Real Estate Weekly: May 13, 2022

INSIDE

This Issue

LENDING A HAND VIA AN ARM WHY ADJUSTABLERATE MORTGAGE LOANS ARE MORE ATTRACTIVE TO BUYERS NOWADAYS PAGE 5 WAYS TO SAVE ON FLOOD INSURANCE PAGE 7 CLASSIFIEDS PAGE 7 MAY 13, 2022

INSIDE

TABLE OF CONTENTS

PAGE

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Lending a hand via an ARM Why adjustable-rate mortgage loans are more attractive to buyers nowadays..............................P5 Q&A Ask Our Broker.......................................................................P6

Ways To Save On Flood Insurance.......................P7 Classfieds.............................................................................P7

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May 13, 2022

STAT Real Estate Stat

18.7%

Real Wood Real Quality

In the first quarter of 2022, families typically spent 18.7% of their income on mortgage payments (compared to 14.2% one year ago).

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Source: National Association of Realtors 2022

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May 13, 2022

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Now could be the time to sell a new home and earn a slice of the real estate pie.

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Record-low interest rates is renewing interest in the housing market for many people.

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May 13, 2022

why m opt fo secur mort the in lock i chang loan.

Prob rates loans recen heigh many in rat prosp purch shopp less d afford

gage now.

“These are all good scenarios for borrowers, as they may never actually see their mortgage reach the adjustable stage but are looking to minimize costs while they are still living in the property,” notes Lynch.

Rodriguez-Howell adds that “if you are expecting a pay increase in the future that makes a higher mortgage payment manageable, an adjustable-rate mortgage could be right for you, as well.”

Poor candidates for an ARM include those eager to purchase a forever home or borrowers whose income can fluctuate from year to year, including the self-employed and those with a commission-based occupation.

Martin Orefice, CEO of Rent To Own Labs, cautions that, while ARMs tend to offer better deals upfront – and even better bargains in the future if interest rates after that. Using this prevent the rate from remain low – “borrowers going too high when the example at Webster Five, who get adjustable-rate in year eight of an ARM, loans in conditions where adjustment period kicks the highest that interest in. rates are climbing long“For example, the ARM rate could go is 5.50%; term are going to end up we offer at our bank can- in year nine, the most the paying much more for not adjust more than 2% rate will jump would be their money than fixedabove the initial inter7.50%; and in year 10, rate borrowers would. If est rate at the first ratethe interest rate could you have the money to adjustment period. Then, increase to as much as endure higher rates in the they cannot adjust more 9.50%, which would be short-term, adjustablethan 2% at each subse6% over the initial inter- rate mortgages can make quent rate adjustment, est rate. a lot of sense. But those and they cannot adjust ARMs are best for boron tighter budgets who rowers who don’t plan on couldn’t afford a major more than 6% over the initial interest rate at any remaining in their homes increase in their mortgage time during the life of the beyond the first few years, payments should stick to those seeking starter loan,” explains Lynch. fixed-rate loans.”

Case in point: An ARM homes, or homeowners For best results, consult who anticipate downsiz- with a trusted mortadvertised as “7/1 at gage professional about 3.50%” means the inter- ing within the next 5 to est rate of 3.50% is fixed 10 years but would still whether an adjustable-rate for the first seven years prefer a lower monthly mortgage is ideal for your situation. and can adjust each year payment on their mort-

Lending a hand via an ARM

Why adjustable-rate mortgage loans are more attractive to buyers nowadays

By Erik J. Martin sure thing, they say, is a safe bet.

It’s a big reason why most homeowners opt for the certainty and security of a fixed-rate mortgage loan in which the interest rate they lock in initially does not change over the life of the loan.

Problem is, interest rates for fixed-rate home loans have skyrocketed in recent weeks, reaching a height we’ve not seen in many years. This spike in rates can discourage prospective buyers from purchasing or cause home shoppers to settle for a less desirable but more affordable home.

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May 13, 2022

That’s why many buyers seeking home financing are increasingly choosing adjustable-rate mortgage loans (ARMs) instead lately.

“An adjustable-rate mortgage is a home loan where the interest rate adjusts over time based on the market,” says Alexandra Rodriguez-Howell, director of Silverton Mortgage in Atlanta.

“This type of loan usually starts with a lower rate compared to fixed-rate mortgages, after which time the rate can fluctuate.”

ARMs are typically 30-year loans comprised of two distinct periods: a fixed-rate phase in which

the interest rate doesn’t change, usually lasting five, seven, or 10 years.

The second phase is the adjustment period, where the interest rate can go up or down based on market trends.

“These types of mortgages are becoming more popular with buyers lately because ARMs can be a great way to keep mortgage payments as low as possible during the early years of the loan,” adds Rodriguez-Howell.

Nicholas Lynch, senior vice president and mortgage sales manager for Webster Five Bank in Auburn, Massachusetts, says caps built into most adjustable-rate mortgages

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Rent payments and credit scores Question:

We’re both renters and savers. We pay our rent and have good savings. We want to purchase our first home and got copies of our credit reports before speaking with lenders. Surprise! The reports have information regarding credit card use but say nothing about our rental payments, payments that should be a big plus in our situation. What can we do?

Answer:

Renters routinely get the short end of the financial stick when it comes to credit reports. “For many households, rent is the single largest monthly expense. There is absolutely no reason timely payment of monthly housing expenses shouldn’t be included in underwriting calculations,” said Sandra L. Thompson, Acting Director of the Federal Housing Finance Agency (FHFA).

The tenant credit crunch reflects several potential problems. Some tenants may have insufficient information or not enough recent data to create a credit score. These are “unscorables” with socalled “thin” files. There are also credit “invisibles,” individuals for whom credit reporting agencies

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(CRAs) have no information.

Michael Turner, president of the Policy and Economic Research Council (PERC), explains that “53 million people in the US have sparse or no credit history which can lead to a credit Catch 22 – in order to qualify for credit, you must already have credit.”

The problem for tenants is that few landlords – fewer than 5% according to Fannie Mae – report monthly rental payments to credit reporting agencies.

The lack of landlord credit reporting is a big hurdle for tenants. Importantly, the lack of tenant payment reports is also a problem for landlords. A 2019 study

by TransUnion found that when rent payments are shared with credit reporting agencies, 73% of all renters would be more likely to make timely payments and 67% said they would prefer to rent from landlords who reported monthly payments.

There are services tenants can pay to assure that monthly rental payments are included in credit reports. However, why should tenants have such a cost when those with credit cards or who finance a car do not?

A solution has now been developed by Fannie Mae. The way it works is that a mortgage applicant gives

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Q&A

ASK OUR BROKER

By Peter G. Miller

Fannie Mae the right to electronically check bank records. Fannie Mae can then independently see recurring payments for the past 12 months, including rent payments. Such payments can be used to support mortgage applications.

But what if a payment was missed or late?

“Only consistent rent payments,” said Fannie Mae, “will be considered to improve eligibility. Any records of missed or inconsistent rent payments identified in the bank statement data will not negatively affect the applicant’s ability to qualify for a loan sold to Fannie Mae.” In effect, tenants can now get the credit benefit they deserve when applying for a mortgage – even if landlords do not report monthly payments to credit reporting agencies. Speak with local mortgage loan officers for details.

But what about the “unbanked,” those without checking or savings accounts? The Fannie Mae program provides another reason why opening a bank account can be good for credit purposes as well as convenience.

Email your real estate questions to Mr. Miller at peter@ctwfeatures.com.

May 13, 2022

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Ways To Save On Flood Insurance

By Marilyn Kennedy Melia

Homeowners purchase flood insurance because they believe it’s needed, or because their mortgage lender requires it.

In either case, especially the latter, no one likes spending a lot for the protection.

Just as the public perception of flooding risk is changing from the news images of disasters, experts are also reassessing which areas of the country are most vulnerable.

Specifically, FEMA introduced its “Risk Rating 2.0” last October, rolling out new charges for its National Flood Insurance Program (NFIP) to better reflect factors like a home’s elevation.

Any new policies issued since October carry the new rate, and this past April, owners who’ve had federal flood insurance in place may have seen their charges change. “ApproxMay 13, 2022

imately 2.7 million single-family homes will see increases in their premiums, and approximately 600,000 will see decreases,” says a FEMA spokesperson shortly before the new policies were enacted.

Most of the changes are minimal, but for about 25,000 homes, mostly in coastal areas, rates might be up to $1,200 annually.

Here are some ways to save and prevent flooding damage: Making improvements for an insurance discount.

Mitigation efforts, like elevating equipment and machinery, can earn homeowners up to five percent on NFIP premiums. See details on mitigation projects at the FEMA.gov site, Risk Rating 2.0, Equity in Action. Popular improvements include installing flood openings, filling in basements and elevating important utilities like your heating and cooling systems, water

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heaters and electrical panels to avoid damage in the event of a flood.

Checking rates from private insurers.

“The private markets offer a rate that is usually less than the NFIP,” says Robert Murphy, founder of Better Flood Insurance, an online brokerage. “That’s because they are using the latest technology to map risk.” However, most private insurers don’t consider a property that has had a flood loss.

Petitioning FEMA for an elevation adjustment.

Elevating a home following NFIP guidelines can cut premiums by 30 percent. Make sure you provide an elevation certificate (EF) which can be downloaded off the FEMA website. This certificate provides important information to help inform mitigation actions which lower your flood risk and establish compliance with local ordinances.

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5706 312th St NW, StaNWood

$700,000 Peaceful & privately set triple wide manufactured home on this 10+ acres.

This beautiful home is tucked away; quiet and conveniently located to all amenities & main roads. Inside you’ll find lots of natural light, spacious rooms including a large kitchen. Primary suite has a huge walk-in closet. Laundry room has plenty of storage.

Expansive deck is perfect for enjoying the sun or entertaining.

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23952 N. WeStVieW rd, MouNt VerNoN $1,100,000 55’of WaterfroNt View, view, view! This spacious 2260 sq.ft home on the sunny side of Big Lake has spectacular views from almost every room. Features include a multi-level deck, aggregate patio and private dock. So many opportunities for just relaxing or entertaining guests. Home offers 2 beds/ 2 baths, kitchen with pantry, SS appliances, lots of cabinetry, a peninsula, just add a couple stools to enjoy a little chit chat while preparing a meal. Laundry room has multiple cupboards and a sink. Unfinished 936 sq.ft basement affords more room for storage. From the kitchen step down to the living room with large windows to take in the view, then out the French doors to the partially covered deck, yours to enjoy rain or shine.

Danya Wolf (360) 708-8294 MLS#1927143 1413 e College Way

$4000/Mo triPle Net

Still time to choose your interior colors. We use Behr brand paint, please visit behr.com/ onecoatneutrals, to select your color. 3200 sq. feet, 9 offices/conference rooms, work area; lunch room; reception/waiting area; natural gas forced air heating; air conditioning; 3 restrooms; new flooring. Or lease Danya Wolf (360) 708-8294 portion of building.

Patricia Box Office Manager O: (360) 424-0300 C: (360) 941-9186

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1419 e College Way, MouNt VerNoN

$1,200/Mo

Fantastic Opportunity! Commercial space for Lease Great stand-alone building with 3 offices. Handicap accessible; remodeled. Convenient location, easy access for commuting. First month’s rent and deposit equal to one month’s rent. Tenant pays Danya Wolf utilities.

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Carla Fischer (360) 982-0010

2017 CoNtiNeNtal PlaCe, Suite #5, MouNt VerNoN $1,200/Mo

60102 State route 20, MarbleMouNt $790,000 Mondo is a well established and well loved Korean and American family restaurant at the foot of the Cascade Mountain Range. Locals and travelers make this part of their Hwy 20 and North Cascade National Park trip. Major arterial choice to Newhalem and continue on to Winthrop; or cross Skagit River bridge and continue up to Cascade Pass and hiking to Stehekin.

Restaurant is warm and inviting, with incredible fare. Very spacious dining area. Some outside seating available. Small gift shop area. Kitchen is beautifully remodeled.

Danya Wolf (360) 708-8294 MLS#1926413 18949 CaSCade ridge Court, MouNt VerNoN

1564 h Street rd, blaiNe

Conveniently located office space for lease features large lobby area and two private office spaces. Ample parking. Monthly rent includes sewer/water/ garbage. First month’s rent and Damage/Security deposit equal to one month’s rent.

Danya Wolf MLS#1922493 (360) 708-8294

Elva Hunter (360) 202-3086

John Hunter (360) 202-3086

Suzanne Jenkins (360) 941-2983

360.424.0300

$835,000

Conway schools; extremely well cared for rambler on 2.77 park like acres just ten minutes from I-5. Beautiful country kitchen with adjoining family room plus separate formal dining and living room provide extra options for entertaining. An open floor plan provides a gracious transition from area to area. Primary bedroom offers spacious bath with double sinks and generous sized walk in closet. Heat pump. 3 bedrooms; 2 baths; separate laundry area with deep sink. Space leveled and prepared for future work shop. Meticulously designed for outside entertaining with patio and incredible focal points. Well-appointed greenhouse; and fruit trees. 3 car garage (800 square feet) & RV parking. Visiting wildlife: deer; eagles; and more. Cul de sac street.

Danya Wolf MLS#1922531 (360) 708-8294

Phil LaMay (360) 840-3086

$1,150,000

Eighty (80) acres with development potential of multiple building tracts. Mostly woods including Western Red Cedar and Douglas Fir, Cottonwood; Alder; and Birch; with one large pond great for duck hunting toward the northerly portion of the 80 acres, some meadows, one small beaver pond, plenty of walking trails or bring your ATV; and an old dug well near the old home site by the southerly edge of the property to the east of the gate.

Future home site/pasture land along the southwesterly edge of the property.

Danya Wolf Shown by appointment. MLS#1925565 (360) 708-8294

Russ Lanker (360) 708-1117

Brett Tacker (360) 840-7931

Danya Wolf Designated Broker/ Owner (360) 708-8294

3780 E. College Way, Mount Vernon www.skagittraditionrealty.com 214419-1

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