[ ‘mooviNG ]
adjective: in motion. operating. working. going. on the move. active.December 9, 2013
You may think differently with the holiday season in full swing… but the end of the year is a great time for growing families to move, and/ or renters to become homeowners. Tax savings, less competition, and upcoming changes for 2014 are all benefits to moving now!
Tax Savings : Closing on your new home by the 31st is great because you can deduct mortgage interest, property taxes, and points on your loan on your income tax return.
[If you’re not moving, you can still get big savings by taking action now. Make your January mortgage payment in December and get credit for the interest deduction – just a helpful tip!]
Less Competition : Generally throughout summer and into the fall months, the market stays very active. Then as winter hits, holidays pick up and people get busy. We see the market react to this as well and it slows. However, it never stops! Listing your home now, with fewer homes on the market can give your property the advantage it wants when it comes to potential buyers.
Upcoming Changes : New mortgage rules will go into effect at the beginning of 2014 and are meant to avoid a repeat of the housing crisis in 2008 and 2009. With the hope of making mortgage lending less risky, the standards for approving loans are being raised through the Qualified Mortgage (QM) Rule.
Those that will feel the biggest impact from this update will be those who are struggling with consumer debt and are living paycheck to paycheck. Anyone whose debt-to-income ratio is higher than 43%, will not get approved. Currently, less strict and around 45%, loan officers are noticing a lot of potential buyers are hovering around that mark. Just a few percentages down, can make a big difference. Banks will also limit the fees for originating mortgages to no more than 3% of the loan amount.
So what does this mean for you if you’re entertaining the thought of a move?
2014 Forecast : Mortgage rates gradually climbed in 2013 and are expected to rise to 5% in 2014. This, along with the QM rule, will define both the lending industry and the real estate market. In addition, the National Association of Realtors predicts the continuation of raising home prices. So if you’re thinking about it… buy/sell now and start 2014 already settled in your new home!