Which homes need major remodeling?
Rental property agents, real estate agents, and property managers across the country have begun calling on homebuyers to consider renovations that could be necessary as they wait for new mortgage rates to go into effect.
The National Association of Realtors, which represents about 1.5 million homebuyer agents, said it expects the new rates to make up a large part of the total cost of the home and will be “critical” to making sure a home is suitable for the new buyer.
In the first quarter of this year, the average annual rent for a one-bedroom apartment rose by $400, while the average one- and two-bedroom rents rose by about $900, according to the association.
For homes that are more than 50 years old, that increase was $1,000, the association said.
Home owners have the option of moving into their new home and making the renovation, but that process is more time consuming, and many owners don’t want to wait that long.
“It takes a lot of time and effort, and I’m very worried about that,” said Jim Pohl, president of Pohl & Schwartz in Fort Worth, Texas.
“I think we’ve seen a lot more home buyers look at the costs and the labor costs of this process, and now they are really getting serious about it.”
Many homeowners have also been paying attention to what happens to their existing mortgages as a result of the new rate hikes.
The NAR has been pushing for mortgage rates of about 4 percent to 4.25 percent to be lowered, as it wants to see that rate go down as quickly as possible, according, according the association’s website.
While rates could drop significantly from 4.00 percent to 3.85 percent, it said that rates could also be lower.
The association said it’s encouraging homeowners to check on their mortgage statements and consider how they would like their mortgage rates impacted.
“Some people may want to move into a new home sooner and lower the monthly payments.
Others may want a smaller down payment and be able to refinance their mortgage early if needed,” the website said.
“For those with an existing mortgage, there are also several options that could make the mortgage more affordable,” it said.
It’s also important to consider that if a homeowner makes more than their mortgage, they could also have to pay a penalty for that home and possibly their home equity.
If they’re buying a home, they should look at that as well, the website stated.
Homeowners in some areas may be able go ahead and make a down payment, which could make it easier to refortify their mortgage if it goes underwater.
In some states, people can refinance up to $2,000 down in a single transaction, and in some states they can make up to 3 percent of their mortgage down.
The website said that it’s important to understand that the amount you pay will be lower if you refinance with an individual or household member.
“A lower down payment means you can refortification more quickly, which is what you want to do if you have a small down payment,” said the NAR.
“The higher the down payment you make, the lower your monthly payment will be, and if you’re paying off a loan, you should be thinking about refinancing or lowering your monthly payments,” it continued.
Many homeowners are still hesitant about making the big-ticket renovations because of the financial impact it could have on their homes, but the NAPRA said it believes the mortgage industry is taking the issue seriously.
“This is just the tip of the iceberg.
It is a major issue that affects all Americans,” said NAR president Robert G. Miller.
“We are confident that these changes will help make our communities more affordable and that we will see an increase in homebuyering as a consequence.”
Homeowners are also concerned about the effect of these new rates on their property taxes.
In most states, homeowners pay property taxes at the same rate as they would in the federal government, the NART report noted.
But in some places, like California, where rates are going up, property taxes could rise to as much as 10 percent.
In a letter to the Federal Reserve, the National Association for Realtor wrote that it was “aware that property taxes may be higher in some communities.”
“Property tax increases are a major reason that a homeowner might decide to refi [refinance] or sell their home and the property may be taxed as a rental property, which would increase your property taxes, too,” the letter said.
But it’s not just homeowners who are concerned about their taxes.
A recent report from the Pew Research Center found that the homeownership rate in some parts of the country has fallen from 74 percent in 1996 to 55 percent in 2012.
According to Pew, homeownership in some of the most affluent areas of the United States, including New York, Los Angeles, San Francisco, and Boston, has been declining since the 1980s. It said