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Important Legal Tips For Homeowners

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Important Legal Tips For HomeownersBeing a homeowner is exciting. It can be financially rewarding, too. Unfortunately, it can also put you in a tough legal position. Between the complexities of owning a house, having to deal with lenders and the risk that comes from owning something valuable, keeping yourself legally protected is a good idea.

Here Are Some Risks — And Some Ways To Handle Them.

  • HOAs. If you own a condo, townhome or other property in an association, the homeowner association is extremely powerful. Not paying their dues, violating their rules, or doing just about anything else to end up on the wrong side of them could leave you subject to fines or even foreclosure.
  • Neighbors. Whether or not good fences make for good neighbors, bad neighbors make for legal problems. Before dealing with your neighbors, research your community’s laws to see what options you have to deal with their unlicensed backyard dog breeding facility, teenager that steals your oranges or their tree that keeps breaking your window. It’s good to know what your responsibilities are as a neighbor, as well.
  • Legal Paperwork. Part of having a house is having paperwork. Keeping it in a safe place where you can get to it when you need it is always a good idea.
  • Being A Landlord. If you’re thinking about moving out and turning your house into a rental, take the time to see if you can really do it. Your mortgage, your homeowner association bylaws and your community’s laws can all either prevent you from renting out your house or can impose conditions or extra costs.
  • Financial Scams. When you own a house, you’re at risk of being the victim of mortgage scams. If you also have strong credit, you could also be a target for identity thieves that want to steal your good name to steal money.
  • Insurance. Your insurance does more than pay if something happens to your property. It can also give you liability protection that pays off if you harm someone at or away from your home. Given that you could lose your house in a suit, this protection is particularly valuable.

Being a homeowner requires more than just mowing the lawn and painting on occasion. You will also want to pay careful attention to your legal exposure and manage it. A little bit of care could save you a lot of money and trouble down the line.

How a Change in Mortgage Rate Impacts Your Homebuying Budget

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How a Change in Mortgage Rate Impacts Your Homebuying Budget | MyKCM

Mortgage rates are on the rise this year, but they’re still incredibly low compared to the historic average. However, anytime there’s a change in the mortgage rate, it affects what you can afford to borrow when you’re buying a home. As Sam Khater, Chief Economist at Freddie Mac, shares:

“Since January, mortgage rates have increased half a percentage point from historic lows and home prices have risen, leaving potential homebuyers with less purchasing power.” (See graph below):

How a Change in Mortgage Rate Impacts Your Homebuying Budget | MyKCMWhen buying a home, it’s important to determine a monthly budget so you can plan for and understand what you can afford. However, when you need to stick to your budget, even a small increase in the mortgage rate can make a big difference.

According to the National Association of Realtors (NAR), today, the median existing-home price is $313,000. Using $300,000 as a simple number close to the median price, here’s an example of how a change in mortgage rate impacts your monthly principal and interest payments on a home.How a Change in Mortgage Rate Impacts Your Homebuying Budget | MyKCMIf, for example, you’re getting ready to buy a home and know your budget allows for a monthly payment of $1200-1250 (marked in gray on the table above), every time the mortgage rate increases, the loan amount has to decrease to keep your monthly cost in range. This means you may have to look for lower-priced homes as mortgage rates go up if you want to be able to maintain your budget.

In essence, it’s ideal to close on a home loan when mortgage rates are low, so you can afford to borrow more money. This gives you more purchasing power when you buy a home. Mark Fleming, Chief Economist at First American, explains:

“Monthly payments have remained manageable despite soaring home prices because of low mortgage rates. In fact, monthly payments remain below the $1,250 to $1,260 range that we saw in both fall 2018 and spring 2019, but they are on track to hit that level this spring.

Although they remain low, mortgage rates have begun to increase and are expected to rise further later in the year, thus affordability will test buyer demand in the months ahead and likely help slow the pace of price growth.”

Today’s mortgage rates are still very low, but experts project they’ll continue to rise modestly this year. As a result, every moment counts for homebuyers who want to secure the lowest mortgage rate they can in order to be able to afford the home of their dreams.

Bottom Line

Thanks to low mortgage rates, the spring housing market’s in bloom for buyers – but these favorable conditions may not last for long. Let’s connect today to start the homebuying process while your purchasing power is still holding strong.

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