Join bloggers Amanda and Corey Hendrix as their family embarks on a new homebuying journey. From previously living in older homes that require plenty of love (and renovations), they’re looking at opening up their option into new build territory.
My wife and I are looking to retire in three years from New Jersey to Florida or a Florida-type atmosphere â warm weather, no snow!
We will be getting around $5,000 from Social Security monthly and will have a little over $1 million spread among savings/401(k)/house equity. We want to buy a condo for about $250,000 that has all the extras like pools, restaurants, social activities and near the beach.
Can you make any suggestions?
With 1,350 miles of coastline in Florida alone, never mind the rest of the South, you have many possibilities for your retirement. But as you can imagine, properties closest to the beach are more expensive, so ânear the beachâ may involve some compromise.
I started my search with Realtor.com (which, like MarketWatch, is owned by News Corp.) and its picks of affordable beach communities, but didnât stick to it exclusively.
My three suggestions are just a starting point. No place is perfect, not every development will have all the amenities you want, and every town has its own personality, so you may want to think about what else is important to you. You also may want to consider gated communities and townhomes, not just multistory condominium buildings.
As you narrow down your list, I recommend you visit at least twice â once in the winter to experience the crowds in high season and once in the summer to understandÂ what southern humidity is like. Itâs worse than in New Jersey.
Think about how you will build your new social network, even with all the social amenities in your condo building. Donât rule out the local senior center or the townâs recreation department.
Consider renting for the first year to test it out to make sure youâve picked the right area.
Then there are the money questions. The last thing you need is a surprise.
Youâll have condo fees; they can be quite high, particularly in a high-rise building along the beach. What do they cover and what donât they cover? How much have fees been rising over, say, the past 10 years? How does the board budget for bigger repairs? More broadly, are you OK with the condo associationâs rules?
Ask about the cost of both flood and wind insurance given that the southern coastline is regularly threatened with hurricanes. Thatâs on top of homeownerâs insurance. Or are you far enough inland that you can get away without them?
Walk into the tax assessorâs office to try for a more accurate tax assessment than your real-estate agent may give you. And since this would be your primary residence, ask about the homestead exemption.
And donât forget that youâre trading your New Jersey heating bill for more months of air conditioning; what will that cost?
Finally, three years isnât that far away.Â Start decluttering now. Thatâs hard work, too.
Here are three coastal towns to get you started on your search:
This town of nearly 25,000 on the Gulf Coast is part of the Sarasota metro area, deemed by U.S. News & World Report to beÂ the best area in the U.S. to retire. Venice is 25 miles south of Sarasota and its big-city amenities; itâs 60 miles north of Fort Myers, the runner-up in the U.S. News listing.
It also made Realtor.comâs list ofÂ affordable beach towns for 2020.
This is a retiree haven â 62% of residents are 65 and over, according to Census Bureau data.
While you can always travel to the nearby big cities, when you want to stay local, see whatâs on at theÂ Venice Performing Arts CenterÂ and theÂ Venice Theatre. Walk or bicycle along the 10.7-mileÂ Legacy TrailÂ toward Sarasota and the connecting 8.6-mileÂ Venetian Waterway Park TrailÂ to the south. The latter will lead you toÂ highly ratedCaspersen Beach.
Temperature-wise, youâll have an average high of 72 in January (with overnight lows averaging 51) and an average high of 92 in August (with an overnight low of 74).
HereâsÂ what is on the market right now, using Realtor.com listings.
Boynton Beach, Florida
On the opposite side of the state, smack between Palm Beach and Boca Raton, is this city of about 80,000 people,Â plenty of whom are from the tri-state area. More than one in five are 65 or older.
Weather is similar to that in Venice: an average high of 73 in January and 85 in August.
Boynton Beach is in the middle of developing theÂ 16-acre Town Square projectÂ that will include a cultural center and residential options, among other things. Still, this is an area where one town bleeds into the next, so whatever you donât find in Boynton Beach, youâll probably find next door.
At the western edge of town is theÂ Arthur R. Marshall Loxahatchee National Wildlife Refuge, 145,000 acres of northern Everglades and cypress swamp. TheÂ Green Cay Nature CenterÂ is another natural attraction.
You can also hopÂ Tri-Rail, a commuter train line that runs from West Palm Beach to the Miami airport with a stop in Boynton Beach, when you want to go elsewhere. The fancier Brightline train isÂ adding a stop in Boca RatonÂ to its existing trio of West Palm Beach, Fort Lauderdale and Miami; the current plan is for a mid-2022 opening.
This city has many amenity-laden retirement communities, and the median listing price for condos and townhouses fit your budget, according to Realtor.com data. HereâsÂ whatâs on the market now.
Myrtle Beach, South Carolina
If youâre ready to look beyond Florida, Myrtle Beach, S.C., with nearly 35,000 people, made Realtor.comâsÂ 2018Â andÂ 2019Â lists of affordable beach towns, and Murrells Inlet, just to the south and home to just under 10,000 people, made the 2020 list. The broader Myrtle Beach area, known as the Grand Strand, extends for 60 miles along the coast.
Summer temperatures in Myrtle Beach are a touch cooler than Florida; an average high of 88 in July, with lows averaging 74.
A word of warning: In the winter, average overnight lows get down to around 40, and average daytime highs reach the upper 50s. Is that acceptable, or too cold?
Myrtle Beach boasts of its low property taxes, especially when combined with the stateâs homestead exemption. While you may think of the city as a vacation destination, 20% of residents are 65 or older. (Nearly 32% of Murrells Inlet residents are seniors.)
Hereâs whatâs for sale now inÂ Myrtle BeachÂ and inÂ Murrells Inlet.
The post We Want to Retire to Florida or a Florida-Type Atmosphere and Buy a Condo With Lots of Amenities for $250,000âWhere Should We Go? appeared first on Real Estate News & Insights | realtor.comÂ®.
Granted, this year, the coronavirus pandemic prompted the Internal Revenue Service to extend the usual April 15 deadline to July 15. That might have seemed like plenty of timeâand yet here we are, with a mere two weeks to go and a filing window that’s closing fast.
We get it. Maybe you’re a procrastinator. Or maybe you’re a homeowner who, rather than taking the easy-peasy standard deduction, generally tries to save a bundle by itemizing your deductions instead.
Whatever your reason, if you’ve put off filing your taxes until now, don’t panic! You still have options.
Here are three last-minute tax tips for homeowners that could save you plenty of money, headaches, and more.
Tip No. 1: Grab FormÂ 1098
Form 1098, or the Mortgage Interest Statement, is sort of like your home’s W-2: a one-stop shop for your possibly two biggest tax breaks.
Mortgage interest:Â “The biggest real estate tax deduction for most people will be the interest on their home loan,” according toÂ Patrick O’Connor of O’Connor and Associates. Single people can deduct the full interest up to $500,000; for married couples filing jointly, the limit is $1 million if you purchased a house before Dec. 15, 2017. If you bought a home after that date, you will be allowed to deduct the interest on no more than $750,000 of acquisition debtâthat’s a loan used to buy, build, or improve a main or secondary home. (Here’s more on how your mortgage interest deductionÂ can help you save on taxes.)
Property taxes: This is the second-biggest deduction for most homeowners. Just remember the total amount you can deduct is $10,000, even if you pay way moreâand that includes state and local income tax, property tax, and sales tax. (Here’s how to calculate your property taxes.)
You might be eligible for other real estateârelated deductionsÂ andÂ tax credits, but these are the biggies for most people. If you’re down to the wire on filing, you might just deduct these two and call it a day.
Just remember to make it worth your while. These numbers need to add up to more than the current standard deduction, which jumped to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly.
Tip No. 2: File an extension
If you still need more time to get your taxes together, itâs totally simple and penalty-free to file for an extension until Oct. 15. But donât get too excited; the IRS still requires you to pay your estimated tax bill by July 15, or else youâll pay interest on what you owe down the road.
The IRS makes it easy to file for an extension, either onlineÂ orÂ by mail. On the form,Â just estimate how much tax you owe. If you’re filing an extension because you need more time to figure out yourÂ itemized deductions, one easy shortcut is to just take the standard deduction nowâor the same amount you claimed last year. All in all, it’s better to overestimate what you owe, because then you won’t pay any interest. Once you file for real, anything you’ve overpaid will come back to you.
But what if you need an extension because you can’t pay your tax bill? It’s still better to file for an extension with fuzzy numbers than to not file at all.
The IRS has payment plansÂ that can help if you are short on cash.Â Just fileÂ somethingâblowing the deadline entirely will open you up to penalties as well as interest on your bill. And maybe an audit, too.
Tip No. 3: Hire someÂ help
If you make less than $69,000 a year, you qualify to use free tax prepÂ software from the IRS. Even if you make more than that, there are lots of free or low-costÂ online tax prepÂ options that should work for anyone with relatively straightforward taxes.
Of course, another option is to find yourself a good accountant.
If paying for a tax preparer sounds extravagant, keep in mind that, according to the U.S. Tax Center, the average cost of getting your taxes done is only $225. This, generally speaking, is money well-spent.
A good accountant can actually save you money by spotting deductions you might notÂ have found on your own, and helping you plan to minimize the next year’s taxes. All in all, that may add up to the best few hundred bucks you’ve ever spent!
Another timesaver: Rather than snail-mailing your accountant your tax forms, snap pictures of them on your smartphone; some apps like CamScannerÂ can do so with scanner-style quality. Accountants don’t need the originals to file.
For next year, remember to prepare
OK, so this year you waited too long and stressed yourself out. If you don’t want a repeat ordeal next year, now is also the time to mend your ways and start tax prepÂ early.Â Nobody wants to be thinking about taxes all year, of course. But as a homeowner, you can do some things to be better prepared.
So before you do any home maintenance, upgrades, or renovations, research whether there are any tax deductions you could be eligible for.
Start now, and you’ll be sitting pretty to collect on all the various tax perksÂ that come with owning a home rather than pulling out your hair at the last minute.
The post Don’t Panic! 3 Money-Saving, Last-Minute Tax Tips for Homeowners appeared first on Real Estate News & Insights | realtor.comÂ®.
When we bought our first home in 2013 we thought it would be our forever home. We planned on renovating once we were in a better place financially, but 6 years later we found ourselves struggling with the decision to renovate or sell.Â
First-time home buyers today face a tough road, shopping for homes during a pandemic, high housing prices, and deep economic uncertainty. For military families deployed overseas, it’s all even trickier to figure out.
In this second story in our new series “First-Time Home Buyer Confessions,” we talked with husband and wife Kyle LaVallee and Natalie Johnson. They were renting an apartment in Fayetteville, NC, when they decided to start shopping for their own home in the area in April.
At the time, LaVallee was stationed in the Middle East as a sergeant in the U.S. Army. Yet even though he was thousands of miles away, he managed to attend every home tour with Johnson via FaceTime. In July, they closed on a brick, ranch-style three-bedroom that LaVallee would not see in person until a long-awaited trip home in October.
Here’s the couple’s home-buying story, the hardest challenges they faced, and what LaVallee thought of his new house once he home managed to lay eyes on it for the first time.
Location: Fayetteville, NC
House specs: 1,166 square feet, 3 bedrooms, 2 bathrooms List price: $111,900 Price paid: $115,000
A pandemic plus deployment seems like a tough time to buy your first house. What convinced you to forge ahead?
Johnson: Kyle was deployed in October 2019 while we were renting a one-bedroom apartment in Fayetteville. Kyle wasnât fond of renewing the apartment leaseâwe had been there for two years and were running out of space. We wanted to get a dog; we wanted a yard, and our own property where we can do anything we wanted.
We started educating ourselves on the process. We knew a mortgage was going to be significantly less than what we were paying in rent. Kyle thought it would be smart to buy because [nearby] Fort Bragg is one of the biggest military bases in the world. If we ever leave or get stationed somewhere else, weâre not going to have a problem finding anyone to rent it. And we could always come back.
LaVallee:Â I was interested in gaining equity and ownership, rather than just paying to rent something I’d never own in the end.
Johnson:Â We started looking at houses back in January. In April, we kept seeing information about lowering interest rates. Thatâs why we got serious about the process in the middle of the pandemic, and when we connected with our real estate agent, Justin Kirk with Century 21.
How much did you put down on the houseâand how’d you save for it?
Johnson: We put 20% down.
LaVallee: I was making a lot of money while I was deployed, and I had no expenses really. I was just saving everything I had, knowing I wanted to invest it in a house.
Johnson: I cut spending. I didnât buy things I wanted, just what I needed. The pandemic helped a lot, honestly because we obviously couldnât go out.
LaVallee:Â We qualified for a VA loan, but we just wound up using a conventional loan. Most people in the military will use a VA loan where you donât put any money down, but [since we had enough saved] we wanted the lowest monthly mortgage payments.
What were you looking for in a house?
LaVallee:Â We knew we might [eventually] be moving, so it wasnât like it had to be a house we would stay in forever, more of an investment property.
Johnson: We were looking for things that would be attractive to future renters. We had a military family in mind because Fayetteville’s got more than 50,000 active-duty. We looked for a location close to a Fort Bragg entrance. We thought three bedrooms was perfect for us because our families are close with each other, so theyâll all come down at the same time so weâll have two extra bedrooms for them. Kyle really wanted a garage, so that was a huge thing.
LaVallee: Garages arenât very common down here, so that limited a lot of options for us. A lot of houses have carports, or they finish the garage and turn it into a bonus room.
Johnson: We wanted something that needed a bit of fixing up, because we like to be handy and put our personal touch on everything, and we ultimately knew that would be a lower-cost house.
How many homes did you see in person, and how did Kyle participate from overseas?
Johnson:Â It was 10 or 12 homes. We were out three to four times a week looking at places with our real estate agent. We wore our masks for the tours, and I used hand sanitizer since I was opening and closing drawers and closets. Most were vacant, but we did tour one house that still had people living in it, although they were gone during the tour, so we avoided touching a lot of things.
During tours we FaceTimed Kyle in. We figured that was probably the most convenient way to do it since he could see every single house and room in detail.
LaVallee:Â Well, I couldnât really see all the details.
Johnson: He got to know our real estate agent really well via FaceTime. Our agent would say, “Let me know if you need me to hold Kyle while you go look in this room.” I felt so bad, though, because I work full time, so I’d tour homes around 5:30 in the evening, which for Kyle was 2:30 in the morning. But he stayed up for every single tour.
LaVallee:Â I was sometimes frustrated not being able to be there. I left it all up to her. I had to trust the feelings and vibes she got from each house.
How many offers did you make before you had one accepted?
Johnson:Â We put three earlier offers in.
LaVallee:Â They would be listed and the next day would be sold. The first three offers we put in were asking price, and Iâm pretty sure everybody else offered more, and ours were never even considered.
Johnson:Â It was ridiculous. It was definitely a sellerâs market, so you had to act really fast and you had to be really competitive. On our fourth offer, we ended up at $3,100 over asking. I felt like we had to fight for this house.
Were you competing with other offers for the house you bought?
LaVallee:Â There were multiple offers.
Johnson: Our real estate agent told us, “You should definitely write a letter and talk about how Kyleâs gone right now and youâre first-time home buyers and this one really clicked with you,â which it did. The second I walked in, itâs this adorable brick house, itâs super homey, it has a great yard. In the letter, we just talked about how all of that was so attractive to us as first-time home buyers, and we were really excited and could see ourselves in this home.
Our real estate agent suggested going in higher than asking, so we just rounded up to $115,000. He also suggested doing a higher due diligence paymentâwe usually did $200, but this time around we did $500. And the earnest fee we put in was $500 or $600.
After our offer was accepted, we knew it was going to be kind of difficult with the home inspection. They were already redoing the roof, which was a huge cost on their part, so asking for more was definitely going to be a challenge. So we didnât ask for much.
What surprised you about the home-buying process?
Johnson:Â How fast it went, for me at least. Our first home tour was in April and then by June, we had found our house and the contracts were written up. I guess I was expecting it maybe to be double the time that it actually was, but houses were just turning over so fast, we had to act fast.
LaVallee:Â From my side, I thought it happened very slowly! I felt like so much was happening in between each step in the process. I had to be patient because I had so little control of the situation, other than just trying to stay involved and be a part of it.
Johnson:Â You never really think that when youâre married, youâre going to buy your first house while your husband is on the other side of the world. But we got through it.
So Natalie, you were living in the house for a few months before Kyle returned from deployment in October to see it. What was that homecoming like?
Johnson:Â He came home a few days shy of the 365-day mark. We were anxious and excited. Several other families and I waited outside of a hangar on base, and soon after hearing their plane landing, we saw the group walking toward us and everyone start cheering and crying.
Because it was dark when we got home, Kyle couldnât see the outside of the house much, or the “Welcome Home” decorations I hung up! But the moment he set foot in the front door, he just stood there and looked around with the biggest smile on his face.
I gave him the grand tour the next morning. He said it looked much bigger than what he saw on FaceTime. We celebrated with a home-cooked meal and the wine our agent gave us when we closed. It was really special.
LaVallee:Â I came home to a nice house. Natalie was worried I would come back to culture shock. But Iâve felt at home ever since Iâve been here.
What’s your advice for aspiring first-time home buyers?
Johnson:Â I would say to go with your gut. Some of the houses youâll tour are really logical to buy, but if they have a bad vibe or theyâre just not really welcoming, then look at others. A healthy balance between logic and feeling is important.
LaVallee:Â We didn’t even know what we wanted until we saw five or six houses, so itâs definitely important to shop around and see what’s out there.
Johnson: We really didnât know much. I told our real estate agent, “Hey, listen, weâre really going to need some guidance. We donât know what things mean, we need you to break it down for us. You have to be patient with us.” I reached out to three different real estate agents, and Justin was the one who not only answered all my questions but was giving a ton of positive feedback. It was nice to have that encouragement, and it definitely made us more confident. You learn a lot by looking at houses, you learn a ton about yourself.
The post What This Military Family Facedâand FoughtâTo Buy Its First House appeared first on Real Estate News & Insights | realtor.comÂ®.
These days, things are changing so fast, itâs tough to keep up. Thatâs especially true in the mortgage industry, where interest rates and the overall home loan landscape are shifting with such head-spinning speed, it’s easy for outdated information to circulate, leading home buyers and homeowners astray.
You may have heard, for instance, that everyone can score a record-low interest rate, or that refinancing is a no-brainer, or that mortgage forbearance means you don’t have to pay back your loan, ever. Sorry, but none of these rumors is trueâand falling for them could cost you dearly.
To help home buyers and homeowners separate fact from fiction, we asked experts to highlight some rampant mortgage mistruths out there today. Whether you’re looking to buy or refinance, these are some reality checks you’ll be glad to know.
Myth No. 1: Everyone qualifies for low interest rates
Thereâs a lot of buzz about record-low mortgage interest rates lately. Most recently, a 30-year fixed-rate mortgage dropped to 2.88% for the week of Aug. 6, according to Freddie Mac.
This is great news for borrowers, but here’s the rub: “Not everyone will qualify for the lowest rates,” explains Danielle Hale, chief economist at realtor.comÂ®.
So who stands to get the best rates? Namely, borrowers with a good credit score, Hale says. Most lenders require a minimum credit score of about 620. Some lenders might require an even higher threshold (more on that later).
Your credit score isn’t the only factor affecting what interest rate you get. It also depends on the size of your down payment, type of home, type of loan, and much more. So, keep your expectations in check, and make sure to shop around to increase the odds you’ll get a good rate.
Myth No. 2: Getting a mortgage today is easy
Many assume today’s low interest rates mean that getting a mortgage will be a breeze. On the contrary, these low rates mean just about everyone is trying to get a mortgage, or refinance the one they have. This glut of applicants, combined with the uncertain economy, means some lenders may actually tighten loan requirements.
In fact, a realtor.com analysis found that 5% to 20% of potential borrowers may struggle to get a mortgage because of these stricter standards. And getting a mortgage could become even tougher if the recession gets worse.
For example, some lenders may also require higher minimum credit scores and larger down payments. In April, JPMorgan Chase began requiring a 700 minimum credit score and 20% down payment.
Jason Lee, executive vice president and director of capital markets at Flagstar Bank, says some lenders arenât offering the loans that are considered riskierâsuch as jumbo loans, which exceed the conforming loan limit (for 2020, that max is $510,400).
“There arenât as many loan products available,” Lee says.
And even if you do manage to get a loan,Â it may take longer than you’d typically expect.
âBased on low rates and a high volume of refinances, loans are taking longer to complete from application to closing,â says Staci Titsworth, a regional mortgage manager for PNC Bank.
As such, borrowers should ask their lender how long the process will take to close, and make sure theyâre aware of the expiration date on the interest rate theyâve locked inâsince with rates this low, they could go up.
âMost lenders are locking in the customerâs interest rate so itâs protected from market fluctuations,” Titsworth adds.
Myth No. 3: Everyone should refinance their mortgage
âWith mortgage rates hovering near record lows, a refinance can make sense and can help free up monthly cash flow,â Hale says.
Still, not everyone should refinance. Homeowners should make sure to take a good hard look at their situation to see whether it makes sense for them.
For one, it will depend on your current interest rate. If it’s low already, it may not be worth the troubleâparticularly since refinancing comes with fees amounting to around 2% to 6% of your loan amount.
Given these upfront costs, refinancing often makes sense only if you plan to remain in your house for a while.
In general, ârefinancing is a good idea for homeowners who plan to live in the same home for several years, because they will reap the monthly savings over a longer time period,” Hale explains.
Myth No. 4: You can apply for a mortgage after you’ve found a home
Many people assume that you can find your dream home first, then apply for the mortgage. But that’s backwardânow more than ever. Today, your first stop when shopping for a house should be a mortgage lender or broker, who can get you pre-approved for a home loan.
For âa buyer in a competitive market, it’s typically essential to have pre-approval done in order to submit an offer, so getting it done before you even look at homes is a smart move that will enable a buyer to move fast to put an offer in on the right home,â Hale says.
Mortgage pre-approval is all the more essential in the era of the coronavirus pandemic. Why? Because many home sellers, leery of letting just anyone tour their home, want to know a buyer is seriousâand has the cash and financing to make a firm offer. As such, some real estate agents and sellers require a pre-approval letter before a potential buyer can view a home in person.
Nonetheless, according to a realtor.com survey conducted in June of over 2,000 active home shoppers who plan to purchase a home in the next 12 months, only 52% obtained a pre-approval letter before beginning their home search, which means nearly half of home buyers are missing this crucial piece of paperwork.
Aside from getting their foot in the door of homes they want to see, home buyers benefit from pre-approval in other ways. Since pre-approval lets you know exactly how much money a lender will loan you, it also helps you target the right homes within your budget.
After all, as Lee points out, âYou donât want to get your heart set on a home only to find out you canât afford it.â
Myth No. 5: Mortgage forbearance means you don’t have to pay back your loan
The record unemployment caused by the COVID-19 pandemic means millions of Americans have struggled to pay their mortgages. To get some relief, many have been granted mortgage forbearance.
Nearly 8% of mortgages, or 3.8 million homeowners, were in forbearance as of July 26, according to the Mortgage Bankers Association.
The problem? Many mistakenly assume that mortgage forbearance means you won’t have to pay your loan, period. But forbearance means different things for different homeowners, depending on the terms of the mortgage and what type of arrangement was worked out with the lender.
âForbearance is not forgiveness,â Lee says. âRather, itâs a timeout from having to make a mortgage payment where your servicerâthe company you send your mortgage payments toâwill ensure that negative impacts to your credit report and late fees will not occur. However, because forbearance is not forgiveness, you will need to reach some sort of resolution with your loan servicer about the missed payments.â
The paused payments may be added to the back end of the loan or repaid over time.
âIt does not forgive the payments, meaning the borrower still owes the money,â Hale says. âThe specifics of when payments need to be made up will vary from borrower to borrower.â
The post 5 Rampant Mortgage Myths You’ll Hear These DaysâCompletely Debunked appeared first on Real Estate News & Insights | realtor.comÂ®.