Real Estate Weekly: November 18, 2022

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The Ridge in Anacor tes, where amazing views await you! Main floor living features flowing floor plan w/stunning views from living, kitchen, pr imar y & deck! Enjoy the view of mountains, Islands & bay in front of the gas fireplace on a cool NW evening Become inspired by the Chef ’s kitchen boasting double ovens & Ther mador stove Retreat to the pr imar y suite w/full bath & walk in closet. On the lower, 2 additional bedrooms/office space, full bath & family room with entrance to lower deck + a huge storage area perfect for studio or workshop 2 car garage also has a large storage room w/lots of space Located near to one of the beautiful Anacor tes Forest Land entries and off the main road with no through traffic creating a private feel.

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

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

“When sellers are interviewing real estate agents to market their homes, their primary focus is usually on the advertising that the agent will offer them,” says Jessica Goodbody of Weichert Realtors.

Let us help you meet your marketing goals by advertising your listings in Real Estate Weekly.

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Why and how to buy an energy-efficient home

By Erik J. Martin CTW Features

If you want to keep more green in your wallet and make your neighbors green with envy to boot, think green real estate in the form of an energy-sav ing, ecologically conscious new or used home, the experts agree.

“A green home is typi cally one that is designed and built to be energyefficient and environmen tally friendly,” notes Adam

Roper, an expert in sustainability, green building, and off-grid living. “This can mean different things for different people, but there are some common features that are often seen in green homes, including solar panels, wind tur bines, rainwater harvesting systems, grey water recycling systems, double or triple-glazed windows, and high-efficiency insula tion.”

Green homes have been increasingly popular in

the last two decades, especially as energy-efficient products, materials, and systems have become relatively more affordable and available, and more homeowners learn about the benefits of owning a green property.

“The real advantage is long-term energy savings. Simply using Energy Star appliances, which is about the lowest level of green commitment one can make, can save the average homeowner around $450

per year,” Martin Orefice, founder of Rent To Own Labs, says. “Throw in features like rooftop solar panels and you can yield another $1,500 annually in savings. And quality insulation can decrease your overall heating and cooling costs by another 20%. All of these sav ings start to add up, even without considering more exotic features like pas sive heating and cooling architecture, geothermal heating and cooling, and

gray water reclamation.”

In general, energy costs for green homes are up to 50% lower than for tradi tional homes, per the US Department of Energy.

“In addition to saving money on energy costs, green homes are also better for the environ ment. They produce less pollution and use fewer resources than traditional homes, meaning they have a smaller carbon footprint. This is good news for both current and future generations, as it helps to reduce our impact on the planet,” adds Roper.

That’s not all. Green homes are commonly more attractive and comfortable than conventional residences. That’s because they are usually better insulated and ventilated, adding to indoor climate comfort.

“They also tend to in corporate design features that make them more aesthetically pleasing, such as large windows and open floor plans,” Roper continues. “All of these factors make green homes a wise investment, both financially and environ mentally.”

Before committing to the purchase of an existing or to-be-built energy-ef ficient home, give careful thought to several factors.

“Consider the location of the home and whether it is well suited for a green or energy-efficient design.

For example, a home located in a sunny climate is a good candidate for

solar. It’s also crucial to ponder the overall ef ficiency of the property, including things like the insulation and sealing as well as the type of doors and windows used,” advises Richard Kelly, co-founder/author of Unique Home Guide in a Nashville. “Furthermore, think about the renewable energy options available for the home. Can items like solar panels or a small wind turbine be added in the future?”

When it comes to solar panels, pay careful attention to the financing agreement.

“These dictate the terms at which the solar instal lation is paid for, and it will have an impact on how quickly those energy savings end up in your pocket,” notes Orefice. Additionally, weigh the extra costs involved with building/buying a green abode.

“On average, I’ve noticed that these homes tend to cost about 10% to 20% more than a comparable home,” cautions Kelly. Not sure you’re ready to relocate to an emerald estate? There are ways you can make your current home eco-friendly and energy optimal.

“Install energy-efficient light bulbs. Add insulation to your attic and walls. Upgrade your windows and doors. Seal any air leaks. And install a programmable thermostat,” suggests Kelly.

Counting bonuses as income

Question:

I work in the tech industry and in my field it’s common to get an annual bonus. This is not really regular “income” in the sense that it shows up in every paycheck or that it’s guaranteed. How will my bonus count when mortgage lenders look at my loan application?

Answer:

The use of bonuses is common in many fields. They’re typically annual or quarterly payments, but they can also be earned in other ways as well, such as with completion of an important project.

Let’s say you got a $6,000 year-end bonus last December and reported it on your tax return. An underwriter will take the $6,000, divide it by 12, and then potentially add $500 to your monthly income. This higher monthly income will then improve your debt-to-income (DTI) ratio, making it easier to qualify for financing. Why potentially? The underwriter will want to be sure that your bonus is regular and continuing. The underwriter will check past income information to see if there’s a trend.

According to Fannie Mae, there are three likely situations.

“If the trend in the amount of income is stable or increasing, the income amount should be averaged.

“If the trend was declining but has since stabilized and there is no reason to believe that the borrower will not continue to be employed at the current level, the current, lower amount of variable income must be used.

“If the trend is declining, the income may not be stable. Additional analysis must be conducted to determine if any variable income should be used, but in no instance may it be averaged over the period when the declination occurred.”

So far, so good. Bonus income is a good thing, especially if the bonus amount is steady or increasing each year. However, there’s a catch associated with some bonus income.

In the world of mortgage lending, there is the question of status. Are you employed or selfemployed? The answer is important because there are different paperwork requirements for borrowers who fit into one category or the other.

Q&A Q&A

ASK OUR BROKER

By Peter G. Miller

You might think of yourself as employed, however if you routinely earn large bonuses, underwriters may look at your application and say, “ah ha, this person is self-employed.”

Generally, if 25% or more of your income routinely comes from bonuses, lenders may see you as self-employed. This does not mean you can’t get a mortgage and may actually have some advantages.

As a self-employed borrower, you will need to show at least two years of past tax returns, and you may also need business tax returns and yearto-date accounting information. However, the underwriter may be able to “gross-up” qualifying income by “adding-back” business depreciation.

Bottom line: If you receive bonus income, enjoy it, report it to the IRS, and let lenders know about it. You may have a better DTI by showing the additional income and qualify for a bigger mortgage.

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

Creating a trail of rental payments leads to home buying

By Marilyn Kennedy Melia CTW Features

Most renters pay their landlord on time. If a renter aspires to buy a home, it’s especially important to keep making timely payments, since there’s a movement underway for mortgage applicants to get a boost towards approval from good rental histories.

In the past year, both Fannie Mae and Freddie Mac, the two big quasi-govern mental organizations that provide widely used underwriting systems that determine whether an applicant’s financial profile is strong enough to garner loan approval have begun flagging lenders when a borrower is on the border between approval and denial. When flagged, a lender asks the borrower if he is willing to share his checking account transactions that will his rental payment

history [Zelle, Venmo, or Paypal histories are also accepted] by linking that data into the underwriting system.

It’s a laudable effort, says Laurie Good man of the Urban Institute, a non-profit that studies housing issues. But it’s only a fraction of renters who apply for a mortgage who will have their rent checks considered, since only those just shy of approval will be asked.

Currently, credit bureaus capture rent payment histories on only a small minor ity of renters. Credit bureau information forms the backbone of the all-important credit score which mortgage approval de pends on. “About ten percent of the large, multi-family apartment complexes report to bureaus”, estimates Charles Chedester, of Midwest Family Lending, an Iowa mortgage firm.

Chedester says he has seen few mortgage

applicants being helped by the Fannie Mae and Freddie Mac change to flag borderline applicants. One impediment, he says, is that especially those renting from small “Mom and Pop” landlords don’t have a complete payment record. “They might pay by cash one month, by check the next.”

Still, there is movement towards counting rent towards mortgage approval, Chedester says. He recommends that rent ers “pay [rent] like homeowners pay mortgages,” pointing out that most mortgage holders have automatic deductions from their checking accounts.

Currently, a spokesperson for FICO, the company that develops scores used by mortgage lenders says newer versions of the FICO scores incorporate rental data if it’s captured by a credit bureau.

$650,000

104 n hAw thorne st, Burlington $384,000

5 Acres

Classic 1920s farmhouse with 1368 sq ft, 2 beds/1 bath, and den. Beautiful woodwork and floors throughout the home, including many built-ins; please take note of the shelves in the den. Home sits on peaceful, mostly pastured 5 acres with outbuildings (a barn and a storage building). A large, covered front porch and a two -tier deck on the west side of the home enhance your enjoyment of the outdoors; the back door deck is covered and offers built-in seating. Gated drive. Fruit trees, grape vines, and a garden area enhance this peaceful homestead. Fenced on three sides with the four th side being the road.

MLS#2004946

1226 Alpine View

Danya Wolf (360) 708-8294

This coz y 2 bedroom Burlington home needs some work but has lots of personality : beautiful pergola to welcome you home; ample cabinets and counter space in the step down kitchen, bath has a farmhouse style sink and plenty of room for a stacking washer/ dr yer; off-street parking and awesome trees and shrubs. Covered concrete patio Private yet in town and close to Maiben Park MLS#2001713

Danya Wolf (360) 708-8294

Stunning contemporar y home with an amazing two-stor y foyer that provides the ‘wow ’ fac tor upon entr y. This home has it all, formal dining and eat-in space in the kitchen, fabulous acacia floors; even the conveniently appointed kitchen has a view Glass blocks in the owner ’s primar y suite bath; enhances the beauty and enjoyment yet allows for privac y. The owner ’s suite bath also offers a jetted tub, separate shower; dual sink vanity with plenty of counter space and storage Moving into the suite there is also a walk-in closet, a sliding door to the covered patio, plush carpet, and a truly remarkable high ceiling. Both the living and family room feature a natural gas fireplace with an elegant mantel and large windows to take in the territorial view MLS#2007767 Danya Wolf (360) 708-8294

co MM er cial

and I-5. Water, Cascade Natural Gas, Puget Sound Energy, City sewer, and Comcast are all in the street. MLS#2009122