International Home Buyers

There are two types of international buyers. Recent immigrants to the U.S. and non-residents who buy an investment or vacation property. Five countries account for 51 percent of overseas purchases: Canada, China, India, Mexico, and the United Kingdom. Housing sales to international buyers makes up about 4 percent of homes sold. Chicago’s international appeal are its universities, transportation network, diversified economy and educated workforce. International buyers like properties in the U.S. because of the political and economic stability. In many cases, it is more affordable to purchase property in the U.S. than in the buyer’s home country. But buying property in the U.S. is a long and exacting process for international home buyers. They deal with government and bank regulations concerning money transfers and down payments. Mortgage financing is a substantial hurdle because their financial profiles differ from what lenders are used to seeing for most residential applicants. As a result, about 55 percent of international buyers paid for their home in cash. International buyers have very specific criteria and are now selecting homes from comprehensive data, photos and video of the home on the internet.

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Easier Home Buying for Graduates

Recent graduates paying off student debt can find it difficult to save enough cash for a down payment. In addition, their high debt-to-income ratio may make it difficult to qualify for a mortgage. Fannie Mae announced several new policies in April aimed at helping graduates qualify for a mortgage. The first initiative can help borrowers who already own a home to convert their student debt into housing debt that carries a lower interest rate. The second initiative has the potential to change the way a graduate’s debt-to-income ratio is calculated, making it easier to qualify.

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Buying a Summer Home

The economy has improved to a point that people are again considering the purchase of a summer home. The primary motivation for a vacation home purchase is, well, vacation. The happiest vacation home owners love spending their vacation in one place, may likely retire there, have done their homework, and made the decision that the vacation home works for them. Getting any rental income on the property is upside. Some people are too optimistic about rental rates, vacancies, property management fees, maintenance, repairs and housekeeping. When you include the fixed costs of real estate taxes, insurance, utilities, and association fees, it could be difficult to generate a true “income” from a vacation home, but it may offset some expenses.

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Getting to a Smaller Lifestyle

Many of us want to reduce the amount of stuff we have, but struggle on how to take the first step. This sure-fire method works over time, and its impact is greater if you take a really big first step.

  • Take everything in a room and put it in a storage box. Everything. Label the boxes so you know what is where.
  • Now look at the furniture you have in the room. Remove any piece that is not in good condition, not used, or not necessary.
  • If you need something that you packed away, reclaim it from the box and leave it out for future use.
  • Over time, you will take back a number of items from the storage boxes, but you will recognize the things that you use regularly. After one year, whatever is left in the boxes are things that you don’t use. Sell, donate or give them away.
  • The tougher decisions will be on the keepsake items that have sentimental value but never looked at. Make the tough decisions on what to keep.
  • If you haven’t started already, begin again on the next room, and the next, and the next.

In the end, you will have a cleaner less cluttered lifestyle and a more efficient home to maintain.

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Getting Rid of Private Mortgage Insurance

If you bought a house with a down payment of less than 20 percent, your lender required you to buy mortgage insurance. Mortgage insurance reimburses the lender if you default on your home loan. The borrower pays the premiums. Here are several options to get rid of mortgage insurance.

  • If your home value has increased enough, you can refinance to a new mortgage without mortgage insurance. This is a nice option if interest rates have gone down.
  • If you like your current mortgage, a new appraisal can determine whether you meet the 20 percent equity threshold and have the mortgage insurance removed.
  • If you have not yet reached the 20 percent equity threshold to remove mortgage insurance, consider adding to your monthly payment to build equity faster.
  • Remodel your home to increase its value and decrease the loan-to-value ratio to achieve the 20 percent equity threshold.
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Retiring to a College Town

We have had a number of clients retire to college towns. These are the most popular reasons.

  • Universities offer some of the most interesting and diverse continuing education
  • A university with a strong NCAA team is energizing to the community. Go Wildcats!
  • Patrons of the arts and sciences can enjoy high quality theater, music, dance  and lectures at minimal cost
  • Guest speakers on a variety of topics and experiences are invited to speak throughout the year
  • Small university communities feel big as they attract high quality stores and restaurants
  • Amazing infrastructure is developed in support of the university and extends to the community, such as healthcare, communications, and public transportation

The primary reason for most retirees is to be closer to extended family in the same area. Selecting the right college town takes some research. Big 10 universities can seem overwhelming to some, while small private colleges can lack some of the features you look forward to.

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How Do Automated Valuation Tools Work

Automated valuation tools found on-line, are usually data driven algorithms that rely on data available from public and private sources, such as a county assessor and the multiple listing service. The data used to automatically estimate a home’s value may include zip code, square footage, school district, bedrooms, bathrooms, and prior sales within an area. What they are not able to evaluate are key aspects of a property including condition, updates, location (next to a park or a gas station), type of construction, the builder, sub-division, or the local market condition. If there are several similar sales in the same area, they can be accurate. If not, there could be a significant difference in the automated versus market value.

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