Interest Rates: All Quiet...for the Moment
South Bethany homeowners who had been bracing themselves for sharp rises in mortgage interest rates must now be scratching their heads. As the online Mortgage News Daily put it recently, “…rates have been extraordinarily sideways, and right in line with the lowest levels in 11 months.”
Since historical averages are still significantly higher, it’s no wonder that most observers still believe the greater likelihood is for rate increases. But recent Fed happenings show a crack in their avowed determination to let that happen by tapering off purchases of mortgage-backed securities. The hemming and hawing is notable. It’s all pretty much up in the air.
In any case, one thing I can guarantee is that South Bethany mortgage holders will benefit if they take advantage of savings opportunities when they present themselves. Among current possibilities—
1. Refinance Your Mortgage
South Bethany mortgage holders who haven’t already refinanced should at least consider doing so. Refinancing means taking advantage of the still historically low South Bethany interest rates—often the most meaningful step in reducing your monthly mortgage payments. Before deciding to refinance, make sure that the mortgage costs involved will be less than the resulting savings. If you agree with the prevailing wisdom that it’s unlikely we will see a significant drop in interest rates in the near future, today’s levels still look inviting.
2. Cancel Private Mortgage Insurance (PMI)
According to the National Association of Realtors®, mortgage down payments have fallen over the past decade. Their figures show that the average mortgage down payment in 2013 was 10% – compared with 16% just ten years earlier. Homeowners who put down less than a 20% deposit are typically required to take out Private Mortgage Insurance. But once the Loan-to-value (LTV) ratio falls below 80%, homeowners can ask for the PMI insurance to be removed—and they should, because the lender isn’t responsible for keeping track of that for them. If you are close to the 20% threshold, it may be worthwhile to make a one-time payment that will reduce the principal below 80%.
3. Extend the Length of the Mortgage
Many homeowners have made significant reductions in their principal by opting for shorter-term mortgages. But should rising South Bethany interest rates make a property you are trying to buy unaffordable, extending the length of the mortgage can reduce monthly payments to a more comfortable level. Although over the long term this will end up costing significantly more in interest, moving from a 15-year mortgage to a 30-year can sometimes be the right move—especially when the property at stake represents one of the terrific values currently out there.
While interest rates in South Bethany may rise or fall or, as we’ve seen lately, hold surprisingly steady, sudden leaps or plummets are unlikely…and with a little preparation, unpleasant future surprises in interest rates are avoidable. Thinking of buying a home in South Bethany? Call me today to start laying the groundwork!
- Written by Russell Stucki
Delaware Rental Property Investments: They're Out There!
When any investor first begins to mull over the idea of acquiring a rental property in Delaware, it’s usually in competition with an array of other investment types—each with its inherent plusses and minuses. Some of them are new ideas (new technology company stocks; new forms of commercial exchange)—but real estate is definitely not one of those. It may not be innovative, but being a landlord has always been one of the leading sources of passive income.
What is exciting about rental property is why it has always been recognized as a sound investment. When the income from a Delaware rental property is able to pay for its own underlying mortgage, it self-propels its growing equity. The rental property’s investment value grows as the loan is paid down month by month, year after year. Added to that is any appreciation in its market value.
And with the best Delaware rental property scenario, when rental income exceeds mortgage and other expenses, it will even throw off an extra income stream. Needless to say, choosing the right rental property in Delaware is worth the effort! Much of that effort involves making a serious effort to map out and project values, income and expense:
- Neighborhood: Consider how the overall desirability of the neighborhood is likely to affect its appeal to tenants. Are there attractive amenities like parks, shopping and entertainment venues? What do the local classified ads reveal -- is the area’s vacancy rate high or low? How do rental prices compare with adjacent neighborhoods?
- Project Ancillary Expenses: Determine the historical property tax rates, and what future rate changes are being proposed. Likewise, investigate insurance costs and roll both expenses into your total monthly expense projections. You want to be sure that they are low enough that you can still make a profit from the rental.
- Local Dish: Expert advice from Investopedia is for prospective landlords to speak with renters as well as homeowners in the neighborhood. It’s a good point: “Renters will be far more honest about the negative aspects of the area because they have no investment in it.”
- Schools: Rental homes in Delaware featuring two or more bedrooms will attract families—and that means they will likely have children in school. If a school is nearby the home, it’s likely to be that much more popular with family tenants.
- Crime: Crime-prone neighborhoods can have higher turnover and longer vacancy rates, so a bargain purchase price may be less of a bargain than you’d hope.
- Commute: Is the property a long commute from the commercial center of town, or a quick drive? Is there public transportation? Many prospective tenants begin their housing search with their workplace as the center point. Renters will consider this before signing a lease—and you should before signing your offer!
If you are thinking of looking at rental property in Delaware this year, they’re definitely out there. Call me today to discuss some of the many opportunities!
- Written by Russell Stucki
Buying an South Bethany Home: Follow-up to the Adventure
Buying a home in South Bethany is sort of a modern day adventure. At first there’s the intrigue of figuring out the advantages and disadvantages between the neighborhoods and listings competing for your attention; then there are all the challenging, sometimes exhausting—then, ultimately, exhilarating steps that lead to home ownership.
But even after the previous owner has handed over the keys, there’s more to come: a few extra steps new homeowners can decide they wish to take. Here are five of those—things you can choose to do after buying a South Bethany home:
1. Change the Locks
Who knows how many people have a copy of those keys? It’s a good idea to change the locks on all exterior doors, because it’s not just the previous owners who have had access to the property; there may also have been guests or tradespeople with access to the keys. By installing new locks, you can be sure that you are complete control of the keys to your new home.
2. Have the House Cleaned
While the previous homeowners are obliged to leave the home in reasonable condition (usually “broom clean”), consider scheduling a professional cleaning crew before you move in. If your budget and schedule allows, it can be a plus to know some serious deep cleaning has been performed on counters, plumbing fixtures, carpets, etc.
3. Smooth Transfer of Utilities
After buying a South Bethany home, it’s usually possible to transfer utilities into your name without having to live through a break in service. Contacting all utility companies ahead of time will ensure that the transfer is orderly and scheduled in a manner that will be convenient to your move. It’s also an opportunity to be sure that utility bills have been fully paid before closing on the property.
4. Store the Settlement Papers
At the end of the process of buying a home, a host of details come fast and furious, making it doubly easy to misplace things—even important things, like copies of the papers you execute during settlement. Later, when it’s tax time (or in the future should you sell the property), you’ll save yourself a lot of desperate rummaging if you’ve prepared a secure place to keep them from the start.
5. Take Photos of Your Household Items
It’s important to keep an accurate list of your household contents in the case of theft, fire or other mishap—records to act as verification of your belongings and their condition. Buying a home is the perfect time to take that inventory. Go from room to room snapping digital pictures of everything you own. It will never get easier!
Like anything worth doing, buying your new Delaware beach dream home probably came with its own set of stresses. But it should stand as one of the most rewarding financial moves you will ever make. If you’re thinking of buying or selling a home in South Bethany this spring or summer, do give me a call!
- Written by Russell Stucki
One Decision South Bethany Home Sellers May Not Even Consider...
Should You Engage a Professional Home Stager?
When you put your home on the market, one of the decisions it’s easy to overlook is whether to engage a South Bethany home stager. Especially if you know you have a good eye for décor or have experience in the visual arts, it may not seem necessary to call in a heavy-duty home staging pro to get your place in shape to sell.
It’s certainly not a requirement for listing, but using a professional home staging company can be invaluable for a number of practical reasons:
Your home is lived-in
That does give it a warm, comfortable feeling, but that’s seldom as saleable as a home that presents itself as open and slightly under-furnished. Prospective buyers react favorably when they can easily picture their own belongings in the living spaces. A South Bethany home stager is expert at knowing how to achieve a clean, less lived-in atmosphere with a minimum of disruption.
Save on unnecessary repairs and renovations
Most are necessarily so close to the product (their home) that it’s next to impossible to see it with fresh eyes—the way the prospects will. One of the costly fallouts can be decisions to make repairs and renovations that don’t increase the home’s value by as much as they cost. Some such improvements (like over-painting interior or exterior areas) actually comprise décor choices best left to the future owners. A professional stager has field experience and a good sense for which updates are cost-efficient—and which could be counter-productive.
You stand to earn back more than you spend
Engaging a South Bethany home stager can cost anywhere from hundreds to thousands of dollars. That might seem like an iffy decision since you can’t know that it will ultimately pay off…but it’s tempting when you realize that successful pros are in business because of their track record of making South Bethany houses look great—great enough t become worth more money to buyers!
Using a professional South Bethany home stager is just one of the ways we create successful home sales. If you are looking to list your South Bethany home, call/text 302-228-7871 or email me, Russell Stucki, REALTOR ® of Beach Real Estate Market to provide detailed information on Delaware homes for sale, investment and commercial properties, luxury and waterfront homes, condos/townhomes, new construction, lots and land, farms and equestrian properties located in but not limited to Bethany, Bethel, Bridgeville, Dagsboro, Delmar, Ellendale, Fenwick Island, Frankford, Georgetown, Greenwood, Harbeson, Laurel, Lewes, Lincoln, Milford, Millsboro, Millville, Milton, Ocean View, Rehoboth Beach, Seaford, Selbyville, Delaware.
- Written by Russell Stucki