August 2023 - Hanover Mortgages

Apache is functioning normally

August 29, 2023 by Brett Tams

MortgageIT, a subsidiary of Deutsche Bank, announced today it will wind down its wholesale lending business in the coming months.

The company will cease accepting new loan applications as of today, and all loans previously submitted must be locked by December 24, with the last day to fund January 30.

There was no reason cited on the memo, though it’s pretty obvious why any wholesale lending company would shut down at this point.

The number of layoffs resulting from the closure are unknown, though it’s likely the company employed far fewer than the 2,500-figure listed on their website.

Back in October 2007, it was rumored that the company laid off more than 500 workers at its 40 operations centers nationwide as market conditions deteriorated.

MortgageIT was founded back in 1988 and later acquired by German banking giant Deutsche Bank in 2007 (yes, bad timing).

Based in New York City, it served all 50 states via retail and wholesale channels, providing residential mortgage loans.

It’s unclear what the company’s retail presence looks like at the moment, though their website says they still provide permanent and construction-to-perm loans in “select luxury resorts across the Caribbean and Latin America.”

This is the latest wholesale lending casualty, preceded three weeks earlier by HSBC, which shut both its wholesale and correspondent home lending businesses.

Check out the latest list of closed lenders, layoffs, and mergers.

Source: thetruthaboutmortgage.com

Apache is functioning normally

August 29, 2023 by Brett Tams

Before the mortgage crisis, it was common for banks and lenders to provide the best mortgage rate pricing to borrowers with credit scores of 720 and above.

During that time, scores of 720+ made up the top pricing tier and as such were considered “good” or even “excellent” credit to most in the industry.

In fact, it didn’t really benefit you to have a credit score above 720 because the pricing incentives tended to stop at 720.

So a borrower with an 800 credit score was treated much the same as a borrower with a 720 credit score, unless the underwriter got really subjective.

Post-crisis, credit scores of 740 and above became the new benchmark, with that group of borrowers receiving the best pricing.

But it’s all about to change again, thanks to new guidance from Fannie Mae and Freddie Mac.

The pair released new pricing guidelines for conforming mortgage loans this week that add all types of new credit score thresholds, which challenge what a good credit score really is.

Is a 780 Credit Score the New 740 Credit Score?

Beginning next spring, April 1st to be exact, there will be new credit-scoring tiers as high as 800+ for loans delivered to Fannie Mae and Freddie Mac.

So instead of shooting for a 740 credit score, you’ll have to aim for a 780 score to ensure you receive the most favorable pricing on your new mortgage.

For the record, both the 780-799 and the 800+ credit-scoring tiers have the same pricing as of now, but that could change in the future.

In other words, 800 credit scores might matter in the mortgage industry in the not-too-distant future if regulators decide to further punish borrowers.

As expected, the industry is pretty upset about this, considering the fact that it comes when mortgage rates are already pricing about a percentage point higher than recent lows.

That, coupled with higher home prices, will make it increasingly difficulty for the average family to purchase a home.

The upside is that the FHFA, which oversees Fannie and Freddie, also announced that it is doing away with the 0.25% adverse market delivery charge (AMDC), which will offset some of the pricing increases.

Note: It will remain in place for properties in Connecticut, Florida, New Jersey, and New York.

At the same time, the FHFA also said g-fees (charged for securitizing underlying mortgages and insuring default risk) would rise a further 10 basis points (0.10%).

Which Borrowers Will Get Hit the Most?

The current pricing at Fannie Mae actually rewards those with credit scores of 700 and higher at low LTVs.

The proposed credit scoring tiers include scores above 800.

If you compare the current pricing tiers to the proposed structure, borrowers with credit scores of 720-739 with LTVs between 85.01% and 95% will pay the most as a result of the changes.

For these borrowers, pricing will be 1.25% higher, or $1,250 more per $100,000 borrowed, with the absence of the adverse market delivery charge factored in.

Meanwhile, borrowers with scores between 740 and 759 with LTVs ranging from 80.01-95% will pay 1% more. There are similar hits for those with credit scores of 680 and above coupled with higher LTVs.

Here’s a sample of the new costs for such borrowers, courtesy of the MBA:

As you can see, it will be quite significant for some home buyers, especially those just scraping by thanks to the higher rates and home prices.

Interestingly, those with credit scores between 620 and 659 won’t be hit at all, if you factor in the removal of the AMDC.

So in essence, those with traditionally good to great credit scores are being punished by the new rules, whereas those with marginal credit will continue to receive existing pricing.

This should really push borrowers with good credit to put more money down when purchasing a home, or force prospective buyers to purchase cheaper homes.

It could also send some borrowers back to the FHA, which appeared to price itself out of the market after all its recent premium changes.

While this may come off as undue punishment, it looks to be a continued effort to bring private capital back to the mortgage market, and in turn rely less on the government to keep things afloat.

It’ll be interesting to see if lobbying efforts block these changes, seeing that the housing market is still quite fragile. Stay tuned! And work on your credit score!

Read more: What mortgage rate can I get with my credit score?

Source: thetruthaboutmortgage.com

Apache is functioning normally

August 29, 2023 by Brett Tams

Buying a home is a big deal, both emotionally and financially. For many people, homeownership is still an essential part of the American dream. And, of course, it’s the biggest investment some will ever make. With the median price of a house hitting $428,700 in mid-2022 (ka-ching), it’s not a purchase to be made lightly.

If you’re buying a home for the first time, you may expect it to be the same as those quick, fun-and-done experiences portrayed on reality TV shows. In truth, however, it’s a process with a steep learning curve and many moving parts, from figuring out your home-shopping budget to satisfying your final mortgage contingencies. There can be minor hiccups as well as major missteps along the way.

That’s where this article comes in. It will educate you about the six most common first-time homebuyer mistakes and help you avoid them, including:

• Not knowing how much house you can afford

• Not shopping around for the best mortgage rate

• Waiving an inspection because you’ve found your dream house.

First-Time Homebuyer Mistakes to Avoid

You’ve new to this homebuying business, so it’s worthwhile to educate yourself a bit about a few of the key moves to make the process go smoothly. Here, we’ll highlight the steps required for first-time homebuyers and help you avoid some common mistakes when buying a house.

1. Not Getting Your Mortgage Paperwork Moving

Before you start browsing online listings or get your heart set on a certain neighborhood, it might be a good idea to contact a lender (or, better yet, lenders) to show sellers that you are loan-worthy. If you don’t get your mortgage pre-qualification or even a pre-approval started, you’re unlikely to impress sellers as a serious bidder worth their consideration. You might just look like a person who enjoys poking around open houses for design ideas.

Nip that in the bud as follows:

• Pre-qualification: You’ll provide basic information about your debt, income, assets, etc., and they will run a credit check and can give you an idea of how much you can borrow.

• They will also share information on different types of loans — such as fixed-rate vs. variable-rate and 30-year vs. 15-year term — so you can see what best suits your financial situation and goals.

Remember, though: Mortgage pre-qualification isn’t a commitment for the lender or buyer — it’s just a first step. If you appear to meet a lender’s standards, you could move on to the pre-approval stage.

• Pre-approval: This involves submitting additional income and asset documentation for a more in-depth review of your finances.

• Once the lender approves these aspects of your loan application, you’ll receive a conditional commitment for a designated loan amount — called a pre-approval letter — and have a better idea of what your loan terms will be.

• Mortgage pre-approval can help demonstrate to sellers that you’ve completed the first step in getting a mortgage because your credit, income, and assets have already been reviewed by an underwriter. This can smooth the bidding process and could give you an edge over others in a competitive situation with multiple offers.

2. Not Checking Out First-Time Homebuyer Programs

It’s wise to shop around for a few different mortgage quotes, but it can be a rookie mistake to overlook some great, government-sponsored programs that make homebuying more affordable. These include:

• insurance (PMI), along with lower closing costs and a low interest rate.

• FHA Loans : These mortgages are designed for those with low to moderate incomes. They typically offer low down-payment requirements, low interest rates, and the ability to get approval even if you have a fair credit score.

• USDA Loans : These provide affordable mortgages to those with a lower income who are planning on buying a home in a qualifying rural area.

• VA Loans : These mortgages help those on active military duty, veterans, and eligible surviving spouses become homeowners. If you can check one of those boxes, you may be eligible for a home loan with no down payment and no private mortgage.

3. Not Being Realistic About What You Can Afford

Once you know more about your mortgage pre-qualification, you can avoid the homebuying mistake of not knowing your home buying budget. The lender you choose will tell you the maximum amount you’re approved to borrow for a home, but you don’t have to use every penny of that money.

It’s important to keep other factors in mind as you determine the top price you’ll pay for your first home. If you don’t have your pricing guardrails in place, you could wind up overbidding and winding up with a too tight budget. Here, some ways set your sights realistically:

• Ask yourself if your projected mortgage payment will fit comfortably into your monthly budget. You may have to make some tradeoffs — less travel, shopping, or dining out — if your new payment is higher than your current rent or loan payment, which you can figure out with a mortgage calculator.

• Keep in mind that your mortgage probably isn’t the only new expense you’ll have to cover. If you’re buying a bigger place than your current rental, you will likely pay more for utilities. If the home has a lawn or pool, you might have to maintain them or pay someone else to do it. Or you may have a homeowner association (HOA) fee. Add those costs, gleaned from online sources and/or open houses, to your projected monthly budget (you can make a budget in Excel, use paper and pencil, or work with an app).

• You’ll also have to account for the cost of homeowner’s insurance and paying your property taxes. You can get some idea of what those costs will be by searching online. There are insurance calculators, and most home listings give you the annual property taxes.

By doing the math, you’ll make sure you are ready to keep up with the monthly flow of expenses without dipping into savings or taking on credit card debt.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

4. Digging Too Deep for a Down Payment

In their eagerness to become homeowners, many first-time buyers make the mistake of going overboard and directing every bit of money they have to the purchase.

If you have to drain your emergency savings to manage the down payment on a home, you might want to dial down the amount or wait and save up a bit more. Consider what could happen if the home needs a costly repair or, worse, if you or someone in your family suddenly has an expensive medical bill. That’s a good example of when to use an emergency fund.

The same thing holds for taking money from your retirement savings. The IRS allows first-time homebuyers (which the IRS defines as not owning a primary residence in the past two years) to withdraw money from an IRA penalty-free . But this is capped at $10,000, and you’ll still pay federal and state income taxes on the money — and lose out on the growth you’d possibly have if you left those funds alone.

If you have a 401(k), you could take a loan against those funds, but again, there are consequences. There may be a provision in your plan that prohibits you from making additional contributions until the loan balance is repaid, so you’ll miss out on any growth, and you may be required to pay back the loan immediately if you quit or lose your job. If that happens, the money you borrowed will become fully taxable and may be subject to a 10% early withdrawal penalty.

There are benefits to putting 20% down on a home: You’ll avoid paying private mortgage insurance (PMI) and your monthly payments will be lower. But 20% isn’t required. For example, the minimum down payment required for a conventional loan is 3%, and for an FHA loan, it’s 3.5%. According to the National Association of Realtors, first-time buyers typically put down 7% of a home’s price in 2021.

With all the other costs you could be looking at as you move into a home — closing costs, utility deposits, moving expenses, decorating, and more — your down payment amount is something to consider if you want to avoid getting in over your head.

5. Passing on a Full Inspection

It may be tempting to waive the home inspection when you’re trying to buy the home of your dreams — especially if you have some stiff competition to be the winning bidder for an in-demand property.

Sorry to say, this is a risky strategy. A home inspection might reveal critical information about the condition of a home and its systems, from electrical problems to hidden mold; from a failing septic system to a leaky roof. What you learn in an inspection could reveal that your dream home is actually a money pit.

What’s more, your inspection report might serve as a useful negotiating tool: You could use it to ask for repairs or to work out a better price from the seller. And if you really aren’t happy with the inspection results, you may be able to use it to cancel the offer to buy.

💡 Recommended: 7 Important Factors That Affect Property Value

6. Letting Your Emotions Get The Better of You

Homebuying can be a roller coaster, so it’s important to prepare yourself psychologically as well as financially. If you’ve ever talked to someone buying a house, you know there are potential pitfalls all through the purchasing process.

You might fall in love with the perfect house and find it’s way over your budget. You might get annoyed with the sellers or their Realtor, especially during the negotiation process. You might disagree with your spouse or a co-buyer about priorities.

All of these scenarios can cause a person to behave emotionally. It might make you want to walk away from a great deal. It might lead you to barrel ahead with a purchase, even when warning lights are flashing.

How to avoid such mistakes when buying a house? By recognizing that this will be a challenging and at times stressful process (especially because you are new to it), you can proceed more calmly. Find tools that help you move ahead with patience and a sense of calm, best as you can. With your eye on the prize — namely, your first home — you’ll get there.

💡 Recommended: 31 Ways to Save for a Home

The Takeaway

Buying a home for the first time is an exciting moment, but one that takes some time and care to make sure you avoid rookie mistakes. You’ll want to do due diligence, not skip steps, or get carried away by emotion.

When you’re ready to line up your financing, the loan terms you get could be nearly as significant as your home’s location in terms of long-term satisfaction.

When shopping for a mortgage, you may want to compare different interest rates, the length of the loan, and other factors that make one lender a better fit than another.

With a SoFi mortgage loan, for example, the pre-qualification process is super simple, and our loans have competitive rates. What’s more, qualifying first-time homebuyers can put down as little as 3%, and work with our Mortgage Loan Officers who can coach you through the required steps.

If you’re thinking about buying a home, see what a SoFi mortgage could do for you.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOHL0822013

Source: sofi.com

Apache is functioning normally

August 29, 2023 by Brett Tams

Homebuyers choose the number of years they’d like their mortgage to last. The 30-year fixed-rate mortgage is by far the most popular, followed by the 15-year fixed-rate mortgage, but terms of 10, 20, 25, and even 40 years are available.

The term that will work best for each borrower largely depends on the monthly mortgage payment they can handle and how long they plan to keep the property.

What Is a Mortgage Term?

The term is the number of years it will take to pay off a home loan if the minimum payment is made each month.

During the pandemic, homeowners have kept their homes for eight years on average, according to the 2021 National Association of Realtors® Profile of Home Buyers and Sellers. Knowing how long you plan to stay in your home can affect the type of home loan that fits your situation when you shop for a mortgage — short or long term, fixed or adjustable interest rate?

How Mortgage Terms Work

For fixed-rate home loans, payments consist of principal and interest, with a fixed interest rate for the life of the loan. With mortgage amortization, the amount going toward the principal starts out small and grows each month, while the amount going toward interest declines each month.

A shorter term, conventional loan generally translates to higher monthly payments but less total interest paid, and a longer term, vice versa. A shorter-term loan also will have a lower interest rate.

This mortgage calculator tool includes an amortization chart that shows how payments break down over a fixed-rate loan term. And total interest paid is predictable.

Most adjustable-rate mortgages (ARMs) also have a 30-year term. You can’t know in advance how much total interest you will pay because the interest rate changes.

How Long Can a Mortgage Term Be?

A few lenders out there offer 40-year mortgages. Qualifying is more difficult, and the rates are the highest among fixed-rate loans, while ARMs can be unpredictable.

The long term means a borrower will make the lowest possible monthly payments but pay more over the life of the loan than any other.

Fixed-Rate Mortgages vs Adjustable-Rate Mortgages

When you’re first choosing mortgage terms or looking at different types of mortgages, start with one of the basics.

A fixed-rate mortgage is exactly what it sounds like. You lock in an interest rate for the entire term. If market rates rise, yours will not.

An adjustable-rate mortgage is much more complicated. An ARM usually will have a lower initial rate than a comparable fixed-rate mortgage, and a borrower may be able to save significant cash over the first years of the loan.

Recommended: Adjustable Rate Mortgage (ARM) vs. Fixed Rate Mortgage

But a rate adjustment can bring a spike in mortgage payments that could be hard or impossible to bear. With the most common variable-rate loan, the 5/1 ARM, the rate stays the same for the first five years, then changes once a year.

An interest-only ARM has an upside and downside. You’ll pay only the interest for a specified number of years, when payments will be small, but you will not be paying anything toward your mortgage loan balance.

An ARM may suit those who are confident that they can afford increases in monthly payments, even to the maximum amount, or those who plan to sell their home within a short period of time.

ARM seekers may want to apply for more than one loan and compare loan estimates. It’s a good idea to know the answers to these questions:

• How high can the interest rates and my payment go?

• How high can my interest rate go?

• How long are my initial payments guaranteed?

• How often do the rate and payment adjust?

• What index is used and where is it published?

• Will I be able to convert the ARM to a fixed-rate mortgage in the future, and are there any fees to do so?

• Can I afford the highest payment possible if I can’t sell the home, or refinance, before the increase?

Looking to take out a mortgage?
See what SoFi Mortgages has to offer.

Comparing 15-Year and 30-Year Mortgages

Clearly, paying off a mortgage in 15 years rather than 30 sounds great. You’ll get a lower rate, pay much less total interest, and be done with house payments in half the time. The catch? Higher monthly payments.

Here’s an example of how a 30- and 15-year fixed-rate mortgage might shake out, not including property taxes and insurance and any HOA fees.

30-Year vs. 15-Year Fixed-Rate Mortgage

Type	Loan Specs	Rate	Payments	Total Interest Paid
30-year	Appraised value: $375,000 Down payment: $75,000 Loan size: $300,000	4%	Mortgage payment: $1,432	$215,607
15-year	Appraised value: $375,000 Down payment: $75,000 Loan size: $300,000	3.2%	Mortgage payment: $2,101	$78,130

There’s a reason that the 30-year fixed-rate mortgage reigns supreme: manageable payments that ideally leave enough money for emergencies and retirement savings. Borrowers making lower payments can always pay more toward the principal if they want to pay off the mortgage early.

Then again, borrowers with stable finances who can afford the higher payments of a 15-year home loan may find it quite appealing.

The Takeaway

How to pick a mortgage term? Look at your budget, decide how long you plan to stay in the home, and weigh your financial goals and priorities.

Speaking of terms, SoFi offers fixed-rate home loans with a variety of terms to fit your needs.

The SoFi home loan help center also covers mortgage refinancing, which may change an existing loan rate and term.

SoFi rates are competitive, and finding yours takes just minutes.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOHL0222023

Source: sofi.com

Apache is functioning normally

August 29, 2023 by Brett Tams

The tenant screening process is stressful, but you need to know that the people living in your properties can cover their monthly rent. If they can’t and a breach of contract leads to eviction, it’s a traumatic and emotional event for both you and the tenant. And, it’s definitely a costly headache for you. Evictions can cost a landlord many thousands of dollars in legal fees and court costs, lost rent, property turnover costs, etc. For the screening process, you’ll need to know how to verify employment, as well as do a full background and credit check. Knowing a would-be tenant’s income means you’ll see if they can afford their monthly rent. A traditional rule of thumb is to calculate that their rent would be 30 percent or less of their gross monthly income.

Keep in mind that in high-rent markets like San Francisco or New York City, this rule is difficult to follow. In fact, a Harvard Joint Center paper on housing affordability found that the number of renters paying more than 30 percent of their gross income on rent comprises more than half of all renters.

Your ultimate goal with income verification is just to see that the prospect has a steady source of income and will likely pay the rent in full and on time.

How to get started verifying a prospective tenant’s income

You could either ask for documentation or call a prospective tenant’s employer to verify income. But it’s worth your while to do both. For one, employers are not obligated to answer your questions. They may choose not to respond for legal reasons or to protect themselves from a possible breach of employee privacy.

You should do the employment verification once the rental application is completely filled out and you can see the self-reported income, at least, is going to cover monthly fees. Do the verification before heading into a background check in case there are any red flags. If there are, you might skip the background check and save yourself some time and money.

What to ask if you call your prospective tenant’s employer

First, make sure the tenant has given you the name of the correct person to contact. In a larger company, it’s likely the human resources department or payroll. You might take a quick check on the company website to make sure. In a smaller company, you might just speak with a direct supervisor. In some cases, there will be a specific phone number or email address for information on who handles employment verification.

Once you introduce yourself to the person on the phone let them know who you’re calling about and why you need the following information: job title/what the person does for the company, date of hire, employment status, salary. Be sure to document the name and contact information of the person you ultimately receive the information from. In fact, you should document the entire screening process by keeping all your notes and emails.

Note that some employers may only acknowledge employment status and dates of employment.

What documents will verify employment?

Pay stubs are the most common proof-of-income document. Ask to see several months since many people get paid twice a month. But there are other documents that a prospective tenant may use to prove income:

Income statement

People who work for an employer can verify their income by showing a W-2, which is the federal government’s form for showing wages and taxes. Self-employed people (freelancers and contract workers) will have 1099-Misc or 1099-NEC (non-employee compensation) statements. From these, you can glean how much pay your prospective received by various clients, which will give insight into monthly or yearly income.

Employer letter

You can ask a prospective tenant to send you a salary verification letter written and signed by his or her employer. It’s possible that the prospect could fake a salary verification letter. Require a work phone number and relevant employer contact information.

Social Security benefits statement

If a prospective tenant is on Supplemental Security Income (SSI) or receives disability payments, you can ask to see a benefit verification letter from the Social Security Administration.

Worker’s compensation letter

Perhaps a tenant receives income from a current or previous employer because they suffered an injury on the job. While you can see the tenant has steady wages, keep in mind this form of compensation is likely short-term.

Unemployment statement

Yes, this does prove income, but just as with worker’s compensation, it will likely end after a certain amount of time.

Bonus and incentive payments

If your renter has a commission-based job, he or she may receive bonus checks periodically. While their income may seem inconsistent, look at their income over time to see if they will be able to pay the rent each month.

Income tax returns

Looking at a return will show you how much your renter earns regardless of whether they’re a salaried employee or have 1099 compensation.

Bank statements

While this may seem intrusive, this form of income verification works well for a tenant who’s self-employed. You’ll be able to see monthly income deposits, which can help you determine if the person can afford the unit.

How can I tell if a prospective tenant is not being honest about employment verification?

It’s possible that a would-be tenant might give you a fake reference. They may have someone offer false employment verification. Or, they may even create fake wage statements.

Look closely at all the documents you’re given. For example, fake income statements may have all-around numbers, something that’s atypical. Look for typos, and these documents should look professional and not messy. Check that the letter “O” hasn’t been used for the number “0″ and vice versa. Make sure the Social Security numbers match. And, of course, verify the information on the document with the employer.

Verification is good for all

Knowing how to verify employment of a prospective tenant’s income is just one element in your arsenal as you prepare to allow someone to rent your property.

Checking a would-be tenant’s background and making sure they can afford the monthly payments is important for you as a landlord, as well as for the tenant. A tenant buried by rental payments can lead to all sorts of headaches.

Stacey Freed is an award-winning writer and former senior editor for Remodeling, a trade publication focused on the business of the remodeling and construction industry. As an independent writer, she continues to write about the building, design, architecture and housing industries. Her work has appeared in Better Homes and Gardens and USA Today special interest publications, Realtor magazine, This Old House, Professional Builder and online at AARP, Forbes.com, House Logic and Sweeten.com among other places.

Source: rent.com

Apache is functioning normally

August 29, 2023 by Brett Tams

Designing a small living room, much like composing a delicate haiku, demands precision, intention and a deep understanding of balance as well as some basic design principles. As we embark on this exploration of small living room layout ideas, we’ll also take a look at some guiding principles to transform a constrained space into a sanctuary of style.

Your living room is where you likely spend a lot of time at home. It serves many purposes— everything from entertaining to watching TV. Sometimes, it even serves as a dining area. Because it is home for so many activities, figuring out how to arrange your living room often presents some challenges, especially if you’re limited in square footage. We’ll outline some things you should do and avoid when maximizing your living room for your daily living needs.

Basic small living room design principles

Whether you’re a maximalist who can’t help but grab a few things from the TJ Maxx home decor section every weekend or you’re a hardline minimalist who refuses to collect clutter for even the most sentimental reasons, the basic design principles explained below can be applied to any style and help keep your space under control by giving you clear parameters of the dos and don’ts of small living room layout ideas.

Light and shadow

Just as in life, where there is light, there is also shadow. Consider the natural light of your space. Allow it to seep in strategically while guiding its course. Small rooms can seem more sizable when bathed in soft light, but be wary of harsh glares that can emphasize confines. Use curtains, blinds and lamps to perfectly choreograph this dance of light and dark.

Function over excess

In confined spaces, everything needs to serve a purpose, if not multiple. Furnishings should be chosen not just for their aesthetics but also for their functionality. Think of furniture that can be folded, tucked away or serve dual purposes like a sofa bed or a table with undercarriage storage.

Elevation and illusion

In limited space, think vertically. Elevate what you can. Things like floating shelves, wall-mounted desks or hanging plants are just a few stylish options that can easily free up some floor space. The ground should feel uncluttered, giving the illusion of more space. Mirrors, when strategically placed, can magnify a room, reflecting light and scenery in addition to adding the illusion of increased depth.

Flow and mobility

Create and maintain a clear pathway in the room. Nothing should obstruct movement. Furniture should be positioned in a way that encourages a natural flow, making the space feel unconstrained. The relationship between every piece of furniture should be seamless, with every item complementing its neighbor.

Color and cohesiveness

While it might be tempting to go for a riot of colors, it’s wiser to opt for a more restrained palette in smaller spaces. Muted tones can lend a feeling of expansiveness. However, do not shy away from occasional bursts of color, perhaps through soft furnishings or artworks, to inject personality.

Texture and depth

Playing with different textures can lend depth to a space. Soft rugs, woven fabrics or wooden elements can provide tactile variations. While the room might be small in dimension, it should never feel flat.

Harmony and balance

Think of your small living room layout as a symphony. Every piece must harmonize with the other. Balance is the key. For example, oversized furniture can overpower a space but you can counteract it with minimalist, smaller pieces to retain equilibrium.

Connection and immersion

Regardless of the apartment’s size, there’s always an opportunity to bring the outside in. If a window looks out to greenery, let it be your living room’s artwork. If not, bring in house plants. The vitality that comes when immersing nature into your living room layout can make enclosed spaces feel much more expansive.

Follow the principles that fit your style

Design, when approached thoughtfully, can transform the constraints of a small living room layout into something truly special. Every choice, from light fixtures to furniture, should resonate with the essence of comfort, functionality and beauty above all else.

The dos and don’ts of small living room layouts

Now, that is a lot of information to take in. To simplify it all, let’s look at the issue of a small living room layout from a dos and don’ts perspective.

Dos

Harmonize with light: Embrace natural light. Strategically place furnishings to optimize sunlight during the day and invest in soft, ambient lighting for the evening. This play of illumination can transform the mood and feel of any room.
Utilize all of your space: Think of multi-functionality. Furniture that serves dual purposes or can be modified is ideal in small living room layouts. Your living room layout ideas should revolve around optimizing space.
Think vertically: When horizontal space becomes premium, aim high. Utilize vertical areas like walls for anything that can be mounted. An upward gaze can lend a sense of spaciousness.
Play with perception: Colors and mirrors are your allies. Soft, cohesive color palettes can create an illusion of a more expansive room. A strategically placed mirror can also double the visual depth of any space.
Use nature as decor: A hint of green, be it through indoor plants, floral patterns, or an open window view, can breathe life into your living space. It breaks the monotony and connects the room to the outside world.

Don’ts

Don’t overcrowd: One of the most common mistakes in living room layout ideas is the urge to fill every nook and cranny. In interior design, less is often more. Always be sure to give your space and furniture room to breathe.
Don’t use oversized furnishings: While a large sofa or table might seem attractive, it can dwarf a small room. Instead, choose furnishings that are proportionate to the room’s size.
Or, at the very least, don’t use them all over the room: An imbalanced room isn’t what you want in your apartment. That doesn’t mean your living room needs perfect symmetry, but you do need to maintain an equilibrium. Putting your large furniture pieces on only one side of the room will throw off the harmony of your living room. To provide more balance, position the largest pieces of furniture adjacent to each other and incorporate smaller items, like side tables, lamps and plants in between the larger pieces.
Don’t keep your couch in the corner: It’s easy to think that putting your couch in the corner will make the room look bigger because it will free up more space in the center. However, when your couch is in a corner, it often becomes difficult to place other furniture around it. Your coffee table will be off-center, there will be open, unused spaces that aren’t functional and the room will look off-balance.
Don’t rely heavily on uniformity: Although cohesion is essential, avoid making everything look too similar. A room where every piece mirrors the other lacks depth and character. Mix and match to create interest and keep the eye moving around the room.
Don’t neglect pathways: Ensure there’s a clear, unobstructed path for movement. Furniture placements shouldn’t make anyone feel trapped or obstructed.
Don’t commit to temporary trends: While it’s tempting to jump onto the latest design trend, not every fad complements a small space. Trust timeless living room layout ideas prioritizing function and aesthetic longevity over fleeting fashion.

Implement these living room layout ideas into your own home

By leveraging the design principles above, even the most limited spaces can blossom into well-curated, functional and aesthetically pleasing living rooms. Remember, a little living room shouldn’t be the one thing keeping you from signing the lease for the perfect apartment. Any layout is workable. The question is, are you creative enough to solve the puzzle?

Still in the market for that perfect place? Start and end your search right here.

Apache is functioning normally

August 28, 2023 by Brett Tams

Small spaces can often be challenging to navigate when it comes to organizing. You may find yourself staring at a sea of clutter amongst table tops and floor and drawer space. But don’t let that overwhelm you.

Whether in a smaller bungalow in Los Angeles or a studio apartment in Brooklyn, New York, this Redfin article unveils expert tips for effectively maximizing space in a small house. From no-lid containers to helping you organize vertically, let’s explore creative strategies that not only optimize space but also elevate the aesthetics and practicality of living in a small home.

1. Remove non-essentials

Before moving forward in your conquest of buying organizers, hooks, or other items to help maximize space in a small house, Daphne Valcin, Executive Coach, Consultant, and Corporate Trainer with Daphne Valcin Coaching, Inc. recommends removing non-essentials from cluttered areas. Not only is this going to offer a fresh slate to incorporate other organization methods into your home, but it will also help support your mental well-being.

Valcin says, “Recycling, scanning, or distributing extra items that take up too much space around areas such as a desk can create the mental space needed for greater productivity.”

2. Repurpose everyday items

If you’ve found items that are hard to part with, you could repurpose them into something useful (such as a storage object). Chris Szetela, Owner of Maid VIP, recommends embracing the “art of repurposing” and offers examples of transforming neglected items into something with a greater purpose.

He shares how, “an older ladder can be turned into a stylish bookshelf, or transform old mason jars into hanging bathroom organizers.” If you’re a fan of DIY projects, repurposing items adds an element of creativity and individuality to your space.

3. Implement a labeling strategy

Whether you repurposed items such as mason jars into storage containers or have purchased boxes to neatly store items, adding labels to these items can help you quickly and efficiently find what you’re looking for.

Francisco Ramirez with Ramirez Carpet Cleaning shares how labeling can benefit kitchen shelves and children’s playrooms. Ramirez adds to elevate your closet space, you can add labels such as “workout gear” to “formal wear,” making your life easier to navigate

4. Add shelves or hanging organizers to walls

When organizing, we often think “eye-level” and forget what’s above us (generally empty white walls). Leveraging vertical space can help you organize by utilizing longer, narrower segments of your home.

Ashley Rapp with Hello! Staging and Organizing suggests, “installing shelves or hanging organizers on walls to make use of unused vertical space.” Adding how vertical storage, “can be beneficial in small rooms and closets.”

Photo courtesy of Violet Marsh

5. Roll your clothes, don’t fold

While “folding clothes” is much more ingrained, it isn’t the only way to store your clothes and may not always be the most effective way. This is especially true when maximizing space in a small house.

Tatiana Vorobiova, Marketing Associate at Catherine’s Cleaning, shares how, “rolling clothes is suitable for anyone looking to maximize drawer space while maintaining visibility of all items.” She adds that rolling clothes suit those with limited drawer space, frequent travelers, and people who prefer a visual overview of their clothing options.

6. Maximize bathroom draw storage

If you live in a small home, you likely don’t have much extra storage space in your bathroom. And for those with multistep skincare routines, you may be in search of somewhere to store your products. Rather than having cluttered countertops, Tanya Lacourse with Violet Marsh Interiors shares how drawers are essential.

Organizing bathroom drawers with no-lid containers that house your products can help effectively find what you’re searching for. Consider having containers for AM products, PM products, make-up, and miscellaneous skincare or hair care products. Lastly, Lacourse adds that if you’re remodeling a bathroom, you’ll want to consider the vanities to have layers of drawers where space is not sparse.

Photo courtesy of Copper Sky Design and Remodel

7. Create a drop zone near your door or entryway

In the pursuit of optimizing space within a small house, the entryway often holds untapped potential. Transform this transitional area into a practical drop zone to effectively manage everyday essentials and prevent clutter from spreading throughout your home.

Betsy Buckley, Director of Business Operations for Coppery Sky Design and Remodeling, shares how carving out a niche in a hallway that feels like a natural drop zone with built-ins for everyday items that struggle to find a home can help with organization. From shoe bins to coat hooks, find relief knowing even the dirtier things will have a home.

8.Embrace vertical storage solutions in your kitchen

Kitchens are the heart of a home—where holidays are spent and memories are made. However, from pots and pans to an assortment of utensils, a kitchen can become one of the most cluttered places in a home – especially if you don’t have much space to begin with.

Barbara Metzel with Professional Organizing Plus shares how you can place items such as utensils or spices on hanging racks, magnetic spice containers on walls, or within pantries. Additionally, you’ll want to create pull-out pantries to easily store dry goods and continue the trend of maximizing vertical space.

Source: redfin.com

Apache is functioning normally

August 28, 2023 by Brett Tams

Consumers are growing increasingly optimistic about their personal finances, but the opposite is true when it comes to their ability to buy a home or qualify for a mortgage, according to the National Association of Realtor’s latest Housing Opportunities and Market Experience survey.

The survey found that just 68 percent of consumers are positive about their ability to buy a home, compared to 72 percent in the previous quarter. That represents the lowest level in two years, the NAR said.

Just as concerning is that renters in particular are feeling even less optimistic, with just 55 percent saying now is a good time to buy, compared to 60 percent previously. Renters identified barriers to homeownership including saving for a down payment, qualifying for a mortgage, student debt, worries about future income, and low credit scores.

As for current homeowners, older citizens and those who live in more affordable regions such as the South and Midwest, these displayed more optimism.

“The critical shortage of listings in most markets continues to spark a hike in home prices that is not easy for many buyers—especially first-time buyers—to overcome,” said NAR Chief Economist Lawrence Yun. “Adding more fuel to the affordability fire is the fact that mortgage rates have shot up to a four-year high in just a few months. Many house hunters are telling realtors that they are dispirited by the stiff competition for the short number of listings they can afford.”

On the other side of the equation, 74 percent of current homeowners state they believe now is a good time to buy, compared to just 69 percent one year ago.

“There’s no question that a majority of homeowners have amassed considerable equity gains since the downturn,” Yun said. “Home prices have grown a cumulative 48 percent since 2011 and are up 5.9 percent through the first two months of this year. Supply conditions would improve measurably—and ultimately lead to more sales—if a growing number of homeowners finally decide that this spring is the time to list their home for sale.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].

Apache is functioning normally

August 28, 2023 by Brett Tams

Your job in real estate is to be a problem solver. There is no greater problem for a motivated seller than figuring out why their home didn’t sell! You are a real estate professional, they have a home to sell. It makes a lot of sense for you to be speaking with each other.

If you do not yet have the wealth you desire and deserve, it’s simply because you have yet to figure out how to help enough people reach their goals. When you help enough people achieve their goals, achieving yours will follow!

The most logical prospect for listings in any real estate market is the homeowner of an expired listing. They clearly have a desire to sell and have demonstrated the willingness to list.

Expired Math. Let’s say you are committed to earning while you learn, that you become only somewhat efficient at prospecting expired sellers, somewhat proficient with the scripts and closing, and you win some of the time… The math is still on your side!

Let’s break down the numbers:

When you have 10 conversations per week with expired sellers, two to three will relist the property immediately. At least one will list with you. When you do this just two weeks per month, using the average sale price in the U.S. today of $400,000, netting you $9,600 after 20% expenses per transaction, that’s 2 x $9600/month = $19,200 per month x 12 months = $230,400. This is if you are only somewhat OK with this skill. Earn while you learn. As you get incrementally better, so will your expired math.

Secret: Many of our coaching clients can set one expired appointment per day, take two listings per week, and are grossing over $1 million per year. why? Because it’s not just the expired listing that you are selling, it’s the additional business it creates for you. You can sell that listing, generate buyers from your marketing, open houses, and prospecting around that listing, then lather, rinse, and repeat.

The ratios of contacts to conversions are the best of any opportunity you have in real estate. When you’re good at the script, one in 20 will turn into listings for you. When you’re great at the script it will be 1 in 10 — on some days even better than that. It’s extremely efficient.

Expired listings have been market tested. You know what the wrong price is in most cases. Sometimes you can relist at the same price and sell right away. Either way, the days on the market for relisted expireds are way less than fresh listings, especially in a shifting market. You can see this when you monitor your MLS hot sheet daily. You’ll see a home expire, get relisted, and sell in 30 days or less in most cases.

The agent you would have competed against has failed to sell the home. The seller is now serious about getting a fresh approach from someone who will solve their problem. They’re now open to listing with someone they don’t already know.

The seller of an expired home will correct any negative feedback for you when you relist it, versus resisting when it was a fresh listing. They are much more ‘coachable’ and motivated. They’ll often say, ‘Just tell me what to do to get this done!’

The listing will create more business for you as a result of all of your efforts to sell it.

The scripts are logical and easy to learn. Remember that you’re there to solve a problem, speaking to (almost always) a very motivated seller! Don’t wing it. Instead, follow a systematic approach, asking logical questions which will lead you to a prequalified appointment and then your next new listing.

Tim and Julie Harris host a podcast for real estate professionals. Tim and Julie of Premier Coaching have been real estate coaches for more than two decades, coaching the top agents in the country through different types of markets.

Source: housingwire.com