Ceilings Are the Perfect Blank Canvas

One of the many joys of homeownership is incorporating your signature style throughout your home. From furniture and rugs to artwork and paint colors, there are so many ways you can make a space all your own. 

But there’s one space in the home that’s often left untouched — the ceiling. Though rarely considered, it’s a vital part of your home’s story. 

Whatever your design style, there are plenty of ways to dress up your fifth wall. Check out these ceiling styles that designers and architects are raving about:

Go Modern Minimalist  
If you like sleek and elegant design schemes, minimalism is for you. A minimalist home has clean lines in a defined color palette. Forego bright color schemes and add elaborate elements sparingly. 

Paint, tile or paneling in black or grey add engaging contrast to ceilings without stealing the show.

Add Some Rustic Charm
If you’d prefer a more accessible look, then rustic style is the answer. It’s comfortable, warm and inviting with neutral tones and natural textures like wood and stone.

Wood is the order of the day with a rustic ceiling motif. Rough-hewn panels, bold beams or reclaimed wood will add stunning character to your barnhouse decor. 

Keep It Traditional
If you’re looking for a style that’s casual and understated, consider a classic look. It’s a great option whether you enjoy muted tones or simple pops of color.

For traditional ceilings, bright white paint with recessed lighting is a tried-and-true choice. Your cool and classic fifth wall can be flat or vaulted with lavish details like crown molding or coffers. 

Bring the Focal Point Down
If a crisp, white ceiling is your preferred style, you can dress up your fifth wall with a custom pendant or light fixture

Ready to get rid of those old popcorn ceilings? Get in touch if you’d like referrals to interior designers in our area. 

Or reach out today if you’re ready for a new space to design.

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Independence Day – 2019

EXP Realty of California Inc.Chuck Barberini Real Estate

 On our nations Independence Day, remember why we celebrate. Despite the constant attacks on the United States, we are the greatest country ever created. Brave men and women have in the past and continue to fight for our way of life. We, as citizens have been entrusted to fight daily, to hold on to the legacy that was handed to us by our forefathers all the way back to our nation’s fathers. People smarter than I, with an awful lot to lose put their lives on the line because they knew that a government for the people was far better than the ruling class that they left behind. They warned us about government intervention and what would happen when the government has too much power.

The founding fathers believed in a limited government and that is why they believed that they needed a constitution and that it needed to be written. If the constitution is written, all the citizens would know the limitations of the government and that they could prevent the government from exceeding their limitations.

Contrast that to what is happening today, and could we be living in the world that our founding fathers warned us about? Open boarders, Socialism, large government, free health care for all, race baiting, erasing the past, reparations?

These are the very things that our founding fathers fought against and for some reason we are living in these times where common sense is shunned and ostracized.  Is it any wonder, since civics is no longer taught in schools, that kids don’t even know anything about WW2 or what it was about much less the Civil War or Revolutionary War?

Taxation without representation? What is socialism? Although we are a Democratic Republic, I keep thinking back to a quote that I wrote down years ago that was said by a Scotsman named Alexander Fraser Tyler over 200 years ago, he said; “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. … will endure until politicians realize they can bribe the people with their own money.”

My challenge this Independence Day is to spread the word, teach our young and to fight for common sense and to save our great nation, because it is worth fighting for.

God Bless America

Have you ever wondered what happened to the 56 men who signed the Declaration of Independence?

Five signers were captured by the British as traitors,

and tortured before they died.

Twelve had their homes ransacked and burned.

Two lost their sons serving in the Revolutionary Army;

another had two sons captured.

Nine of the 56 fought and died from wounds or

hardships of the Revolutionary War.

They signed and they pledged their lives, their fortunes,

and their sacred honor.

What kind of men were they?

Twenty-four were lawyers and jurists. 

Eleven were merchants, 

nine were farmers and large plantation owners; men of means, well educated, 

but they signed the Declaration of Independence knowing full well that the penalty would be death if they were captured. 

Carter Braxton of Virginia, a wealthy planter and trader, saw his ships swept from the seas by the British Navy. He sold his home and properties to pay his debts and died in rags.

Thomas McKeam was so hounded by the British that he was forced to move his family almost constantly. He served in the Congress without pay, and his family 

was kept in hiding. His possessions were taken from him, and poverty was his reward.

Vandals or soldiers looted the properties of Dillery, Hall, Clymer, Walton, Gwinnett, Heyward, Ruttledge, and Middleton.

At the battle of Yorktown, Thomas Nelson, Jr., noted that the British General Cornwallis had taken over the Nelson home for his headquarters. He quietly urged General George Washington to open fire. The home was destroyed, and Nelson died bankrupt.

Francis Lewis had his home and properties destroyed. The enemy jailed his wife, and she died within a few months.

John Hart was driven from his wife’s bedside as she was dying. Their 13 children fled for their lives. His fields and his gristmill were laid to waste. For more than a year he lived in forests and caves, returning home to find his wife dead and his children vanished. 

So, take a few minutes while enjoying your 4th of July holiday and silently thank these patriots. It’s not much to ask for the price they paid.

Remember: freedom is never free!

I hope you will show your support by sending this to as many people as you can, please. It’s time we get the word out that patriotism is NOT a sin, and the Fourth of July has more to it than beer, picnics, and baseball games.

#ChuckBarberiniRealEstate

Helpful Links:

  1. Today’s Mortgage Rates
  2. EXP Realty – The Agent Owned – Cloud Based Company
  3. Probate Property Specialist
  4. Search for Homes
  5. Tax Deferred System
  6. Real Estate 4 Life
  7. Property Management
  8. Captain Charlie

DIY Doesn’t Mean Doing It All Yourself

EXP Realty of California Inc.Chuck Barberini Real Estate

How handy would you say you are? Can you fix a leaking faucet or install a new backsplash? Do you own all the drills, power saws and sanders used by the pros?

It can be tempting to DIY it all — especially if you’re on a budget. After all, you can have an active role in improving your home, and save cash to put toward other things. Why wouldn’t you want to?

The truth is not all projects are suited for a DIYer — no matter how much of a shiplap expert you might be. 

If you’re considering a few renovations, here’s when to put on your toolbelt and when you might want to call a pro: 

In the Kitchen: You can probably replace a sink, reface your cabinets or install a new dishwasher. 

Want to move the sink or add recessed lighting? You’ll want a pro.

In the Bathroom: Installing new floor tiles, upgrading your toilet seat or changing your showerhead are all tasks you can do. 

If you want in-floor radiant heating or to install a tub where there isn’t one, bring in a pro.

On the Exterior: Looking for more curb appeal with a new garden bed and a fresh coat of paint on your front door? Have at it. 

Substantial upgrades like installing a skylight, repairing your roof or repaving your driveway are better suited for a professional.

Structural Changes: If you’re super handy, you can probably install drywall or relocate a door. 

But if you’re changing an area that’s load-bearing? Definitely call a pro.

Remember, DIY doesn’t mean doing everything yourself. You’ll want to hire a professional for anything that requires specialized knowledge. There’s no shame in asking for help from an expert. 

Want to discuss what home renovations might improve your property’s value? Get in touch today.

#ChuckBarberiniRealEstate

Helpful Links:

  1. Today’s Mortgage Rates
  2. EXP Realty – The Agent Owned – Cloud Based Company
  3. Probate Property Specialist
  4. Search for Homes
  5. Tax Deferred System
  6. Real Estate 4 Life
  7. Property Management
  8. Captain Charlie

It’s Bay Area Real Estate

Bay Area Real Estate is strong during the First Quarter of 2019.

EXP Realty of California Inc.Chuck Barberini Real Estate

There were numerous occasions as a young man when I would seek my Dad out for his advice or insights, typically his response was not as succinct as to say “plastics” and because we were in San Francisco, telling me to go west was not an option. Often, however, his insights included a reminder that we live in San Francisco and that the rest of the country doesn’t think or act like we do here in the Bay Area. This was, for the most part a good thing, but also the reason that so many people flocked to the City by the bay.

I am often reminded of my Dad’s comments when I read trade articles regarding Real Estate. When housing trends, prices and inventory are discussed, I must remind myself that they are speaking nationally, while we in the Bay Area definitely march to our own drumbeat. I did, however, read two real strong Bay Area Real Estate specific articles that I wanted to share. One by Louis Hansen of the Bay Area News Group writes an interesting piece that discusses March being the first month in seven years to have a downward tick in housing sales, what may have caused it and what to expect. Then Kaitlyn Bartley, also of the Bay Area News Group writes about the Bay Area’s least affordable communities. In spite of the warnings put forth in Louis’ article, the Bay Area’s price still out pace most of the nation.

Check these out and let me know what you think, is it doom and gloom time, or is it time to capitalize on this hot market. As always, I look forward to hearing from you.

Snap! Record climb of Bay Area home prices broken!

Declines in tech-heavy suburbs lead to flat median sale prices

Home sales in the Bay Area lagged in March, with high prices continuing to push may would-be buyers to the sidelines.

By LOUIS HANSEN | lhansen@bayareanewsgroup.com | Bay Area News Group

PUBLISHED: April 29, 2019 at 10:06 am | UPDATED: April 29, 2019 at 6:13 pm

Median home sale prices in the Bay Area dipped ever-so-slightly in March, marking the end of a record-breaking, seven-year streak as even high salaries and low-interest rates failed to entice buyers into the country’s most expensive market.

Prices for existing homes in the nine-county region fell .6 percent, while the number of home sales plummeted 14 percent from the previous March, according to a report released Monday by real estate data firm CoreLogic. Declining sales and prices in the core Silicon Valley counties of San Mateo and Santa Clara led the drop-off, even as Silicon Valley tech giants continued to add jobs.

Alameda County, meanwhile, saw a slight increase in median price while Contra Costa County saw a slight decline.

Home sales hit spring lows not seen for the month since March 2008, according to the survey. CoreLogic analyst Andrew LePage said last month’s decline continues a slow-down from mid-2018, when more homes started to be put up for sale and prices no longer vaulted to double digit gains.

“It is the smallest decline possible,” LePage said. “The market has flattened out.” He added that the next few months will indicate if the drop reflects a deeper trend or simply a “pause.”

The record-breaking streak pushed Bay Area home prices from a median of $425,000 in April 2012 to a peak of $935,000 in May 2018. The highest-in-the-nation prices led to seven-figure bidding wars on fixer-uppers, and alarmed state lawmakers concerned that the desperate housing shortage was threatening the long-term economic and social health of the region.

As tech giants Apple, Google, Facebook and other software and service companies added high-salaried employees in the last seven years, a lack of new housing brought pain for would-be buyers and gain for long-time homeowners.

“We’ve hit a price point,” said Steve Levy, director of the Center for Continuing Study of the California Economy. “The market is saying we’ve hit a price ceiling.”

Levy pointed to growing a supply of new homes, which has helped curb increases in prices. But the region is still trying to catch up from a housing deficit created by slow home construction between 2006 and 2013. “We haven’t dug ourselves out of it,” he said.

Home sales flagged 14.3 percent Santa Clara County and 11.8 percent in San Mateo County. Median sale prices fell by 11.1 percent to $1.2 million in Santa Clara County and 2.4 percent to $1.5 million in San Mateo County from the previous March. Prices fell 1.1 percent to $603,000 in Contra Costa County and dropped 6.3 percent to $1.2 million in Marin County.

But the days of high prices have yet to cease, despite the slight decline in March.

The median sale price for existing homes in the nine-county region was $860,000 in March, down from $865,000 the year before. Still, some counties showed year-over-year gains last month, according to CoreLogic data: median sale prices for resale homes grew 1.2 percent to $870,000 in Alameda County, and 10 percent to $1.6 million in San Francisco.

The stalled market comes as the Silicon Valley economy storms forward. Interest rates for standard 30-year mortgages have dropped to 4.2 percent from a recent high of 4.9 percent in November.

The regional job market grew 2.4 percent from the previous March, outpacing the state growth of 1.4 percent and national growth of 1.7 percent, according to the Bay Area Council. But even as workers flock to the region, residential building permits were down 5 percent in the first two months of the year, according to the council.

Agents report healthy demand for lower-priced starter homes, and also an increase in homes for sale. But clouds have been gathering for some time.

San Jose agent Gustavo Gonzalez, president of the Santa Clara County Association of Realtors, said high prices set by sellers expecting to get top dollar contributes to the slowdown. Over-priced homes can sit on the market, and ultimately bring lower returns for homeowners, he said.

But he remains optimistic. “I don’t see the market flopping,” Gonzalez said. “There’s too much demand out there.”

Julius Chau, an electrical engineer in San Jose, recently decided to put one of his rental properties, a three-bedroom house in Evergreen, on the market. He grew tired of managing the property and saw healthy returns on a sale, he said.

The home he bought two decades ago for $300,000 sold for $1 million this month. He received about a half-dozen serious offers, and the deal was sealed within two weeks of the home going on the market.

But he probably won’t invest in another Bay Area rental. With high mortgages and costs, he said, “the cash flow isn’t great.”

Mark Wong, an agent with Alain Pinel, said properly priced homes still sell quickly. The entry-level market, around $1 million in much of the Peninsula, remains hot. In addition to Chau’s home, Wong recently sold two other homes for around $1 million within three weeks of listing.

“The high-end price is definitely softening,” said Wong, based in Saratoga. “The entry-level is really strong.”

East Bay sales remained healthy, with agents reporting solid interest in homes under $1 million in good school districts.

Nancie Allen of Masterkey Real Estate in Fremont said balance between buyers and sellers is coming back. The market remains spotty — certain neighborhoods remain strong, while others are less desirable, she said.

“It is so local,” Allen said. “We’re in shifting markets.”

The Bay Area’s least affordable communities

Where the region’s rich live

By KAITLYN BARTLEY | kbartley@bayareanewsgroup.com | Bay Area News Group

PUBLISHED: May 2, 2019 at 6:30 am | UPDATED: May 2, 2019 at 11:40 am

The entire Bay Area is notorious for its exorbitant cost of living, but the Peninsula blows away the competition when it comes to the region’s most expensive ZIP codes.

ZIP codes in Atherton, Palo Alto, Los Altos, Los Altos Hills, Portola Valley and Stanford are the six least affordable communities in terms of housing costs in the nine-county Bay Area and Santa Cruz County.

Even in the cheapest of these ZIP codes, you’d need an annual income of more than $500,000 to buy the median priced home last year, assuming that you spend no more than 30 percent of your income on housing. In the most expensive, Atherton’s 94027, you’d need to bring in more than $1 million a year.

Here are the Bay Area’s six priciest communities for buyers in 2018:

6) Stanford’s 94305 surrounds Stanford University and includes the Stanford Golf Course and the popular hiking area near the Stanford Dish. The real estate around the West Coast’s most elite university is accessible only to a few. Here, a median mortgage payment runs $13,690 a month and requires an annual income of $547,400, assuming you spend no more than 30 percent of your income on housing, according to our analysis. That’s unaffordable to all but the top 1.9 percent of earners in the Bay Area.

5) and 4) Los Altos and Los Altos Hills share two of the most expensive ZIP codes in the Bay Area. Zips 94024 and 94022, which together encompass virtually the entire city of Los Altos and the neighboring town of Los Altos Hills, require median annual incomes of $557,800 and $665,900 to afford the median monthly mortgage payments of $13,940 and $16,650, respectively. Although Los Altos includes a bustling downtown district, its neighbor Los Altos Hills, which sits west of Foothill Expressway, consists almost exclusively of residences since the town banned commercial zones.

3) Tucked away between Woodside and Los Altos Hills, 94028 in the small town of Portola Valley comes in third on the list. Here, in the wooded hills on the eastern slope of the Santa Cruz Mountains overlooking Stanford and Palo Alto, the median monthly mortgage is $14,990, which requires an income of $599,600.

2) Seven miles to the east in Palo Alto, ZIP code 94301, which stretches from north of the city’s downtown area to south of Oregon Expressway and includes Old Palo Alto and the city’s downtown shopping district, is home to tech luminaries like Google’s Larry Page and Facebook’s Mark Zuckerberg. Here, households must earn $676,600 annually to afford the median monthly payment of $16,910. That means just 0.8 percent of Bay Area residents can afford to live there.

1)The Bay Area’s most expensive ZIP code, 94027 in Atherton, has a median monthly mortgage of $26,930. Atherton is not only the most expensive ZIP code in California, but in the entire country, according to Zillow.

Click here to see the photo gallery of the most expensive zip codes of the Bay Area on your mobile device.

#ChuckBarberiniRealEstate

Helpful Links:

  1. Today’s Mortgage Rates
  2. EXP Realty – The Agent Owned – Cloud Based Company
  3. Probate Property Specialist
  4. Search for Homes
  5. Tax Deferred System
  6. Real Estate 4 Life
  7. Property Management
  8. Captain Charlie
Chuck Barberini Real Estate is Brokered by EXP Realty of California Inc.

Have you checked out the neighborhood?

EXP Realty of California Inc.Chuck Barberini Real Estate

This is the post that went out in my e-mail blast this week and it one that I really like. It is so simple, but in all my years of selling homes, it is not something that I even considered. When you consider that the purchasing of your home is the largest purchase that most people will make in their life, why not check it out first. In one of the articles that I read, the buyers asked the agent if they could rent the house that they were looking to purchase for a week, after all, the house is vacant. Because of the nature of the housing market that we have in the Bay Area, there are still multiple offers on houses, so the chances of sellers allowing buyer to rent their house for a week is highly unlikely. But there is a contingency period to do your inspections, why not check out an Air BNB in the neighborhood during that week. Check out the neighborhood at night, see what the streets are like, check out the noise level. See what your commute will be like what the walk to school will be. It’s a great thought and something that I will mention to my buyers in the future. Check out my e-mail post and let me know what you think.

Drive Before you Buy

Have you checked out the neighborhood?

You wouldn’t pick out shoes before choosing an outfit, right? Or buy car accessories without first deciding if you want a truck or a sedan?

Well, house hunting should be treated the same way.

You shouldn’t search for a dream home without vetting neighborhoods or experiencing the new area for yourself.

If the area doesn’t meet your needs, the property may not provide a dream scenario. So how do you make sure you’ve found the right neighborhood? Keep these details in mind:

Cost of Living
Are the property taxes and HOA fees trending upward? Are there mostly trendy boutiques and high-end businesses in the area, or does it have a good mix of local and national retailers?

Planned commercial development could affect the long-term affordability of the area. However, having more access to retailers and entertainment could enhance your lifestyle.

Commutes and Social Life
How close do you want to be to the friends and family you visit the most? How far are you willing to drive to get to the restaurants, theaters or stores that you frequent?

It’s understandable to prioritize your work commute, but keep in mind the other places you visit on a daily or weekly basis.

Long-Term Goals
How does the community fit into your future goals? Are there good schools, parks or sports leagues for your family?

A thriving community adds to your quality of life. And it’s a good sign for future home values.

Want to try before you buy? Where possible, consider renting a unit in the area for a few days through a short-term rental site. Experiencing the neighborhood like a resident can help you to decide if it fits your current and future needs.

Are you looking for a new home? Get in touch if you’d like to see a neighborhood report.

#ChuckBarberiniRealEstate

Helpful Links:

  1. Today’s Mortgage Rates
  2. EXP Realty – The Agent Owned – Cloud Based Company
  3. Probate Property Specialist
  4. Search for Homes
  5. Tax Deferred System
  6. Real Estate 4 Life
  7. Property Management
  8. Captain Charlie

Party House – Chuck Barberini

EXP Realty of California Inc. – Chuck Barberini Real Estate

I was going through Realtor.com this week when I saw an article that caught my eye by Becky Bracken. It showed this week’s most popular listings, which were all impressive. Besides the fact that that I am constantly blown away but the prices of homes outside of California, the Godfather’s home is for sale. Being young and impressionable in the 70’s I was a huge fan of The Godfather and their compound on Long Island. Just think of the parties that you could have in this place. This is so cool, check out the info. on the compound and the Tahoe place, there is a link to the whole article below.

An Offer You Can’t Refuse: NYC ‘Godfather’ Home Is Week’s Most Popular Listing

By Becky Bracken | Apr 5, 2019

Decades have passed since we first met the Corleone family in “The Godfather,” and the mystique just keeps pulling us back in. So, we weren’t shocked to find that a Staten Island, NY, home used in the film ranks as this week’s most popular home on realtor.com®.

The property on the market served as Michael Corleone’s residence—one of three that made up the fictional Corleone family compound in the 1972 classic. The main Corleone residence, where the film’s legendary wedding scene took place, is right next door.

Much of the property is unchanged from the 1970s, so it’s likely to feel familiar to fans. Quite apart from its sparkling Hollywood cred, it is a lovely family home sitting on a large lot at the dead end of a tree-lined street. The fact that Marlon Brando probably passed the time there is just one of its many selling points.

Lake Tahoe Location Seen in ‘The Godfather Part II’ on the Market for $3.75M

The Lake Tahoe, CA, estate famously featured in “The Godfather Part II” as Fredo’s final resting place has since been transformed into 22 individual homes, now called Fleur Du Lac Estates. One of the homes is currently on the market for $3.75 million.

The original 15-acre estate known as Fleur Du Lac was built in 1938 by businessman Henry Kaiser to celebrate the completion of the Hoover Dam. The company Kaiser owned was one of the principal contractors for the dam.

In all, 300 workers labored day and night for 30 days to erect this lakeside property’s 17 homes, cottages, yacht club, boathouse, and more, according to the community’s history.

Until Kaiser sold the estate in the 1960s, it was used as a hideaway for business tycoons. It was also the perfect spot for Kaiser to race his beloved hydroplanes, which were stored in the property’s boathouse.

But to movie buffs, the home is better known as the backdrop for Michael Corleone‘s son’s first communion party, the scene of Michael brooding in his lakefront office, and the fateful final scene of Michael’s brother Fredo—all filmed in the 1970s.

An Offer You Can’t Refuse: NYC ‘Godfather’ Home Is Week’s Most Popular Listing

#ChuckBarberiniRealEstate

Helpful Links:

  1. Today’s Mortgage Rates
  2. EXP Realty – The Agent Owned – Cloud Based Company
  3. Probate Property Specialist
  4. Search for Homes
  5. Tax Deferred System
  6. Real Estate 4 Life
  7. Property Management
  8. Captain Charlie

3 Ways to Know it’s The Right Property For You…

EXP Realty of California Inc. – Chuck Barberini Real Estate

Want to take the pain out of homebuying? Keep your lifestyle priorities top of mind.

If you’re planning to buy a new home, there’s great news: More houses have hit the market in recent months. This means you’ve got more options to choose from.

Choice is always good, but it can also be overwhelming.

The key? Careful, disciplined prioritization. 

Let’s go beyond square footage or the number of bedrooms and consider how the property fits your life. By focusing on what matters the most to you, we can refine your search to the closest matches. 

Here are the three questions every potential homebuyer should ask themselves: 

Where do you want to live?
Think beyond your commute. Do you want to be in a specific school district? How much street noise can you cope with? 

Are you looking for an established neighborhood or one that’s up and coming? That could affect future home values

What does the future hold?
Think about the next 10 years. Are you planning to have kids? Will your aging parents move in? 

If you plan to stay for the long haul, you might want a property to accommodate your family today, and in the future. If you know your career will have you on the move, will you want to sell the property or rent it out?

How much work are you willing to do?
When considering condition, be honest with yourself. How much work are you truly willing to take on? 

If the home needs cosmetic updates, will you want them completed before you move in? If you fall for a fixer-upper, do you have a budget for renovations?

Communication is a critical element of your home search. The more information you share, the better we’re able to match you with a home that fits your life.

Got your priorities in order? Let’s find your dream home. Reach out today.

#ChuckBarberiniRealEstate

Helpful Links:

  1. Today’s Mortgage Rates
  2. EXP Realty – The Agent Owned – Cloud Based Company
  3. Probate Property Specialist
  4. Search for Homes
  5. Tax Deferred System
  6. Real Estate 4 Life
  7. Property Management
  8. Captain Charlie

FHA vs Conventional loans – Chuck Barberini Real Estate

Chuck Barberini Real Estate – BR Real Estate Group

FHA vs Conventional loans – Thursday November 9th

I get asked this question a lot and for the most part I either defer to the lend or say that FHA offers 96.5% loan. There are different qualifications for the property in FHA appraisals that are much stricter. The subject property is not only appraised for value, it is also inspected for safety, soundness of construction and adherence to local code restrictions. I came across this article yesterday written by Hal Bundrick a staff writer at NerdWallet, it does a great job of explaining the benefits and disadvantages of FHA loans. Take a moment and read this article and share with anyone that is considering purchasing a home in the near future. If you have any questions, I work with quality lenders that can further explain what loan better fits your situation.

Tech Sec

I saw this article On Linkedin this morning, a couple of big names teaming up:

New Salesforce and Google Partnership Shakes Up the Cloud Race

FHA loan vs. conventional mortgage: Which is right for you?

Nerd Wallet

11:59 PM, Nov 7, 2017

When exploring mortgage options, it’s likely you’ll hear about Federal Housing Administration and conventional loans. Let’s see, FHA loans are for first-time home buyers and conventional mortgages are for more established buyers — is that it?

Not necessarily.

Actually, the differences between FHA loans and conventional mortgages have narrowed in the past few years. Since 1934, loans guaranteed by the FHA have been a go-to option for first-time home buyers because they feature low down payments and relaxed credit requirements.

But conventional loans — which are not insured by a government agency like the FHA, the Department of Veterans Affairs or the U.S. Department of Agriculture — have gotten more competitive lately.

Both types of loans have their advantages. Here are the factors to consider when deciding between an FHA and a conventional mortgage.

Property standards

What kind of property are you buying? You can use a conventional loan to buy a vacation home or an investment property, as well as a primary residence.

The same can’t be said about FHA loans.

An FHA loan must be for a property that is occupied by at least one owner, as a primary residence, within 60 days of closing. Investment properties and homes that are being flipped (sold within 90 days of a prior sale) aren’t eligible for FHA loans.

FHA appraisals are more stringent, as well. Not only is the property assessed for value, it is thoroughly vetted for safety, soundness of construction and adherence to local code restrictions.

Loan limits

Where you’re planning to buy your home can play a role in what kind of loan is best for you. FHA and conventional loan guidelines allow wide latitude for borrowers in expensive areas, but in some cases you may end up needing a jumbo loan, which is bigger than FHA or conventional limits.

FHA loans are subject to county-level limits based on a percentage of a county’s median home price. In certain high-cost areas, the limit in 2017 can be as high as $636,150 — and in Alaska, Guam, Hawaii and the Virgin Islands, limits can be much higher than that.

For loans guaranteed by Fannie Mae and Freddie Mac, the government-sponsored companies that help fund the conventional mortgage industry, single-family home loan limits are $424,100 in most of the country. Again, higher loan ceilings are available in pricier counties.

You can find your county’s loan limits for FHA (shown at the link as “FHA forward”) and conventional mortgages (“Fannie/Freddie”) on the Department of Housing and Urban Development website.

Down payment

This is where conventional loans have really improved. FHA loans used to be the low-down-payment leader, requiring just 3.5% down. But now, Fannie Mae and Freddie Mac both offer 97% loan-to-value products; that means a 3% down payment option — even lower than FHA — for qualified buyers.

From time to time, you can find lenders offering down payment options that are even lower on conventional loans. Quicken Loans, for instance, has offered a 1% down loan.

Foreclosures

Another instance where FHA and conventional standards have converged: how bad credit is accounted for. Over the past few years there have been numerous changes to the policies regarding bad-credit issues and how they are treated for FHA and conventional loans, with new standards implemented — and then expiring.

However, as it stands now, for a buyer to qualify for either an FHA or conventional loan, it typically must be two years since a bankruptcy was discharged and three years since a foreclosure or short sale.

There will definitely be hurdles to clear to prove to a lender that you have re-established your creditworthiness:

  • You’ll have to document that circumstances leading to the financial setback were beyond your control
  • You may have to attend a credit education course
  • Your loan will likely have to go through a manual loan approval process, which means approval and closing will likely take longer.

Mortgage insurance

With a down payment of less than 20%, both FHA and conventional loans require borrowers to pay mortgage insurance premiums. This insurance helps defray the lender’s costs if a loan defaults.

There are some differences between the two insurance programs.

With an FHA loan, if you put less than 10% down, you’ll pay 1.75% of the loan amount upfront and make monthly mortgage insurance payments for the life of the loan. With a down payment of 10% or more (that is, a loan-to-value of 90% or better), the premiums will end after 11 years.

Conventional loans with less than 20% down charge private mortgage insurance. It can be charged as an upfront expense payable at closing, or built into your monthly payment — or both. It all depends on the insurer the lender uses.

“The rates for PMI vary according to two factors: credit score and loan-to-value ratio,” Joe Parsons, a senior loan officer with PFS Funding in Dublin, California, says. He provides the following examples:

  • A borrower with a 620 score with a 97% loan-to-value will pay 2.37%
  • The same loan for a borrower with a 760 score will cost 0.69%
  • A borrower with a 620 score and a 90% loan-to-value will pay 1.10%
  • The same loan for a borrower with a 760 score will cost 0.31%

PMI generally can be canceled once your loan is paid down (and/or your property’s value appreciates) to 78% of your home’s value.

Mortgage insurance

FHA Conventional
Upfront premium cost 1.75% Depending on the insurer, there may or may not be an upfront premium. You can also opt to make a single-premium payment instead of monthly payments.
Monthly premium cost Cost varies. Based on loan term, amount and down payment. For purchase loans, the premium ranges from 0.45% to 1.05%, according to the FHA. Cost varies. Based on credit score and loan-to-value. For purchase loans, fees can range from 0.55% to 2.25%, according to Genworth and the Urban Institute.
Duration With down payments less than 10%, you’ll pay mortgage insurance for the life of the loan. With a loan-to-value equal to or greater than 90%, you’ll pay the premiums for 11 years. Usually can be canceled once your loan balance reaches 78% of your home’s value.

Credit score standards

Here is the primary distinction between the two types of loans: FHA loans are easier to qualify for. As far as a credit score, FHA sets a low bar: a FICO of 500 or above. Lenders can set “overlays” on top of that credit score requirement, hiking the minimum much higher.

But to qualify for the lowest FHA down payment of 3.5%, you’ll need a credit score of 580 or more, says Brian Sullivan, HUD public affairs specialist. With a credit score between 500 and 579, you’ll need to put down 10% on an FHA loan, he adds.

The average FICO score for FHA purchase loans closed in 2016 was 686, according to mortgage industry software provider Ellie Mae.

Conventional loans typically require a FICO credit score of 620 or better, Parsons says.

“A borrower with that score who can document income and assets will, in all likelihood, receive a loan approval,” he says. “They will pay a higher price for that loan because of ‘risk-based pricing’ from Fannie Mae and Freddie Mac, but it is unlikely that they will be declined because of their credit score.”

Risk-based pricing means compensating the lender for taking the additional risk on a borrower with a lower credit score (the average FICO score for a conventional loan was 753 in 2016, according to Ellie Mae). In other words, the lower your credit score, the higher your mortgage interest rate.

Debt-to-income ratios

HUD’s Sullivan says your debt-to-income ratio — including the new mortgage, credit cards, student loans or any other monthly obligations — must be 50% or less for an FHA loan. Ellie Mae reports the average debt ratio for borrowers closing FHA purchase loans in 2016 was 42%.

Conventional loans usually require a debt-to-income ratio no higher than 45%, Parsons says. In 2016, borrowers with conventional purchase loans averaged a 34% debt ratio, according to Ellie Mae.

Mortgage rates

Another distinction for FHA loans: generally lower mortgage interest rates. However, the difference between the two was incremental last year. The 30-year fixed rate for FHA purchase loans closed in 2016 averaged 3.95%, compared with a conventional mortgage rate on the same term of 4.06%, according to Ellie Mae.

Refinancing

As far as mortgage refinancing goes, the edge goes to FHA “streamline” refinancing. With no credit check, no income verification and likely no home appraisal, it’s about as easy a refi as you can get. But there are five requirements for an FHA streamline refinance.

So, which mortgage to choose?

Your decision may initially be based on your credit score. If it’s well below 620, an FHA loan may be your only choice. Above 620 and you’ll want to run the numbers on both to see what works best for you.

However, if you are serving in the military or are a veteran, a loan backed by the VA may be the way to go. VA loans usually require no down payment. And if you live in a suburban or rural area, a USDA loan could be a smart option, too.

FHA Loans vs. Conventional Loans

  FHA Conventional
Property type Financing for a primary residence only Financing for a primary residence, second home or investment property
Down payment  Down payments as low as 3.5% Some programs offer down payments as low as 3% or even lower
Mortgage insurance Mortgage insurance premiums required: 1.75% upfront and monthly premiums that vary with your loan term, loan amount and down payment, from 0.45% to 1.05% With a down payment lower than 20%, private mortgage insurance is usually required. Monthly fees vary according to credit score, loan-to-value and insurer, and range from 0.55% to 2.25%.
Credit score Credit score of 500 or better is usually required, though this depends on the lender. Average FICO score in 2016: 686. Credit score of 620 or higher is usually required, though this depends on the lender. Average FICO score in 2016: 753, according to Ellie Mae.
Debt ratio Average 2016 debt ratio: 42% Average 2016 debt ratio: 34%
Interest rates Interest rates for FHA loans tend to be slightly lower than for conventional loans Interest rates for conventional loans tend to be slightly higher than for FHA loans

Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: hal@nerdwallet.com. Twitter: @halmbundrick.

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 FHA vs Conventional loans

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Are Homes More Affordable – Chuck Barberini Real Estate

Chuck Barberini Real Estate – BR Real Estate Group

Check out this article from Realtor Magazine Online. It is a real unique look at the housing market and offers a very original point of view. It gives us some good insight into the rapid rise of house prices and how they compare to the prices prior to the pre-crash prices.

Homes Are More Affordable Than 20 Years Ago

DAILY REAL ESTATE NEWS | WEDNESDAY, NOVEMBER 08, 2017

Homes are actually more affordable now than they were in the late 1990s, according to the latest Mortgage Monitor Report by Black Knight Inc., a mortgage data and performance information provider.

A Closer Look: NAR’s Housing Affordability Index

Interest rates have plunged by 40 basis points over the past six months. However, the bulk of the potential savings is offset by the accelerating rate of home price appreciation across the country.

“Rising home prices continue to offset the majority of would-be savings from recent interest rate declines, which has kept affordability near a post recession low,” says Ben Graboske, executive vice president of data & analytics for Black Knight. “That being said, when viewing the market through a longer-term lens, affordability across most of the country still remains favorable to long-term benchmarks.”

As of September, 21.4 percent of the median income nationwide was required to purchase a median-priced home. From 1995 to 1999, that percentage was 24.2 percent, and from 2000 to 2003 it was 26.2 percent, according to Black Knight’s report.

While the monthly payment needed for a median-priced home is up $100 from a year ago, the national “payment-to-income” ratio remains 2.8 percent below averages from the late 1990s, according to the report.

“In looking at the affordability landscape across the country, we certainly see varying levels of affordability in each market compared to their own long-term benchmarks,” Graboske says. “But, by and large, the overall theme is that affordability in most areas, while tightening, remains favorable to long-term norms.”

Black Knight researchers note that 47 of 50 states’ payment-to-income ratios remain below their 1995–2003 averages. Hawaii, California, Oregon, and Washington, D.C., are the lone exceptions, where payment-to-income ratios are higher today than their long-term benchmarks.

Source: Black Knight Inc.

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It’s Christmas – A Different Kind of Poem – Chuck Barberini

It’s Christmas – My boy Christopher is home for a couple of weeks and I saw this last night and it really hit me… It touched me and made me sad, it made me happy and proud, it made me think about the sacrifices of so many and how blessed we are to be American… Thank you to those in service all over the world, away from home… Merry Christmas.

Take a minute to read this poem and let me know what you think.

Different Christmas Poem

The embers glowed softly, and in their dim light,
I gazed round the room and I cherished the sight.
My wife was asleep, her head on my chest,
My daughter beside me, angelic in rest.


Outside the snow fell, a blanket of white,
Transforming the yard to a winter delight.
The sparkling lights in the tree I believe,
Completed the magic that was Christmas Eve.


My eyelids were heavy, my breathing was deep,
Secure and surrounded by love I would sleep.
In perfect contentment, or so it would seem,
So I slumbered, perhaps I started to dream.


The sound wasn’t loud, and it wasn’t too near,
But I opened my eyes when it tickled my ear.

Perhaps just a cough, I didn’t quite know,
Then the sure sound of footsteps outside in the snow.


My soul gave a tremble, I struggled to hear,
And I crept to the door just to see who was near.

Standing out in the cold and the dark of the night,
A lone figure stood, his face weary and tight.


A soldier, I puzzled, some twenty years old,
Perhaps a Marine, huddled here in the cold.
Alone in the dark, he looked up and smiled,
Standing watch over me, and my wife and my child.


“What are you doing?” I asked without fear,
“Come in this moment, it’s freezing out here!
Put down your pack, brush the snow from your sleeve,
You should be at home on a cold Christmas Eve!”


For barely a moment I saw his eyes shift,
Away from the cold and the snow blown in drifts…
To the window that danced with a warm fire’s light
Then he sighed and he said “It’s really all right.


I’m out here by choice. I’m here every night. ”
“It’s my duty to stand at the front of the line,
That separates you from the darkest of times.
No one had to ask or beg or implore me,

I’m proud to stand here like my fathers before me.


My Gramps died at ‘ Pearl on a day in December,”
Then he sighed, “That’s a Christmas ‘Gram always remembers. ”
My dad stood his watch in the jungles of ‘ Nam ‘,
And now it is my turn and so, here I am.


I’ve not seen my own son in more than a while,
But my wife sends me pictures, he’s sure got her smile.
Then he bent and he carefully pulled from his bag,
The red, white, and blue… an American flag.


I can live through the cold and the being alone,
Away from my family, my house and my home.
I can stand at my post through the rain and the sleet,
I can sleep in a foxhole with little to eat.


I can carry the weight of killing another,
Or lay down my life with my sister and brother.
Who stand at the front against any and all,
To ensure for all time that this flag will not fall.”


”  So go back inside,” he said, “harbor no fright,
Your family is waiting and I’ll be all right. ”
“But isn’t there something I can do, at the least,
“Give you money,” I asked, “or prepare you a feast?

It seems all too little for all that you’ve done,
For being away from your wife and your son. “


Then his eye welled a tear that held no regret,
“Just tell us you love us, and never forget.
To fight for our rights back at home while we’re gone,
To stand your own watch, no matter how long.


For when we come home, either standing or dead,
To know you remember we fought and we bled.
Is payment enough, and with that we will trust,
That we mattered to you as you mattered to us. “


PLEASE, would you do me the kind favor of sending this to as many
people as you can? Christmas will be coming soon and some credit is due to our
U. S. service men and women for our being able to celebrate these
festivities. Let’s try in this small way to pay a tiny bit of what we owe. Make people stop and think of our heroes, living and dead, who sacrificed themselves for us.

LCDR Jeff Giles, SC, USN
30th Naval Construction Regiment
OIC, Logistics Cell One
Al Taqqadum, Iraq

“Real Integrity is doing the right thing, knowing that no body’s going to know whether you did it or not. “

PFC Christopher Barberini

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