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Judi Monday, Your Green Valley AZ Expert

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Transformation In Turquoise Brings Guest Bathroom To Life

by Judi Monday, Your Green Valley AZ Expert

Refresh Your Living Room

by Judi Monday, Your Green Valley AZ Expert

Refresh Your Living Room

by Judi Monday, Your Green Valley AZ Expert

The "Right" Agent And The "Right" Home

by Judi Monday, Your Green Valley AZ Expert

The "Right" Agent and the "Right" Home

Some buyers think that finding the right home is the critical part of the buying process and that is how they determine which agent to use. While it is important, there may be a broader skill set to consider when selecting your real estate professional.

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The most recent NAR Profile of Home Buyers and Sellers indicate that 52% of buyers do want help in finding the right home to purchase. There was a time when the public did not have access to all the homes on the market, but the Internet has changed that.

Helping to negotiate the price and terms of sale were identified by almost 25% of the buyers. No one wants to pay more than is necessary and the terms of the sale can be as important as the price.

The next largest area of assistance that buyers value has to do with financing and the paperwork. Even if a buyer has been through the process before, it very likely could have been several years and things have probably changed. 

Since the cost of housing is dependent on the price paid for the home and the financing, a real estate professional skilled in these specialized areas can be very valuable in finding the “right” home. An agent’s experience and connections to allied professionals and service providers is equally important. 

Ask the agent representing you to specifically list the tools and talent they have available to address these areas.

Balancing Risk And Deductibles

by Judi Monday, Your Green Valley AZ Expert

Balancing Risk and Deductibles

The benefit of insurance is to transfer the risk of loss to a company in exchange for a premium. The deductible is an amount the insured pays out of pocket before the insurance starts covering the cost of the loss. The challenge is to balance the risk an insured can accept with the premium being charged.

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To manage insurance premiums, policy holders often consider adjusting their deductibles. Lower deductibles result in less money out of pocket if a loss occurs in return for higher premiums. Higher deductibles will lower premiums but require that the insured bear a larger amount of the first part of the loss.

Insurance companies offer deductibles as a specific dollar amount or as a percentage of the total amount of insurance policy. The amount is usually shown on the declaration page of homeowner and auto policies.

A small fire in a $300,000 home that resulted in $5,000 of damage might not be covered because it is less than the 2% deductible which would be $6,000. If the homeowner can afford the cost of repairs in exchange for lower premiums, it might be worth it. On the other hand, if that loss would be difficult for the homeowner, a change in the deductible for higher premiums could be considered.

Raising deductibles can save money in the present when paying the premium but could cause problems later if a claim occurs. Homeowners should review deductibles with their property insurance agent to be familiar with the amounts and make any changes that would be appropriate.

Demystifying The Mortgage Process By Translating The Lingo

by Judi Monday, Your Green Valley AZ Expert

Demystifying the Mortgage Process by Translating the Lingo

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If you’re applying for your first mortgage, you’re probably seeing a lot of confusing terminology for the first time. Maybe you’ve recently heard something along these lines: “Based on your FICO, you can get a lower APR and avoid PMI if you pay for half a point and lower your LTV.”

People who work in the lending industry tend to specialize in technical mumbo-jumbo. Rocket Mortgage® by Quicken Loans® aims to bring the mortgage process to a level anyone can understand.

In keeping with our 2018 Super Bowl commercial, if you’re trying to navigate the mortgage waters, let’s give you a quick rundown of some key mortgage terms so you can understand what they mean.

Appraisal

In an appraisal, someone independent of the lender, buyer or seller evaluates the property to determine the fair market value of the home. The determination is based on its characteristics as well as recent sales of comparable properties in the area.

The appraisal is kind of a big deal because the lender cannot lend you an amount greater than what the property is worth. If the appraisal comes in lower than your offer amount, you can pay the difference between the appraised value and the purchase price at the closing table. Or, you can try to renegotiate the sales price with the seller.

If neither of these options is successful, you’re able to nullify the purchase agreement and get your earnest money back.

APR: The Real Interest Rate

When you’re shopping for a mortgage, you’re going to see two different rates. You’ll see one rate highlighted and then another rate, labeled APR, next to it. The interest rate is the cost for the lender to give you the money based upon current market interest rates.

APR (annual percentage rate) is the higher of the two rates and includes the base rate as well as closing costs associated with your loan, including any fees for points, the appraisal or pulling your credit. We’ll have more on points and appraisals in a minute.

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When you compare interest rates, it’s important to look at the APR, rather than just the base rate, to get a more complete picture of overall loan cost.

Earnest Money Deposit

Despite the virtue to be earnest and tell the truth, this isn’t a check we get for our honesty.

Instead, your earnest money is a check you write when a seller accepts your offer and you draw up a purchase agreement. Your deposit of money is a show of good faith to the seller that you’re serious about the transaction.

If you ultimately close on the house, this money goes toward your down payment and closing costs.

Escrow

An escrow account is for funds to be held for future required payments. In the context of your mortgage, most people have an escrow account so they don’t have to pay the full cost of property taxes or homeowners insurance at once. Instead, a year’s worth of payments for both are spread out over 12 months and collected with your monthly mortgage payment.

Your escrow amount is analyzed once a year by your lender to ensure the correct amount is being collected to pay for taxes and homeowners insurance.

FICO® Score

The FICO® Score was created by the Fair Isaac Corporation as a way for lenders and creditors to judge the creditworthiness of a borrower based on an objective metric. Clients are judged on payment history, age of credit, the mix of revolving versus installment loans and how recently they applied for new credit.

The scoring range is between 300 and 850. Credit score is one of the main factors in determining your mortgage eligibility.

Inspection

This is an optional (though highly recommended) step in your purchase process. You can hire an inspector to go through the home and identify any potential problems that might need to be addressed either now or in the future.

It’s a good idea to go through the home with the inspector so that you get an idea of what parts of the home need attention. If you find things that need to be fixed or repaired, you can negotiate with the seller to have them fix the issues or discount the sales price of the home.

This step is commonly confused with an appraisal. While an inspector gives you a heads up about issues, they don’t actually place a value on the house as an appraiser would.

LTV

LTV may sound like the latest and greatest liquid crystal display technology for your television, but it’s actually loan-to-value ratio, one of the metrics your lender uses to determine whether you can qualify for a loan. All loan programs have a maximum LTV. It’s calculated as the amount you’re borrowing divided by your home’s value.

You can think of it as the inverse of your down payment or equity. For example, if you have a 10% down payment, you have a 90% LTV.

Mortgage Note

Typically, we think of the mortgage as specifying the terms of your loan, but that’s actually handled in something called a mortgage note. The mortgage note specifies things like the interest rate and term of the loan as well as when payments are to be made.

Points

You may also see points referred to as prepaid interest points or mortgage discount points. By prepaying some interest upfront, you can get a lower interest rate.

One point is equal to 1% of the loan amount, but you can buy them in increments all the way down to 0.125 points.

For more on points and whether you should buy them, check out this article on getting the best possible rate.

PMI/MIP

Next up in our tour of acronym soup are PMI and MIP, or private mortgage insurance and mortgage insurance premium, respectively. Both of these are types of mortgage insurance to protect the lender and/or investor of a mortgage.

If you make a down payment of less than 20%, mortgage investors enforce a mortgage insurance requirement. In some cases, it can increase your monthly payment of your loan, but the flipside is that you can pay less on your down payment.

Conventional loans have private mortgage insurance, which comes in two flavors: borrower-paid mortgage insurance (BPMI) and lender-paid mortgage insurance (LPMI).

BPMI is pretty straightforward: an extra monthly fee. LPMI programs, like PMI Advantage, allow you to avoid the monthly mortgage insurance payment in one or a combination of ways. The first option is to take a slightly higher rate than loans that have BPMI. You may see the second option sometimes referred to as single-payment or single-premium mortgage insurance in which you avoid the higher rate by paying a one-time fee upfront. You can also make a smaller one-time payment at close and employ a combination of both options.

FHA loans have MIP, which includes both an upfront mortgage insurance premium (can be paid at closing or rolled into the loan) and a monthly premium that lasts for the life of the loan if you only make the minimum down payment at closing.

Now that you have this post in your back pocket, you should be able to go through the mortgage process without feeling like this is all alphabet soup. If you haven’t checked out our Super Bowl commercial yet, please enjoy.

Lower Your Expenses Without PMI

by Judi Monday, Your Green Valley AZ Expert

Lower Your Expenses without PMI

Mortgage loans for more than 80% loan-to-value typically require private mortgage insurance. Mortgage insurance reimburses the lender if a borrower defaults on a loan. PMI is expensive, and homeowners should be aware of how to remove it when certain conditions have been met.

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A borrower can request in writing for the lender to cancel the PMI when the mortgage balance has reached 80% of the home’s original appraised value. However, they are required to eliminate it when the balance reaches 78%. It is a good idea to monitor this, especially if additional principal contributions are being made to pay off the loan early.

Other methods to eliminate PMI sooner than through normal amortization include the following:

  • If the value of the home has increased, the owner may consider refinancing with a loan that does not require PMI. There will be refinancing charges involved but you can determine how long it will take to recapture those costs from the monthly savings.
  • Some lenders will consider using a new appraisal to verify that the home’s mortgage is below the 80% requirement. Find out in advance from your lender if they will accept this procedure and get the names of approved appraisers they will recognize. The cost of an appraisal could range between $450 to $600.
  • Another strategy is to make additional principal contributions on a regular basis to reduce your mortgage balance to 78-80% level that would allow the lender to eliminate the PMI. 

Mortgage insurance is not required on VA loans regardless of the loan-to-value. FHA mortgages made after June 3, 2013 are required to have Mortgage Insurance Premium for the life of the loan. For FHA loans made prior to that date, the MIP should automatically cancel when the loan-to-value ratio reaches 78% and has been in effect for a minimum of five years.

To obtain additional information specific to cancelling your mortgage insurance, contact info can usually be found on the annual statement provided by your mortgage servicer.

Winter Olympic Sports Terms Translated

by Judi Monday, Your Green Valley AZ Expert

The Winter Olympics are upon us once again, and it’s hard not to sit in front of the TV and dream of what it would feel like to be one of these athletes on the world stage. It’s also hard to understand some of the terminology used while watching some sports. How can you accurately picture yourself standing on the podium if you think a chicken salad equals chopped lettuce and some poultry?

Don’t worry, at Quicken Loans we take what seems complex and make it easy to understand. We’ve got translations of some of the terms used in popular winter Olympic sports so you can judge those triple salchows with confidence.

Sources for translations: Mpora.com, USFSA.org, NBCOlympics.com, REI.com.

Curling

Sport in which two teams of four players slide stones across ice toward a target of concentric circles.

Button

What it sounds like it is: An item to secure clothing; a means to an elevator.

Translation: The 1-foot circle at the center of the house (the circular scoring area).

End

What it sounds like it is: Conclusion of a movie, game, event or book.

Translation: A division of play similar to an inning in baseball. An end is complete when 16 stones have been shot. The score is determined at the conclusion of each end. There are 10 ends in men’s and women’s curling and eight ends for mixed doubles.

Hack

What it sounds like it is: To cut or chop with heavy blows; a shortcut or more efficient way.

Translation: The rubber foothold where curlers begin their delivery. It’s located 125 feet from the center of the house.

Hammer

What it sounds like it is: A tool with a heavy metal head used to break things or drive in nails; a famous ’80s rapper.Translation: The last stone shot in each end.

Hog Line

What it sounds like it is: A line of adorable pigs in matching outfits kicking in unison.

Translation: The line behind which a player must release a stone. It’s located 21 feet from the tee. If a stone does not travel beyond the far hog line, it’s removed from play.

House

What it sounds like it is: A structure in which people live; the reason why Quicken Loans wakes up in the morning.

Translation: The circular scoring area made up of four concentric circles measuring 12, 8, 4 and 1 feet in diameter from outside to inside.

Stone

What it sounds like it is: Solid material used for building; a gem or jewel.

Translation: A polished, rare, dense granite weighing about 42 pounds that’s quarried on a Scottish island named Ailsa Craig.

Ice Skating

Sport in which individuals, duos or groups perform on figure skates on top of frozen water.

Axel

What it sounds like it is: A rod passing through the center of a wheel; THE Beverly Hills cop.

Translation: The only jump that takes off from a forward position. Named for inventor Axel Paulsen, it takes off from the forward outside edge and is landed on the back outside edge of the opposite foot. A single consists of 1.5 revolutions, a double is 2.5 and a triple is 3.5.

Camel Spin

What it sounds like it is: A sequence in which several desert-dwelling mammals move in synchronized rotation.

Translation: A spin that is done on one leg, with the free leg extended backward with knee higher than hip level. The body remains in this spiral position while simultaneously spinning.

Death Spiral

 What it sounds like it is: A downward path by an out-of-control aircraft; a situation that typically ends in disaster.
 Translation: A move in pairs skating where the man rotates in a pivot position while holding one hand of his partner who is rotating horizontally around him low and parallel to the ice.
 Flip

 

What it sounds like it is: A turnover using a sudden movement; sudden enthusiasm or anger; the buying and selling of homes quickly to make a profit.

Translation: A toe-pick-assisted jump taken off from the back inside edge of one foot and landed on the back outside edge of the opposite foot.

Loop Jump

What it sounds like it is: A possibly British version of a jump rope.

Translation: An edge jump, taken off from a back outside edge and landed on the same back outside edge.

Lutz

What it sounds like it is: A level of clumsiness that is so strong, the letter C isn’t necessary.

Translation: A toe-pick-assisted jump named after Alois Lutz, taken off from a back outside edge and landed on the back outside edge of the opposite foot. The skater glides backward on a wide curve, taps their toe pick into the ice and rotates in the opposite direction of the curve.

Salchow

What it sounds like it is: Dog food completely derived from salmon.

Translation: Named after Ulrich Salchow, it’s an edge jump taken off from the back inside edge of one foot and landed on the back outside edge of the opposite foot.

Toe Loop

What it sounds like it is: A new craze where tweens exchange friendship toe rings instead of bracelets.

Translation: A toe-pick-assisted jump that takes off and lands on the same back outside edge.

Twizzle

What it sounds like it is: The knock-off version of your favorite red rope candy that can only be found in underground markets.

Translation: A traveling turn on one foot with one or more rotations, which is quickly rotated with a continuous action.

Luge

Sport where one or two people ride a flat sled down a frozen track lying face up and feet first.

Block

What it sounds like it is: Material with flat surfaces on each side; area bounded by four streets; where Jenny’s from.

Translation: The beginning of the start motion when the athlete rocks the sled forward.

Bootie

What it sounds like it is: Pirate treasure; cute fall shoes that are shorter than boots; that honky-tonk-ba-donk-a-donk.

Translation: The name for a luge racing shoe.

Compression

What it sounds like it is: Reducing size or volume by pressing together.

Translation: The phase of the start motion after the block. The athlete uses the hips to push the sled backward.

Extension

What it sounds like it is: A part added to enlarge or prolong something.

Translation: The phase of the start motion after the pull (the forward movement of the start). The athlete extends the legs to lock into the sled.

Skeleton

Sport where a person rides a small sled down a frozen track while lying face down.

Heat

What it sounds like it is: Source of warmth; intense feelings in a moment; what Michiganders dream of in winter.

Translation: A single run down the track during a race. All Olympic races have four heats.

Line

What it sounds like it is: A narrow mark or band; the thing you forgot to say in high school drama club; cheese-puff commentary in social settings.

Translation: The fastest route down the track. A high line takes the sled close to the top lip of a turn, while a low line takes the sled closer to the bottom of a turn.

Skiing

Sport in which participants use skis to glide on snow.

Aerials

What it sounds like it is: The most amazing selfies taken with a drone.

Translation: Airborne, gymnastic-type maneuvers performed on skis. Done by freestyle skiers who first ski off a jump.

Backscratcher

What it sounds like it is: That tiger-headed stick you received over the holidays at the White Elephant gift exchange.

Translation: A move when the skier touches his back with the tails of both skis, legs together with his knees bent underneath his body and skis parallel.

Binding

What it sounds like it is: Strong covering to hold book pages together; an obligation that can’t be broken.

Translation: A binding is what keeps the athlete connected to the snowboard. Also used in skiing, a ski binding is designed to eject the skier in the case of a fall, which does not happen with a snowboard binding.

Forerunner

What it sounds like it is: A warning of something to come.

Translation: An athlete who takes a run down the course before a race to ensure that the course is safe.

Hairpin

What it sounds like it is: A stylish mechanism to fasten hair.

Translation: Two race (slalom) gates set vertically down the hill in sequence.

Mogul

What it sounds like it is: A well-known powerful or rich person.

Translation: Mounds of snow formed by skiers repeatedly turning and compacting the snow into piles.

Slalom

What it sounds like it is: A word that should never be used in a poem.

Translation: A ski race down a winding course marked by flags or poles. It has the shortest course and the quickest turns.

Super-G

What it sounds like it is: What every rapper wished to be in 1994.

Translation: Stands for super giant slalom. A speed event that requires more technical skills than a downhill race.

Tuck

What it sounds like it is: A term stolen from the Summer Olympics.

Translation: A position where the skier squats and keeps their arms close to the body to reduce wind resistance and maximize speed.

Snowboarding

Sport that involves a snowboard attached to a rider’s feet while descending a snow-covered slope.

Bone

What it sounds like it is: Those things we have 206 of in our bodies.

Translation: To straighten out one or both legs during a trick. “Boning out” a leg while grabbing the snowboard can add flair to a trick.

Chicken Salad

What it sounds like it is: The thing we ate for lunch every day in January in an attempt to follow a resolution.

Translation: Move where the rear hand reaches between the legs and grabs the heel edge between the bindings while the front leg is boned.

Cork

What it sounds like it is: A bottle stopper; a popular sound on New Year’s Eve.

Translation: An off-axis rotation. If a rider inverts twice, the trick becomes a double cork; a third invert makes it a triple cork, etc.

McTwist

What it sounds like it is: A vanilla-and-chocolate ice cream cone at that one burger place.

Translation: Named after skateboarder Mike McGill, it’s an inverted aerial where the snowboarder rotates 540 degrees or more and does a front flip.

For more translations, check out our Super Bowl commercial. 

Convincing Advantages with Standard Deduction

by Judi Monday, Your Green Valley AZ Expert

The new tax law doubles the standard deduction and it is estimated that over 90% of taxpayers will elect to use it. However, even without considering tax benefits, homeownership has convincing advantages.

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Besides the personal and social reasons for owning a home, one of the most compelling is that it is cheaper. Principal reduction and appreciation are powerful dynamics that reduce the effective cost of housing.

Amortized loans apply a specific amount of each payment to the principal amount owed to retire the loan over the term. Some people consider it a forced savings account; when the payment is made, the unpaid balance is reduced.

The price of homes going up over time is appreciation. While there are lots of variables and it is not guaranteed, it is easy to research the history of an area and make predictions based on supply and demand.

Interest rates are still low and can be locked-in for 30 years. Without considering the tax benefits at all, the appreciation and the amortization dramatically affect the “real” cost of owning a home.

Consider a $250,000 that appreciates at 2% a year for the next seven years instead of paying $2,000 a month in rent. In the example, the payment is less than the rent being paid even including the property tax and insurance.

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When you factor in the monthly principal reduction and appreciation and consider additional owner expenses like maintenance and possible homeowners association, the net cost of housing is considerably lower than the rent. In this example, reduced cost in the first year alone is more than the down payment required on a FHA loan.

Based on the assumptions stated, the down payment of $8,750 could grow to $73,546 in equity in seven years. Can you name another investment with this kind of potential that also provides you a place to live, enjoy, raise your family and share with your friends?

Use this Rent vs. Own to make projections using your own numbers and price range. We’re available to answer any questions you have and to find out what it will take to own your own home.

Ready For Retirement?

by Judi Monday, Your Green Valley AZ Expert

It can be shocking to hear how many people spend more time planning their vacation or next mobile phone purchase than planning for retirement. It is hard to imagine that they are expecting Social Security will take them through their golden years. A person who has paid in the maximum each year to social security can assume to receive about $30,000 a year.

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Every adult in the work force, should go to SSA.gov to find out what they can expect based on their planned retirement age. Since it probably won’t be the amount you need to retire comfortably, at least you’ll know how much you’ll be short so that you can devise an investment plan.

There’s an easy rule of thumb used to estimate the investable assets needed by the time they retire to generate a certain income. The target annual income is divided by a safe, conservative yield to determine the investable assets needed.

A person who wants $80,000 annual income generated from a 4% investment would need investable assets of $2,000,000. If a person had $500,000 now, they would need to accumulate $1.5 million more by the time they retire. They would need to save about $100,000 a year to be ready for retirement in 15 years.

If saving that amount does seem possible, an IDEAL alternative could be to invest in rental homes. The familiarity of rental homes like owning a personal residence can reduce some of the risk. Rentals also enjoy other characteristics like income from the operation, depreciation in the form of tax shelter, equity buildup from the amortization of the loan, appreciation and leverage from the borrowed funds controlling a larger asset. 

Some investors explain the strategy by buying good rentals with mortgages and having the tenant to retire the debt for you. Single family homes offer the investor an opportunity to meet their retirement and financial goals with an investment that is easily understood and controlled.

An Retirement Projection calculator can give you an idea of how many rental homes you’ll need to supplement your social security and other investments. 


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Judi Monday
RE/MAX Valley Properties In Green Valley, AZ
210 West Continental Road
Green Valley AZ 85622
Direct: (520) 241-7780
Fax: (520) 648-2221