Jada’s Blog

Risky Loans Tempt Homebuyers

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As mortgage interest rates rise, homebuyers like you may be wishing for easier, cheaper loans to obtain, but any loan that isn’t conventional or government-guaranteed could put you at greater financial risk. Remember the Great Recession of 2008? It was the first and only time that unsustainable mortgage loans resulted in a nationwide housing crisis.

National Association of REALTORS chief economist Lawrence Yun says that rising yields in U.S. Treasuries explain why mortgage interest rates are exceeding 7% for a 30-year fixed-rate mortgage.

In response, borrowers are returning to adjustable-rate and hybrid loans, interest-only loans, and 2-1 buydowns. The danger for borrowers is much higher mortgage interest rates and bigger mortgage payments when the loans reset. However, borrowers can save money if they choose the right loan product and correctly estimate how long they’ll occupy their homes and refinance or sell their homes – before rate adjustments get too high.

Fixed-rate mortgages (FRMs) have the same interest rate for the life of the loan. Adjustable-rate mortgages (ARMs) adjust periodically with caps on how often the rate can change and how much higher the rate can go beyond the initial FRM rate. A hybrid loan has an initial fixed rate for a term of one, five, seven or ten years, then converts to an adjustable rate at the end of the term. Typically, homeowners stay for about 10 years before selling, so a 10-year term allows them to enjoy the benefits of a FRM at a much lower cost.

Home Decorating Trends Making a Comeback

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Sooner or later, all interior design trends change, and often in the opposite direction. After years of cool minimalism, homeowners are turning toward warmer, cozier colors, fabrics, and wall coverings to maximize comfort. So what’s old but new for home décor in 2023?

Greens and other warm neutrals

Colors come in two ranges – warm and cool, and warmer colors are seizing the moment away from greys and pure whites. Golds and avocado greens from the 1960s and 1970s revolutionized kitchen appliances making complementary autumn colors like oranges, tans and browns wildly popular. If you like the look of clean look of white and grey, but want trendier colors, try cream, beige and other earth tones instead.

Texture everywhere

Texture gives neutral colors like beige, stone and greys more interest. Not since interior designers Dorothy Draper and William Haines popularized “Hollywood Regency” in the 1930s, ‘40s and ‘50s, has opulent maximalism been revived as well as it is today. Apartmenttherapy.com recommends getting the glamorous look with gold or shiny metallic accents pieces, jewel tones such as emerald green, mirrors with speckles and sparkle, a touch of Chinoiserie fabric on chairs or in wallpaper, and crystal chandeliers. Plaster, a lime-based putty, adds depth to colors and textures. You can achieve this look with special paint finishes.

Wallpaper scenes

In the 1920s, wallpaper was the ultimate status symbol, according to SouthernLiving.com. Murals and larger repeat prints give interiors unique personality, texture and color. And unlike removal in the past, today’s wallpaper is peel and stick.

Housing Outlook 2023

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What will the new year bring for homebuyers, homeowners, and home sellers? Lower or higher home prices? Higher or lower mortgage interest rates? Or a continuation of the overheated pandemic-inspired housing market?

There’s no question that the blistering housing market of the past three years was hard on homebuyers. By October 2022, the average mortgage interest rate for a 30-year fixed is 7.24%, more than double the 3.22% level in January 2022.

According to Fannie Mae, the combination of high inflation, monetary policy tightening, and a slowing housing market is “likely to tip the economy into a modest recession in the first quarter of 2023.”

Many economic forecasters believe housing prices will decline, but that homebuyers shouldn’t fear buying during a declining market. Morgan Stanley predicts a 7% dip in home prices for 2023 that would return housing prices to where they were in January 2022 – 32% higher than prices were in March 2020 when the pandemic began. Economists with Goldman Sachs and Moody Analytics are predicting 5% to 10% declines in home prices, based on a lack of homebuyer affordability, slowing housing sales, fewer mortgage applications and a looming recession, however mild.

BusinessInsider.com reports that the Federal Reserve’s overnight rate hikes have raised mortgage interest rates, pushing affordability to new lows, but that a recession could bring interest rates down again. That combined with softer homebuying demand due to inflation and sellers lowering their prices would make spring and summer 2023 great times to buy a home.

National Luxury Market Report for December 2022

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In this month’s report we look at why the affluent are taking the long view with respect to luxury real estate ownership. As the market continues to cool compared to 2021, it is interesting to look at the current real estate trends and the mindset of the affluent.

Get Ready to Buy a Home in 2023

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Inflation, home prices, and interest rates were higher in 2022 than they’ve been in years, but if you’re planning to become a homeowner in 2023, you’ve got time to improve your buying power.

TheMortgageReports.com recommends talking to a mortgage lender, even if you aren’t ready to buy until later in the year. They can “review all aspects of your financial picture” and help you find sources for a down payment, help you raise your credit score to improve your future borrowing rate, and help you find ways to reduce your existing debt without triggering costly inquiries into your credit history. Most important, they can help you understand the differences between conventional (Fannie Mae, Freddie Mac) and government-guaranteed (FHA, VA, USDA) loan programs and help you choose the right loan so you can work toward qualifying for the most favorable terms.

Your goal for the near term is to save as much as possible toward a down payment. With VA or USDA loans, no down payment is required, but for other loans, you’ll need at least 3.5% of the purchase price of the home you plan to buy as a down payment. At the same time, you want to pay down debts, beginning with the least expensive credit card balances to improve your credit scores. Don’t close any accounts, or incur new debt. Keep your revolving loan balances to 30% or below your credit limits. The higher your credit score, the more loan options are available to you.

Inheriting a Home with Siblings

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You and your siblings are notified by the executor of an estate that you’ve jointly inherited a house. According to TrustandWill.com, the executor provides the probate court with a death certificate, trust documents, the estate plan, and an inventory of the estate’s assets and debts.

Have a meeting with the other inheritors and determine a course of action. Unless otherwise stated in the will, each of you should have an equal share as well as an equal share of any debts, such as a mortgage, utilities, and maintenance. You can contact the property insurer to see if the policy can be put in one of your names. Inheritancefunding.com recommends getting a title check to make sure the property has no outstanding liens. Then, plan to visit the property to inspect it for damage, deferred maintenance, and water or gas leaks.

The property’s location, condition, and value as well as the estate’s debts can help you decide whether you and your siblings keep the home, sell it, rent it, or occupy the property. If there’s a mortgage, you can keep making the payments, refinance to a lower interest rate, let it go to foreclosure, or sell the property and split the profits.

If one sibling wants to sell while another wants to retain the property, one can sell their interest in the home to the other heir using a private arrangement or a loan from an inheritance funding company. If the siblings can’t reach an agreement, the executor notifies the court to arrange the sale of the property.

National Luxury Market Report for November 2022

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The luxury real estate market is currently facing some interesting challenges as buyers and sellers hesitate in the home purchase decisions.  We seek to unravel some of the contradictions and address what influencing the current spending habits of the affluent. 

Design-it-yourself Decorative Fabric

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You want your home to reflect your personality, and one adventurous way to decorate it is by designing and printing your own fabric. As your own artist, you can personalize your home with unique colorways, designs and patterns for curtains, pillows, wall hangings, upholstery, or household items like table toppers, dish towels, pot holders and more.

ArtFabrics.com offers a way to you create your own design using their Pattern Lab. You can browse the site’s patterns or you can upload an image of your own, control how it repeats and the colors you prefer. At Zazzle.com, you may choose existing designs and modify colors, shapes and sizes of the prints to your needs. Spoonflower.com is a terrific source of artisan fabric if you prefer something original but don’t want to design it yourself.

Next, choose the fabric composition that you want – all cotton, linen, silks, polyesters and blends. The site will tell you which weaves and thicknesses are most appropriate for your project. You can order a sample book and feel the “hand” of the various samples to make your choice.

Digital printing on fabric is vivid and clear when it employs “reactive” rather than pigment printing methods. Reactive ink penetrates the fabric while pigment ink, a combination of color and glue adheres to the surface and is susceptible to fading, cracking and stiffness.

If you don’t know how to sew or reupholster a chair seat, look online for tutorials or you could hire someone to make your decorative items for you.