Building wealth

Buying a Home Early Can Significantly Increase Future Wealth

Buying a Home Early Can Significantly Increase Future Wealth | MyKCM

According to an Urban Institute study, homeowners who purchase a house before age 35 are better prepared for retirement at age 60.

The good news is, our younger generations are strong believers in homeownership.

According to a Freddie Mac survey,

“The dream of homeownership is alive and well within “Generation Z,” the demographic cohort following Millennials.

Our survey…finds that Gen Z views homeownership as an important goal. They estimate that they will attain this goal by the time they turn 30 years old, three years younger than the current median homebuying age (33).”

Buying a Home Early Can Significantly Increase Future Wealth | MyKCMIf these aspiring homeowners purchase at an early age, the Urban Institute study shows the impact it can have.

Based on this data, those who purchased their first homes when they were younger than 25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-20s and early-30s had close to $50,000 left, but traditionally purchased more expensive homes.Buying a Home Early Can Significantly Increase Future Wealth | MyKCMAlthough the vast majority of Gen Zers want to own a home and are somewhat confident in their future, “In terms of financial awareness, 65% of Gen Z respondents report that they are not confident in their knowledge of the mortgage process.”

Bottom Line

As the numbers show, you’re not alone. If you want to buy this year but you’re not sure where to start the process, let’s get together to help you understand the best steps to take from here.

Winter Cleaning!

House cleaning product on wood table

Pro Tip: If you clean and organize your home during Winter, when Spring gets here you won’t have to do it! Plus, who wants to be stuck inside cleaning when the birds start chirping and the sun starts shining past 4 o’clock?! Not I. So! Without further ado, here are the best (100% FREE!) tips for cleaning and de-cluttering your home today.

 

  1. Get rid of things you don’t use! Your local shelter will take all that stuff off your hands and give it to people who need it, assuming it’s in usable condition. An easy way to decide whether or not you need something is if you’ve used it in the last year. With your clothes, you can turn all the hangers around backwards and whenever you wear something, turn the hanger back and after a year, you’ll see just how much you don’t really wear!
  2. No Junk Drawers. Drawers are so easy to stuff things in. Out of sight out of mind, right? Try using a drawer organizer, or put a non-slip liner in and use small decorative bowls and plates!
  3. Always work from Top to Bottom.  Clean ceiling fans and ceilings first, it will prevent you from having to dust or clean things twice. Vacuum last, and always use a HEPA filter.
  4. Wipe Everything Down. Walls, windows, kitchen cabinets, shower tile, appliances, TV’s, try one of these household cleaners.
  5. Wash (or Dry) everything.  Wash the bedding, the extra blankets, the curtains if labels allow, throw the pillows in the dryer for 15 minutes. Sprinkle some baking soda on your bare mattress and vacuum it up after 15 minutes. I promise you’ll sleep better tonight.
  6. Set Limits! Nobody needs forty-two different size screws and throw that magazine away, you’re not going to read it. Let your space allow for limits, if you can’t find a place for it that’s practical, get rid of it.

Driving in a Winter Wonderland

car accident

 

Every year I am more and more flabbergasted by my ancestors’ choice to settle in such horrid and cold conditions. Did they not know Texas was there? *Sigh*  Maybe someday I’ll write blogs about the best sunscreen to use year-round or how to plant a garden in mid-December. But until I can move south (As South as I possibly can, perhaps the Yucatan Peninsula, I bet it’s never snowed there) I’ll share with you a few tips for Driving in this icy, messy, blizzard-y weather.

  • First and foremost, Defensive Driving. Be aware of your surroundings, use your peripherals, mirrors and other eyes in the vehicle. Watch out for other vehicles that have maybe lost control or seem to be sliding.
  • Keep your distance. The only accident I’ve ever been in (knock on wood) was a rear-end collision because someone behind me was following too close and the street was icy. Experts say (what constitutes an expert in winter driving? I would like to put my name in the bowl!) you should leave at least FOUR car lengths between you and the car in front of you if possible. This should give you plenty of room to stop short, if need be.
  • Correct yourself correct. If tragedy strike and you DO start to slide, RELEASE THE GAS OR BRAKE PEDAL! I know your first instinct will be to brake; RESIST!!! Another instinctual movement would be to turn left if you’re sliding right. WRONG. Turn about a half a crank of the wheel in the same direction you’re sliding. This may not be necessary, though, as letting off the brake will usually work.
  • Don’t stop if you don’t have to. If you’re driving slow enough you can probably avoid most stops, short of red lights or trains….do trains run in the snow?! I don’t know!
  • AWD. All Wheel Drive. That means all 4 of your tires are working simultaneously toward the same goal, thus obviously making it much easier for your vehicle to get around, especially in snow and ice. Most Crossovers and SUVs come with 4 Wheel Drive built-in, but if you’re in the market for something less “macho”,  AWD is standard in almost every Subaru ever built. Bonus: Subaru makes pretty stylin’ station wagons, and who doesn’t love those??
  • Stay Home. This becomes increasingly hard the older I get. I just want to go to the grocery store without risking frostbite on my fingers! But honestly, if you’re scared to drive, just don’t. You’re not only putting yourself at risk, but other drivers and passengers, too. Plus, you can pretty much get ANYTHING delivered nowadays. Even Wal-Mart delivers. And like everyone’s grandma used to say, Better Safe Than Sorry!

 

Smaller is popular


Big Demand for Small Homes

Big Demand for Small Homes | MyKCM

Movies, tv shows, and celebrities often have us dreaming of owning large homes, but the reality for most people is quite different.

Since 2015, the square footage of newly built houses has been shrinking, according to Yahoo Finances. This is not projected to change as we continue into the beginning of the year.

“We expect this downsizing trend to continue in 2020, driven by a confluence of economic and demographic trends.”

Why are smaller homes trending now?

As noted in the article, there are a few main reasons for this demand:

  • “Many of today’s younger, millennial home buyers have expressed a preference for denser, more urban homes that are more walkable to shared amenities.”
  • “Today’s older homeowners are expressing a desire for smaller, less maintenance-heavy and more accessible (read: less stairs) homes as they age and move into newer homes.”

With these two demographic groups surging through the market, the demand for this type of home is rising. If you’re a homeowner with a smaller-scale house, now may be a great time to sell, as the demand for this end of the market is surely on the rise.

Bottom Line

The demand for smaller houses will continue to rise throughout 2020. Let’s get together to discuss what the housing inventory looks like in your neighborhood. It might be time for you to take advantage of this trend!

Can You Write That Off?

 

money people

First of all, I would like to remind you the difference between a tax deduction and a tax credit. A tax deduction cuts the amount of income you’re taxed on, and a credit cuts your tax bill directly.  Now that we’ve got that figured out, let’s look at the top tax deductions most people can use:

 

  • Business Expenses – If you’re running a business, there are certain expenses you can write off, just click that link!

 

  • Student Loan Interest – Who doesn’t have these nowadays?! If you paid off a certain amount and have an AGI (Adjusted Gross Income) under a certain amount, you may be able to deduct up to $2,500 of that interest! Check this link to see if your payments qualify.

 

  • Mortgage Interest – How. Exciting! Note that you will have to itemize your deductions if you want to write this interest off. You can’t claim the standard deduction. You can actually write off the interest you pay on the first $750,000 of your mortgage ($375,000 if married and filing separately) if you purchased your home between December 16, 2017 and January 1, 2026. If you bought your home previous to that date, you can deduct the interest you paid on up to $1 million ($500,000 if married filing separately) of your mortgage.

 

  • Medical and Dental Expenses – You will also have to itemize your deductions in order to write off these expenses, but if they exceed 10% of your AGI, they are deductible! And almost ALL medical and dental expenses fall under this category. Check right here to see what you can and can’t write off.

 

  • Charitable Contributions – It literally pays to give back! Again, you’re going to have to itemize your deductions for this one.  Almost every penny you have donated can be deducted. You will need proof of these from whomever you donated to, so make sure you get receipts! You can find more information on this deduction right here.

 

  • Traditional IRA Contributions – You don’t have to itemize your deductions for this one, which makes everything so much easier. If you’ve saved money in a traditional IRA you may be able to deduct up to $6,000 ($7,000 if you’re over 50 years of age) and also have an AGI under a certain amount. Click here to see your limits.

 

  • HSA Contributions – If you had a Health Savings Account in 2019, you may be able to deduct what you put in. Here is a great article about HSA’s and the write offs.

 

Friendly Reminder that the deadline to file your taxes is April 15, 2020! Hopefully these deductions will make it a little easier to do!

 

 

The Biggest Issue Facing Housing Next Year

The Biggest Issue Facing Housing Next Year

The Biggest Issue Facing Housing Next Year | MyKCM

This coming year the housing market will be defined by 3 things- inventoryinterest rates, and appreciation.  But the biggest issue the housing market will face in 2020 is an inventory shortage.  There aren’t enough homes on the market for buyers, especially on the lower end of the market. This is a topic that has come up frequently within the past several months.

Based on what is forecasted, we know that interest rates are projected to remain low and that appreciation is expected to continue as we move into 2020.  Additionally, the upcoming election will provoke many unique perspectives on the health of the US housing market. The challenge will be understanding what is actually happening and how you can best position yourself if you are thinking of buying or selling your home.

Here are several perspectives to consider on the inventory issue facing housing next year:

According to realtor.com:

“Despite increases in new construction, next year will once again fail to bring a solution to the inventory shortage that has plagued the housing market since 2015. Inventory could reach a historic low as a steady flow of demand, especially for entry level homes, and declining seller sentiment combine to keep a lid on sales transactions.”

Diana Olick at CNBC:

“Inventory has been falling annually for five straight months, after it recovered slightly toward the end of last year, due to a spike in mortgage rates. Rates began falling again by spring of this year. Homebuilders have been increasing production slowly, but it’s not enough to meet the increasingly strong demand.”

George Ratiu, Senior Economist with realtor.com

“As millennials — the largest cohort of buyers in U.S. history — embrace homeownership and take advantage of this year’s unexpectedly low mortgage rates, demand is outstripping supply, causing inventory to vanish. The housing shortage is felt acutely at the entry-level of the market, where most millennials are looking to break into the market for their first home.”

Bottom Line

The most important thing you can do is understand what is happening in your local market. You may not be able to avoid some of the issues brought on by low inventory, but you can be educated and prepared. Let’s connect and discuss the options that make the most sense for you and your family.

What to get the Kid who has Everything

FryeKidsScreenTime_0224

“Back in my day, kids played outside!”

“We didn’t have any screens to stare at when we were kids.”

We all have our feelings about “kids these days” and their technology, but it’s not going anywhere. Computers are only advancing and every generation will rely on it more and more. So, most kids already have a PlayStation, an XBox, an iPad, an iPhone, a smart watch, something to keep them connected. For those who think “What could I possibly get the kid who has everything?”, here are a few ideas that don’t require anything but your time (and a little bit of money)!

  • Concert Tickets  – Because live music is always awesome. Sharing a concert with kids is such an awesome experience, especially their first one. Click here to find concerts in your area!
  • A Vacation – Kids need a break, too! (The Grand Canyon, Black Hills, Disney World, )
  • Music Lessons – Music has been scientifically proven to enhance pretty much every part of brain development in children. If you’re not sure which instrument, piano is a pretty safe choice!
  • Gardening Gear – Kids love to be independent and what better way to teach that than growing a live plant, bonus if you plant food! Depending on where you live, you may have to save this for spring, but self-sustainability is the gift that keeps on giving! Try this Indoor Herb Garden Starter Kit.
  • Memberships – Your local children’s museum, zoo or activity center usually has yearly memberships available.
  • A Subscription Box – Get a new box every month! There are so many different kinds, here are a few ideas:

                Kiwi Crate (for crafty kids)

                KidStir (for Chefs of all ages)

                Tinker Crate (for STEM)

                Green Kid Crafts (for hands-on Science experiments!)

Whatever you decide to get the awesome child in our life, remember that the time you spend with them is priceless. Happy Holidays.

Common Holiday Hazards and Safety Tips

A fire is always a tragedy, and a fire during the holidays is even worse. The holidays bring about a lot of hazards including plugging a bunch of lights into one surge protector (think Ellen Griswold checking the PLETHORA of plugs in the garage trying to figure out why Clark’s lights aren’t working). Real Christmas trees also raise concerns since watering them is a MUST if you don’t want your tree going up in flames. Here is a quick list to stay safe this Holiday Season!

watering tree

  • Keep trees away from candles, fireplaces, radiators and other heat sources (Fake and Real trees are both flammable!)
  • If you have a real tree, water it DAILY!
  • Check holiday lights for fraying, bare spots, gaps in the insulation or excessive kinking in the wire
  • Turn off all lights and decorations when not in use
  • No more than 2 sets of lights should be plugged in to the same outlet
  • Keep your lights from dangling where your pets could chew on them
  • Keep potential poisonous plants away from pets and kids (Holly, Mistletoe, Amaryllis, Jerusalem Cherry)
  • When preparing meals, wash your hands, utensils, sink and anything else that touches raw meat
  • Heat all leftovers to at least 165 degrees
  • Refrigerate hot and cold leftovers within 2 hours of being served
  • Designate a Sober Driver
  • Don’t put your travel plans on social media (burglars exist in the cold, too!)
  • Clean your Chimney (because how else is Santa supposed to get in??)

happy puppy

The Holidays are stressful, hopefully these tips will save you any unnecessary headaches this Season.

How Easy Is It To Buy A Home?

 

House on stack of cash

Does the thought of buying a home scare you? Are you thinking there’s no way you would qualify? And where would you even start? Is it really that hard? I’ve outlined the major steps here, and I’m willing to bet it’s much easier than you think.

Step One: Get a Realtor

Step Two: Figure out your budget

  • Here is a really easy mortgage calculator for you to figure out what exactly you can afford.

Step Three: Get Pre-Approved

  • Going to your local Bank or Credit Union will usually take you less than an hour and will give you a starting point for your budget.
  • Make sure you have all your documents with you: Bank statements, Check stubs and Tax Returns for the past 2 years.
  • Shop around! Talk to more than one bank, find the best deal for you.

Step Four: Start Shopping

  • You can look for houses from your couch (or bed!) anytime you like. Here are a few websites: NextHome TriStateRealtor.com or download our App (NextHome Mobile Connect on iOS/Andriod)
  • Drive around potential neighborhoods, some For Sale By Owner listings may not be on the internet.
  • Ask your friends! Some homes for sale may be private listings, or not quite on the market yet.
  • Be realistic about your needs. Cosmetic changes (paint colors, carpet, etc) are easy fixes!

Step Five: Make an Offer

  • If you’re asking for the Seller(s) to cover some or all of your closing costs, keep that in mind if your offer is lower than asking price.
  • Consider other potential offers, if you’ve found the house of your dreams, don’t go too low! Other people probably like it, too.
  • Be patient. Sellers love to make you wait.

Step Six: Get A Home Inspection!!!!

  • Self-explanatory and will save you a headache or twelve, trust us.

Step Seven: Down Payment

  • Definitely the scariest part! How will you ever come up with that much money?!? Good news, a lot of states have First-Time Home Buyer Down Payment Assistance programs, which you can find here.
  • More and more states are also offering Tax-Free Savings Accounts for Down Payments! Find out if yours does here!
  • If you still don’t have enough, consider picking up a seasonal part-time job or de-cluttering your home and selling all the stuff you don’t need.

Step Eight: Closing Time

  • Be sure not to make any other large purchases while searching for a home. Your credit needs to be as close to what it was at pre approval as possible.

Step Nine: Move In!

  • Congratulations! You did it. Relax, open some bubbly and take it all in.

If you have any questions about anything, someone from NextHome would be more than happy to help you!

 

Happy Hunting

 

 

Are you afraid of the Mortgage Process

Taking the Fear Out of the Mortgage Process

Taking the Fear Out of the Mortgage Process | MyKCM

A considerable number of potential buyers shy away from the real estate market because they’re uncertain about the buying process – particularly when it comes to qualifying for a mortgage.

For many, the mortgage process can be scary, but it doesn’t have to be! 

In order to qualify in today’s market, you’ll need a down payment (the average down payment on all loans last year was 5%, with many buyers putting down 3% or less), a stable income, and a good credit history.

Once you’re ready to apply, here are 5 easy steps Freddie Mac suggests to follow:

  1. Find out your current credit history and credit score– Even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score® for all closed loans in September was 737, according to Ellie Mae.
  2. Start gathering all of your documentation– This includes income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
  3. Contact a professional– Your real estate agent will be able to recommend a loan officer who can help you develop a spending plan, as well as help you determine how much home you can afford.
  4. Consult with your lender– He or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
  5. Talk to your lender about pre-approval– A pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change) and demonstrates to home sellers that you’re serious about buying.

Bottom Line

Do your research, reach out to professionals, stick to your budget, and be sure you’re ready to take on the financial responsibilities of becoming a homeowner.