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Published: Wednesday, March 07, 2018 @ 2:55 PM
— If you're a millennial (born between the early 1980s and the 1990s), you may not necessarily fall in line with older folks who in their 20’s and 30’s automatically assumed that buying a home was the epitome of the American dream.
Some millennials prefer to rent, while others want to become homeowners but don't feel as though they're ready.
Although the rate of homeownership in the U.S. is lowest for the 35 and younger age group, it's on the rise, increasing from 34.7 percent to 36 percent in the last year alone.
Can you find a home that doesn't need work?
Millennials often find themselves saddled with student loan debt. Combine that with stagnating wages and many don't have a lot of extra cash to make changes to a home soon after moving in, according to Inc.
If you've saved for a down payment and don't have a lot of cash left over, you may not be able to afford improvements anytime soon. Consider whether you'll be happy living in a home as it is for several years, as new appliances, flooring and other features may strain your budget.
What extra expenses will you have?
Although the interest you'll pay on your mortgage is generally tax deductible, you'll need to be able to pay for some extra expenses if you decide to buy a home.
You'll need homeowner's insurance, which usually costs around $700 per year on a $200,000 home. You'll also need to pay private mortgage insurance (PMI) if you make a down payment of less than 20 percent on your home. This usually costs between .5 percent and 1.2 percent of the loan value. You'll also owe property taxes and need to pay for regular maintenance and repairs, as well as any larger issues that crop up, such as replacing a roof or furnace.
How long do you plan to stay in your residence?
If you're a renter, it can be a lot simpler to pick up and move for a new job or an adventure in another part of the state or country, according to Forbes. You won't have to worry about selling your current home before you can move to a new one, and the process of moving is generally much quicker and easier. This flexibility can be important to millennials, who often value experiences over possessions.
Experts usually say you need to be prepared to live in your home for at least five years. If you sell before then, your home won't have had much time to appreciate, and you aren't as likely to recoup expenses such as closing costs.
What are your priorities?
Figuring out what's most important to you can go a long way toward determining whether you should buy or rent. Homeownership is very important to some buyers, and it's often recognized as a way to build wealth over the years. Self-made millionaire David Bach told CNBC Make It that "buying a home is the escalator to wealth in America. Homeowners are worth 40 times more than renters."
Millennials, however, are sometimes skeptical about the financial advantages of homeownership since they've seen some of the results of the housing crisis, including falling values and foreclosures. And they tend to place lifestyle pleasures ahead of homeownership, with nearly half of millennials saying they'd rather spend money on traveling than on homeownership. The same is true of small luxuries such as eating out, which are more important to millennials compared to older respondents.
Is there a third option worth considering?
Renting a detached home or townhome is becoming an increasingly popular option, according to USA Today. Although it's certainly not exclusive to this age group, millennials have led the trend. This can be a good choice since you avoid making a long-term commitment and don't need to save for a down payment or pay for maintenance and other expenses associated with buying a home.
This type of rental can be a good middle ground, allowing you to have flexibility while seeing what it would be like to live in a home or townhome instead of in an apartment.
Published: Saturday, April 07, 2018 @ 11:00 AM
TURTLECREEK TWP. — An archaeologist and other specialists in the collection and preservation of historic relics should begin work this week at the proposed Warren County Sports Park at Union Village.
Terracon, a South Carolina-based consultant already doing soil testing on the 120-plus acre site, has been hired by the county’s port authority to dig up two privies (outdoor toilets) dating back to two centuries.
Last week, the port authority board approved a contract for up to $87,000 in services to be completed over the next 90 days, as heavy equipment continues laying out the the $15 million sports park, financed through an increase in the lodgings tax.
The contract is the result of discussions between county officials, and the Ohio Department of Natural Resources and the Ohio History Connection/State Historic Preservation Office. The state has standing to weigh in on the development due to the fact that state funds are being used in the project
“Preservation is always our preference, however, that’s not always possible. In those cases we pursue mitigation solutions,” Emmy Beach, public relations manager for the Ohio History Connection said in an email.
The area to undergo the archaeological examination, located on about six acres on the south side of the development site, is known as the North Family Lot Site of Union Village, a 19th century Shaker settlement.
The site was discovered in 2004 when a sharp turn in Ohio 741 was straightened by the Ohio Department of Transportation.
The archaeological work is expected to force a shift in the work plan, but not a delay in progress, on the sports park, expected be opened later this year.
“We’re just trying to be as cooperative as possible,” Matt Schnipke, secretary of the port authority, said on Monday before the port board approved the contract.
Terracon contracted to analyze up to 4,000 artifacts from the former privy sites, across Ohio 741 from the entrance to Armco Park.
“The artifacts, notes, photographs, maps, and other project-related materials will be returned to Terracon’s archaeology laboratory for processing upon completion of the field studies. Artifacts will be analyzed by relative provenience, sorted by technological and functional categories, and classified using accepted regional typologies and classification systems. Artifacts will be cataloged and entered into a computer database and detailed descriptions will be provided as part of the report appendices,” the company stated in a letter outlining contract terms.
While cooperating, county officials opted against turning the project over to the state.
At last week’s meeting, Schnipke looked forward to the report being complete in 60 days and indicated it would be up to the port authority to decide what to do about the relics.
Schnipke told board members, most of whom were listening via teleconference, “this isn’t necessary to begin with,” based on discussions with lawyers over the extent of the state’s influence there.
Last week, Beach said the state was unable to comment on the steps being taken by the county on the project.
“We don’t have the plans from port authority, so we can’t yet provide guidance or recommendations to them,” she said.
Martin Russell, director of the port authority and deputy county administrator, said work would continue on the rest of the site, while they awaited the report on the archaeological dig.
Published: Thursday, April 05, 2018 @ 12:57 PM
— The idea of a reverse mortgage certainly sounds good: a person who is 62 or older is able to borrow against their home's equity in a legal arrangement that lets them tap cash for retirement or vacations without having to sell (or vacate) the family home.
But is it too good to be true?
"A reverse mortgage loan can help some older homeowners meet financial needs, but can also jeopardize their retirement if not used carefully," according to Debt.org, a debt consolidation and advice provider.
In the past couple of years, the popularity of reverse mortgages has soared, though they still only account for 1 percent of the $11.5 trillion in U.S. mortgages.
After a plummet in reverse mortgages following the recession of 2008, "the past few years have seen a turnaround," according to Debt.org staff writer Bill Fay. "The number of eligible applicants – people over 62 – is expected to go from 46 million now to 98 million in 2060."
Fay said that the booming senior population (not to mention the television and print ads featuring Baby Boomer favorite Tom Selleck of Magnum P.I. and Blue Bloods fame) have helped make reverse mortgages popular again.
But Fay cautioned those who are old enough for a reverse mortgage not to base their whole decision on talk from Tom Selleck, who assures viewers, "It's not another way for banks to get your house, and it's also not too good to be true."
That's easy for Selleck to say: the “Magnum P.I.” star has an estimated net worth of $45 million. "The industry is steeped in promises, controversy and cautionary tales," Fay warned. "If you're considering getting a reverse mortgage, the best way to ensure a happy story is to educate yourself."
How a reverse mortgage works
According to U.S. News, a reverse mortgage lets you borrow against your home's equity so you receive cash without selling your home. This money can be paid in a lump sum, regular payments staggered over time or via a line of credit that allows you to take out money as needed. The key factor that appeals to so many people, according to U.S. News, is that "you do not need to pay back your reverse mortgage as long as you continue to live in your home, and you do not have to make any payments on the loan." Be warned, however, that "you will need to keep up with other housing costs like property taxes, homeowners insurance, repairs and association dues."
When the loans come due
The short answer: when you die. "Your heirs can pay off the loan balance if they want to keep the property or they can let the lender keep the property to settle the debt," U.S. News explained. If you move out of the home or start living somewhere else as your primary residence, you must repay the loan, ordinarily by selling the home. "The lender considers that you changed your residence if you live outside your property for more than six months in a year for nonmedical reasons or 12 consecutive months for medical reasons."
The types of reverse mortgages
Home Equity Conversion Mortgages (HECM) are the most common type, offering federal backing, limits on some fees and the ability for the borrower to spend their loan moneys however they want. HECMs do restrict eligibility and limit borrowing to the FHA maximum loan limit, which was $679,650 in 2018. Proprietary Reverse Mortgages are similar, but they have fewer restrictions and no government guarantee. Single-Purpose Reverse Mortgages involve the lender restricting how you can use the money from the reverse mortgage and tend to be the least expensive. They are offered by some state and local governments and nonprofits, and are typically only available for low- and moderate-income borrowers, according to U.S. News.
Who is a good candidate for a reverse mortgage:
"If you own your home and don't have much savings or need an infusion of cash, a reverse mortgage has some advantages," Fay explained. The most notable is its ability to ease the strain on your monthly budget, especially when you need it to supplement Social Security or help handle mounting medical expenses.
Who is not a good candidate for a reverse mortgage:
"A reverse mortgage is a questionable proposition if you have sufficient income to pay your bills or are willing to sell your home to tap into the equity," Fay said. "If that's the case, it may make more sense to just sell it and downsize your home." And because reverse mortgages can be expensive loans, it may make more sense to weather a temporary shortfall than take on a costly debt. "A reverse mortgage is also not a great idea if you want to leave your home to your heirs," Fay added. "They can still inherit the home, but they'd have to pay a mortgage debt that has been mounting instead of dwindling."
Who is a terrible candidate for a reverse mortgage
Published: Monday, April 02, 2018 @ 6:24 PM
DEERFIELD TWP. — The Warren County Port Authority voted to subsidize development of a 242-unit apartment building to launch a mixed-use community in southern Warren County.
In a teleconference meeting Monday, the board approved a resolution agreeing to enable developers of the building as much as $750,000 in sales tax savings on the $28 million, 242-unit apartment building - the first of 12 proposed at the District at Deerfield.
The vote, conditional on obtaining a letter of support and development agreement demonstrating Deerfield Twp.’s support for the deal, was cast in the absence of board member Dave Bolton, who questioned the deal last week.
“I don’t see how that’s economic development,” Bolton said during a meeting last Monday. “I don’t understand why this money is being spent by the public.”
With two members absent, the board approved 5-0 a resolution to enter into leases with the developer, Silverman and Co. The leases and other agreements needed to seal the deal were not approved on Monday.
The 28-acre District at Deerfield would join a handful of walkable, planned communities in the area, including The Greene, Austin Landing, Liberty Center and the proposed Austin South Springboro.
West of the Fields-Ertel-Mason-Montgomery Interstate 71 interchange, the District at Deerfield is to include $140 million in development, including a two-acre public square and an entertainment district, brewpubs, retail and restaurants.
Published: Monday, April 02, 2018 @ 12:42 PM
— You're probably not trying to purchase a million dollar dream house as a first-time buyer, but coming up with the funds for your first home can make even a modest house seem out of reach.
"The top challenge for would-be homebuyers is the down payment requirement," The Mortgage Reports blog reported, citing a study from Trulia. "Over half of potential buyers claimed saving a down payment was a bigger issue than credit scores, income needed or housing prices."
There are ways to drive down the cost of a first home and to get the down payment into the 3 percent range. This is not one of those times when you can just put away a little here, a little there. You'll need to figure out exactly how much you'll need and then set a time frame for savings.
It may also require some creativity. Consider these tips to help save for your first house:
Keep the change
This is one of those "every little bit helps" endeavors, according to Realty Times. You can combat the discretionary spending that invades your savings by getting used to paying for daily expenses with cash. Keep all the coins from each transaction and put them aside at the end of the day.
"You'll be surprised how it can add up over a few months," RT noted.
Shop for a better savings account
Any serious savings plan should involve a careful choice of savings accounts. "Some banks offer special rates or even kick in money if you open a new account and maintain a certain balance," RT noted. "If you already have a good head start on your down payment, this could be a great way to get a bump." While you're evaluating your options, note any fees you regularly pay at your current bank. Try to negotiate to have them eliminated, and if you can't, it might make sense to open fee-free accounts elsewhere.
Spend some money repairing your credit
This suggestion seems contrary to your goals, but it actually makes sense. If you can spend a couple thousand dollars driving down critical financing numbers like the percent of available credit you're using or the number of collections you have active, you may be able to improve your buying position. That could lower your interest rate and the amount of money you'll need for a down payment.
"A conversation with your lender or broker and a detailed look at your credit history may yield some surprising suggestions," RT noted.
Make your coffee at home
The math is simple, though the habit can be hard to break. Coffee from Starbucks or another similarly priced café can mean spending upwards of $4 a day per person. That's hundreds of dollars a month that could be going towards your down payment.
Quit the gym
This tip from Blue Water Credit may seem brutal, but you could save $400 or $500 a year if you dropped the gym membership. "Instead, set up a workout area in the garage or the basement and get back to basics, or coordinate a fitness group with friends in a park," BWC advised.
Move in with your parents
Yikes! It's drastic, for sure, but if it helps you save for that down payment more quickly, it's worth it, BWC noted. "By not paying rent for a few months, you'll probably be able to pocket your whole down payment in short order. And remember that when you start looking for a home, make an offer, and go through the escrow and closing process, you can't anticipate if it will take 6 weeks or 6 months, so you'll have the ultimate flexibility by not being locked into a rental lease."
Get a roommate
If the "moving in with the 'rents" thing isn't an option (or would affect your sanity), consider clearing a spare room in your current rental and getting a tenant.
"The extra money – often $400 or $500 a month for one room – can make a big dent in your down payment," BWC noted.
Get rid of the new car
This is another "tough love" savings suggestion from BWC.
"It's not a popular suggestion, but would you rather have a new car or a new house? Sell your new car and buy a reliable used model and put the savings towards your down payment. You may even be able to go from two cars in the household to one, carpooling, using public transport or even biking to work."
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