
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
 
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL financial.
 
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org www.sipc.org
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