National Association of Realtors is changing their 2019 Mortgage rate forecast to 4.5% (down from earlier 5.5%) and home price forecast up 2.9% (up from 2.2%. Full story here
Here’s my answer to that question just asked on Quora
Owning your house is the biggest and best benefit. It means you can paint the bathroom whatever color you want, remodel the kitchen, plant what you want in the yard, and on and on…all for your personal comfort and enjoyment.
If you have a mortgage, the interest you are paying is tax deductible (and for about the first 15 years of a typical 30-year mortgage your payment is more than half interest if you don’t pay taxes and insurance from the same payment. And the property taxes are probably deductible whether you paid with your mortgage payment or separately. No part of rent payments are deductible.
Besides that, owning a home has been a good investment over a long period of time. Yes, there are times when the value of a home may go down, but you only “lose money” if you see during one of those times. In 1950 the median (half were more, half were less) home price in the U.S. was $7,354. By 2000 it was $119,600 and today is $236,400. But be careful here, that 1950 house was less than 1,000 square feet with two bedrooms and one bath. Today it’s just short of 2,500 square feet and the majority have at least four bedrooms and three baths.
Nevertheless, buying a home (and living in it) has almost always been a good investment. One way to lose money on a house is to sell it one or two years after you buy it. If you’re likely to live there for at least two years, my advice is rent.
Here’s answer I wrote recently to that question on Quora:
I’d guess flipping shows the greatest short-term potential, but as with most investments return is related to risk, and there is certainly risk in flipping. For example, what if in the remodel process you discover something not in your original estimate? What if the market turns between the time you buy and finish the remodel? What if the adjacent property is bought for something undesirable – pig farm, shopping center, fast-food restaurant, 10-story condo or apartment
Buying something to rent is lower risk but you need to be in it for the long haul. Investors I’ve worked with look at it for a minimum five year project and, depending on cash flow and their financial situation probably longer. The biggest single advantage to buying investment property is in the depreciation, but that’s not of as much value if you don’t have other income on which it can offset your tax bill. Cash flow depends as lot on how tight the rental market is. Portland right now is super-tight, but the City of Portland also prevents no-cause evictions and/or rent increases of more than 10%/yr without paying relocation costs to the tenant which range from $2900 (1-BR or SRO) to $4500 (3-BR or more). This does not apply to Portland area properties outside the Portland city limits
If you’d like the same patient, professional help I’ve given other real estate investors, please contact me.
With mortgages, there is no “one-size fits all”. Mortgages (and the rates) vary according to your personal situation: income, debts, down payment, credit score and so many more items. Your best source for mortgage information is a local, experienced, mortgage broker. If you don’t know one, contact me for an introduction to my preferred lender.
Fannie Mae, which indirectly finances the fast majority of mortgages in the US, recently did a study on the most influential sources of mortgage information. Here’s what they found
This shows we have a lot of smart people in this country. Almost one third relied on a mortgage lender. Slightly fewer named their Realtor. Before I get too flattered with that, a Realtor is not the best source of mortgage information. If you ask me about mortgages I’ll tell you exactly that and introduce you to my preferred lender, who is a mortgage broker. Next most often used, family and friends, may be a good source if they’ve recently financed a home purchase (but the best mortgage for you is almost certainly not the same as the mortgage your family or friend got). The best source remains a mortgage broker. The reason is that mortgages are so varied and complex (and changing) today that you have to be in the business every day to have good, up to date, knowledge of what’s available that best matches for a particular borrower. A mortgage broker has access to dozens of mortgage sources and probably works with 8-10 on a daily basis. They are the best place to find the best mortgage for you.
In the winter issue of Windermere Living, we highlight some of Maui’s top spots and adventures. We also go behind the scenes with celebrity chef Giada de Laurentiis, who reveals her top five tips for cooking pasta. And don’t miss the new Destination GPS, which spotlights some of the vibrant communities where Windermere has offices. And of course, the homes. Pages upon pages of beautiful homes in Washington, Oregon, Utah, Colorado, California, Hawaii, and Mexico. Click here
We continue to buy ever larger homes, now average 2700 SqFt (up 1,000 from 1973). 41% of renters wish they’d bought. Full details here.
I just learned of a new down payment match offer from Guild Mortgage, the largest local mortgage lender in the NW. It’s really simple: you put up 1% of the purchase price of a home and Guild makes a grant of 2% so you qualify for a conventional 3% down payment mortgage. Yes, you just tripled your money. You can buy a $350,000 home with only $3,500 of your money down (plus closing costs). You could buy a nice $100,000 condo with $1,000 down. There’s even more good news in the fine print in the detail flyer my preferred lender, Kelly Parkman at Guild, gave me today
And here’s a short video of Kelly himself explaining it. We’ve worked together for five years and I’ve never seen him so excited.
Contact Kelly at 503/528-9800 or KParkman@GuildMortgage.net or contact me and I’ll help, too
If you’re like me and my wife, you have a lot of “stuff” (for lack of a more pleasing word) that will simply not fit in a downsized home. I frequently help buyers who want a garage only to store “stuff”. The time-tested method is, of course a “garage sale”. But they are subject to the whims of the weather (if it rains the day(s) of your garage sale, you won’t sell much) and while summer in Portland is usually dependable for decent garage sale weather, the other three seasons are a gamble. And if you don’t have a yard or driveway?
Second place is certainly Craigslist.org but I also found an article click here that lists several competing apps as methods to sell that unwanted “stuff”. Enjoy, and call me when you’re ready for the downsized home or if you’d just like an idea of what your present home would sell for.