Financial Options to Consider During COVID-19

We hope this message finds your family adjusting to our (temporary) new normal and that you are uncovering some peace in this slowed pace of life.  Here at The Nelson Team we are staying focused on the fact that this is temporary, and we will soon return to our old routines, likely with a renewed appreciation for the ordinary day.    In the meantime, we realize there is a lot of information being communicated and can make it difficult to know where to focus our energies.  To be a resource to our clients and friends who are experiencing financial hardship we put together a list of action items for you to consider to ease your burden.   We encourage you to seek assistance as soon as possible and want to point out that most of the below programs are not automatic, they are only available upon request, so please take action!  

Also, in any of the below suggestions, be sure to ask the financial institution if/how taking advantage of available options will impact your credit.  In most cases they will not, but be sure to clarify so you can prioritize which programs are best for you to pursue: 

 

Mortgage

Contact your mortgage servicer – the lender you send a check to every month –to see if you qualify for mortgage forebearance.   Forebearance assists borrowers who are unable to make their monthly mortgage loan payment as a result of a temporary hardship. Many servicers allow mortgage payments to be reduced or paused for a period of up to 12 months, depending on the circumstance.   The relief can apply to any type of property: primary home, second home or investment properties. Note that this is not a forgiveness of debt, once you recover financially (or the forebearance period ends) you will work with the lender on a repayment plan, which might include extending the term of the loan.  Be sure to ask about interest as usually it will continue to accrue during the forebearance period so it is to your benefit to resume payments as soon as you are able. 

 

Credit Cards

Visit your credit card company websites and read their response to their customers financial concerns.  If you need temporary assistance for your personal or business accounts typically you can request this online.  If you don’t find what you need online, call the customer service number on the back of your card to speak to a someone live but expect long wait times as the companies are overwhelmed with calls.   Below is a summary of what some credit card companies are offering: 

Waiving interest accrual or setting interest at 0%, lowering minimum payments, deferring payments, waiving late payment fees,   increasing credit lines (dependent on credit worthiness)

Before you take advantage of any of their programs ask if this will have any effect on your credit report AND ask if the line of credit will still be available to you.  Some cards are freezing the line of credit so if you need access to these funds, proceed with caution. 

If you are unable to find relief with your current issuer and you have a good credit score, consider applying for a 0% interest credit card to consolidate debt from other cards onto. 

https://www.creditcards.com/credit-card-news/credit-card-issuers-relief-coronavirus/

 

Automotive Loans

Several automakers and banks are currently offering payment deferrals for customers experiencing financial hardship.  Reach out to your lender to see what they can offer.  

As well many manufacturers and financial institutions are incentivizing new car purchases with 0% interest on terms up to 84 months with the first few months of payments deferred, so if you are in the market for a new car, now might be a good time to buy.

 

Federal Income Taxes

The deadline to file Federal AND Colorado State income taxes has been extended to July 15 for all individual returns, trusts, and corporations.  This relief is automatic, taxpayers do not need to file any additional forms or anything to take advantage of this extension.  

 

Student Loans

Borrowers with Federal student loans are able to pause those loans until September 30 and interest has been reduced to 0%. Lenders will not be garnishing wages, Social Security and tax refunds for student loan debt collection for those in default.  If you have Federal student loans this IS automatic and you do not have to do anything.  If you have private student loans contact your loan servicer and ask if they have programs to help. Note, if you are able to continue making your payments as usual, you will pay less in the end.  

https://www.forbes.com/sites/zackfriedman/2020/04/02/federal-student-aid-student-loans-coronavirus/#1957373426f3

 

Utilities

Contact all of your utility companies as many offer energy bill assistance programs which may allow you to defer payments until a later date.  

 

Other General Banking

If you have seen other fees or charges show up on your general banking accounts, reach out to them as many banks are waiving overdraft, non-sufficient funds, monthly maintenance, expedited check, debit card, excessive transaction fees.  

 

Other Financial Commitments

Our other advice is to look through your credit card and bank statements to find things that can be temporarily suspended in order to save money – gym memberships, monthly subscriptions, reduce cell phone data plan, etc. 

This information is changing daily so best option is to reach out to your lenders and ask for help but as always we are a phone call away to talk through any of these options with you!   Stay well friends!  

The CoronaVirus Solution for Buyers and Sellers with Legitimate Concerns

What Your Denver Realtors Can Do To Protect Buyers and Sellers?

During these unprecedented times, we (The Nelson Team) want to send our best wishes and thoughts to you and your loved ones.

When you buy a home, you are not just buying a house, you are buying into a community.  Our communities are being called upon to come together to protect and serve one another in ways we never have before.  In our own neighborhoods we have witnessed truly heartwarming examples of kindness during this time, neighbors rallying around their most vulnerable to deliver groceries or other necessary supplies,  bartering resources to assure everyone has what they need, providing meals or helping with childcare to those on the front lines, continuing to support their area small businesses by utilizing take away options or buying gift cards for future use and, of course, how could we not mention the Italians filling the empty streets with the beautiful sounds of hope and solidarity.

In that spirit, we are putting all our efforts into being a helpful resource to you, our valued friends and clients…..and want to make sure you know we are available to you for any real estate needs or questions, connecting you with helpful community resources, Facetime check-ins, a grocery delivery….honestly anything else you may need as we navigate these uncharted waters together.

As we do have active listings, searches and transactions, we want to assure you that we are continuing about our business, but the health and well being of our team, our clients and our community are our utmost priority.  We are taking a high level of precaution to protect everyone involved….some of the measures we instituted are as follows:

For our Sellers

  • Vetting showing requests before scheduling to assure they are serious buyers and have exhausted all digital options for learning about the property

  • Providing booties for all showings at our current or future listings

  • Adding to our showing instructions to include a request that prospective buyers not touch anything while viewing the property, limit bringing children along and wear provided booties upon entering the home
  • Restricting overlapping showings to limit the number of people in the house at one time
  • Filming a video walk-through of the property to send to prospective Buyers and Buyer’s Agent if they are not able to see the house in person
  • Suspending open houses and instead making additional online marketing resources available for our listing

  • Providing checklists for our Sellers to complete before and after a showing (ie: disinfect faucets, doorknobs, light switches, appliance handles, tables in main areas, etc.)

For our Buyers

  • Providing booties and gloves for both the Agent and Buyers when showing a property
  • Requesting our Buyers not to sit on any furniture while at a property
  • Previewing properties for you via a video walk through of the property that can be emailed to you in lieu or in advance of a formal showing

We are in the business of building communities and it is important that we all do our part to contribute positively and proactively to keeping everyone in our communities healthy. Below is a link to information from the CDC regarding protecting yourself and our community:

https://www.cdc.gov/coronavirus/2019-nCoV/index.html

Thank you, as always, for your continued support and sticking with us as we navigate through this situation together. We will emerge from this stronger and more connected than ever.  Please reach out to any of us if there is anything we can do to help you through this situation, we are here for you.

In this moment of social distancing when hugs are out….Kathy reminds us that Kindness is Free!

Cherry Creek Real Estate Community – The Nelson Team

The Nelson Team explores Cherry Creek North and talks about the real estate market in the community.

Contact us today to start your Home Buying or Selling journey! – https://denverlivinghomes.com/contact… Get a FREE Home valuation – https://denverlivinghomes.com/home-va… Start your search for your dream Home! – http://search.denverlivinghomes.com/ The Nelson Team consists of two licensed Real Estate Agents, their full-time Executive Assistant / Transaction Coordinator and a Creative Marketing Specialist. They specialize in serving the Denver metro area with a proven track record of getting results quickly and a direct line of communication at all times.

Why Is So Much Paperwork Required to Get a Mortgage?

When buying a home today, why is there so much paperwork mandated by the lenders for a mortgage loan application? It seems like they need to know everything about you. Furthermore, it requires three separate sources to validate each and every entry on the application form. Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.

There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any other time in history.

1. The government has set new guidelines that now demand that the bank proves beyond any doubt that you are indeed capable of paying the mortgage.

During the run-up to the housing crisis, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again.

2. The banks don’t want to be in the real estate business.

Over the last several years, banks were forced to take on the responsibility of liquidating millions of foreclosures and negotiating an additional million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they have to double (maybe even triple) check everything on the application.

However, there is some good news in this situation.

The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a low mortgage interest rate.

The friends and family who bought homes ten or twenty years ago experienced a simpler mortgage application process, but also paid a higher interest rate (the average 30-year fixed rate mortgage was 8.12% in the 1990s and 6.29% in the 2000s).

If you went to the bank and offered to pay 7% instead of around 4%, they would probably bend over backward to make the process much easier.

Bottom Line

Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.

5 Reasons to Sell Your House This Summer

5 Reasons to Sell Your House This Summer | MyKCM

Here are 5 compelling reasons listing your home for sale this summer makes sense.

1. Demand Is Strong

The latest Buyer Traffic Index  from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other for the same home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory is still under the 6-month supply needed for a normal housing market. This means that, in most of the country, there are not enough homes for sale to satisfy the number of buyers.

Historically, the average number of years a homeowner stayed in his or her home was six, but that number has hovered between nine and ten years since 2011. Many homeowners have a pent-up desire to move, as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners are granted the freedom to move.

Many homeowners were reluctant to list their home over the last couple of years for fear that they would not find a home to move in to. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you to decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. Buyers know exactly what they can afford before home shopping. This makes the entire selling process much faster and simpler. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 43 days. (Last numbers available.)

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has created a buyer’s market. This means that if you are planning on selling a starter or trade-up home, it will sell quickly, AND you’ll be able to find a premium home to call your own!

According to CoreLogic, prices are projected to appreciate by 4.8% over the next year. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

5. It’s Time to Move on with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to start living the life you desire.

That is what is truly important.

Top 4 Renovations for the Greatest Return on Investment! [INFOGRAPHIC]

Top 4 Renovations for the Greatest Return on Investment! [INFOGRAPHIC] | MyKCM

Some Highlights:

  • If you are planning on listing your house for sale this year, these four home improvement projects will net you the most Return on Investment (ROI).
  • Minor renovations can go a long way toward improving the quality of your everyday life and/or impressing potential buyers.
  • Whether you plan to stay in your house for a long time or just a few years, it’s smart to know which home renovations add the most value.

Time for Your Dream Home, Gen X!

Time for Your Dream Home, Gen X! | MyKCM

During the housing market crash, Gen X homeowners lost more wealth than other generations. However, things are changing now! A strong economy, increasing home prices, and the recovery of the housing market are helping this generation to regain their lost wealth.

According to Pew Research Center,

Their fortunes have rebounded more than those of other generations during the post-recession economic expansion and as home and stock prices have risen. Since 2010, the median net worth of Gen X households has risen 115%. In fact, in 2016, the most recent year with available data, the net worth of a typical Gen X household had surpassed what it was in 2007 ($84,200 vs. $63,400)”.

The same report also mentioned,

15% of Gen X’s homeowners were ‘underwater’ on their homes in 2010 (meaning they owed more than they owned). By 2016 only 3% were underwater.

As a result of homes regaining market value and their increasing net worth, many Gen Xers are presented with the opportunity of selling their current home in order to move up to the house they always dreamed of!

According to the 2019 Home Buyers and Sellers Generational Trends Report by the National Associations of Realtors, in 2018 Gen Xers made up the second largest share of home buyers by generation at 24%.

The report also provided some highlights about their purchase:

  • Greatest share that purchased a multi-generational home (16%).
  • Largest share that purchased a detached single-family home (88%).
  • Highest median household income ($111,100).
  • Bought the most expensive homes of all the generations.
  • Job-related relocation was identified as the primary reason to buy.

But this generation is not only buying- they are selling too!

  • Largest share of home sellers (25%).
  • Highest median household income among sellers ($123,600).
  • Tenure in the previous home was a median of 9 years.
  • House too small was indicated as the primary reason to sell.
  • 91% sold the home using a real estate professional.

Bottom Line

If you are a Gen Xer who would like to know exactly how much your house is worth today so you can move up to the home of your dreams, let’s get together to analyze your current circumstances.

Renting or Owning, What Is Better for You?

¬Renting or Owning, What Is Better for You? | MyKCM

In a real estate market where home prices are rising, many have begun to reexamine the idea of buying a home, choosing instead, to rent for a while. But often, there is a dilemma: should you keep paying rent, knowing that rent is rising too, or should you lock in your housing cost and buy a home?

Let’s look at both scenarios and analyze the pros and cons of each:

Renting

With the housing market crash in 2008, many homeowners lost their homes and became renters. According to Iproperty Management, “the number of households renting their home … rose from 31.2% of households in 2006 to 36.6% in 2016”.

Some choose to rent because it is more convenient for their lifestyle. Those whose job requires frequent moves need the flexibility that a 6-12 month lease agreement gives them so they can move to their next assignment!

Many renters believe that renting is cheaper because they do not have to pay for maintenance and repairs. (Not true! Landlords work those expenses into your rent and other fees). Another reason many rent is that they feel like they cannot afford the down payment and closing costs required to buy a house, due to their inability to save much after paying their monthly expenses.

That can be true! Nearly 1 in 4 renters spend at least half their household income on rent. In 2017 the “severely” burdened renters’ rate was 24.7% with 24.9% reporting they were “moderately” burdened.

Renting also brings some financial disadvantages. Homeowners can take advantage of tax deductions that let them claim their property taxes and mortgage interest. Additionally, there is a big risk that your rent will go up every time you renew your lease, as we know the median asking rent has been increased steadily since 1988!Renting or Owning, What Is Better for You? | MyKCMOne of the major challenges with renting is that you don’t have a space to call your own. When you rent, you are paying your landlord’s mortgage, and therefore they are the beneficiaries of the equity gained from paying that mortgage.

Now let’s explore the other side: Homeownership

In the past, we have mentioned the many financial and non-financial benefits of becoming a homeowner. So, let’s just focus on the one big difference between renting and owning, the ability to lock in your housing cost!

Assuming you will have a fixed-rate mortgage, your costs are predictable! You will know exactly what your mortgage payment will be for the next 15-30 years. The homeownership rate in 2018 was 64.4%, and has been on the rise. Those households locked in their housing cost rather than wait for their landlord to raise their rent again!

What are the disadvantages of owning a home? Well, it is a long-term financial commitment! It is not easy to pack quickly and move. You will need time and good planning to do it in a short amount of time.

You need to save your money! Getting a mortgage requires a down paymentclosing costs, and moving expenses. Again, that will require some savings and planning!

Unless you have a homeowner’s association (HOA) (and you pay an HOA fee) or a home warranty, you will be responsible for maintenance and taking care of the home. This may range anywhere from regular landscaping to major repairs.

Bottom Line

Like everything in life, there are pros and cons. What is better for you depends on your situation! If you are interested in becoming a homeowner and want to discuss the pros and cons, let’s get together to help you review your current situation and answer any questions you may have!

3 Things to Know in the Housing Market Today!

3 Things to Know in the Housing Market Today! | MyKCM

A lot is happening in the world, and it’s having a direct impact on the housing market. The reality is this: some of it is positive and some of it may be negative. Some we just don’t know yet.

The following three areas of the housing market are critical to understand: interest rates, building materials, and the outlook for an economic slowdown.

1. Interest Rates

One of the most important things to consider when buying a home is the interest rate you will be charged to borrow the money. In our recent post we posed the question, “Are Low Interest Rates Here To Stay?” The latest information from Freddie Mac makes it appear they are. We are currently at a 21-month low in interest rates.3 Things to Know in the Housing Market Today! | MyKCM

2. Building Materials

Talk of tariffs could also affect the housing market. According to a recent article, the National Association of Home Builders reports that as much as $10 billion in goods imported from China are used in homebuilding. Depending on the outcome of the tariff and trade discussions between several countries, there could be as much as a 25% boost in the cost of building materials.

3. Economic Slowdown

In a prior blog post on this topic, we began the year with many economic leaders thinking we could expect a recession in late 2019 or early 2020. As spring approached, we reported that economists had started to push that projection past 2020.  Now, three leading surveys indicate that it may begin in the next eighteen months.3 Things to Know in the Housing Market Today! | MyKCM

Bottom Line

We are in a strong housing market. Wages are increasing, home prices are appreciating, and mortgage rates are the lowest they have been in 21 months.  Whether you are thinking of buying or selling, it’s a great time to be in the market.

2 Myths Holding Back Home Buyers

2 Myths Holding Back Home Buyers | MyKCM

Freddie Mac recently released a report entitled, “Perceptions of Down Payment Consumer Research.” Their research revealed that,

“For many prospective homebuyers, saving for a down payment is the largest barrier to achieving the goal of homeownership. Part of the challenge for those planning to purchase a home is their perception of how much they will need to save for the down payment…

…Based on our recent survey of individuals planning to purchase a home in the next three years, nearly a third think they need to put more than 20% down.”

Myth #1: “I Need a 20% Down Payment”

Buyers often overestimate the funds needed to qualify for a home loan. According to the same report:

22% of renters and 31% of homeowners believe lenders require 20% or more of a home’s sale price as a down payment for a typical mortgage today. And,

“If a 20% down payment was required, 70% of those who were planning to buy a home in the next three years said it would delay them from purchasing and nearly 30% indicated they would never be able to afford a home.”  

While many believe at least 20% down is necessary to buy the home of their dreams, they do not realize programs are available which permit as little as 3%. Many renters may actually be able to enter the housing market sooner than they ever imagined!

Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

Many either don’t know or are misinformed concerning the FICO® score necessary to qualify, believing a ‘good’ credit score is 780 or higher.

To debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.2 Myths Holding Back Home Buyers | MyKCMAs indicated in the chart above, 52.4% of approved mortgages had a credit score of 600-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.