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Is it better to buy or rent?
The question of whether it is better to buy, or rent, will always exist. This is because the answer has a lot more to do with each individuals unique situation and their personal goals. We have composed a list of a few considerations that you should consider.
Supporters of buying a home point out you are making an investment. This is because not only are you paying down your mortgage total with each additional month you live in your home, but homes also typically increase by 5% each year in value. Combine the two together and you can quickly build wealth in equity. Additionally, if/when you decide to rent out your home your renters are essentially paying your mortgage. When you no longer have a mortgage, you will have positive cash flow every month.
Advocates of renting claim that the additional costs that accompany owning a home, such as taxes, interest payments, maintenance, unexpected repairs, ect. can add up rather quickly. They point out that there is no guarantee that those expenses will be regained when it comes time to sell the home. Rather than investing in a home, you might consider investing in stocks, bonds, and other financial securities.
Either way you are paying somebody’s mortgage until the home is paid off.
How long do you plan to stay in the home?
If your intention is to reside in the property for no more than five years, renting may be the more financially prudent choice. This is because the upfront costs associated with homeownership are typically spread out over the duration of a mortgage loan. Conversely, the longer you anticipate living in a home, the more advantageous it becomes to buy rather than rent. Therefore, if you’re prepared to commit to a residence for 7 to 10 years, purchasing a home is likely the optimal path. Over this timeframe, there’s a strong likelihood that the property will appreciate in value, offering potential financial gains in the long run.
Consider the Market Where You Plan to Live:
Every market is unique. It’s important to know what is happening in real estate on a national scale, but local as well. When purchasing, it is of the utmost importance to pay close attention to what is happening in the local markets. What is happening in one city might be drastically different than what is happening in another. Remember, when evaluating housing expenses, it is essential to consider the current market conditions in your city and even neighborhood, rather than relying on nation expenses. Look both at home prices and rental rates.
Consider the Cost of Buying and the Cost of Renting:
There are costs associated with both buying and renting. When you rent you typically need to pay upfront, your first and last month’s rent and a security deposit. This could be a hefty upfront cost. When buying your first mortgage payment often isn’t due the first month. However, there are escrow fees, closing costs and downpayments to consider. Be sure to talk to your lender so this doesn’t come as a surprise. If you plan right, you might even be getting back your security deposit from your previous rental that can help cover any costs. Your lender can help you determine if buying is right for you. They can provide options you might not have thought of. You might discover that you can buy a home for a monthly payment that is close to what you might rent for. Keep in mind when you buy, each payment made increases your equity.
Lifestyle:
When it comes to lifestyle differences between buying a home and renting one, ownership offers distinct advantages. Homeownership often means greater flexibility and freedom in personalizing your living space. For instance, homeowners have the liberty to make renovations, upgrades, and alterations to suit their preferences and needs. This includes options like painting walls, landscaping the yard, or even adding additional rooms. Additionally, homeowners typically have more flexibility in keeping pets, as they are not bound by the restrictions often imposed by landlords in rental properties. These aspects contribute to a sense of stability, security, and personalization that renting may not always offer.
Repairs and Improvements:
Keep in mind, when you are a homeowner you are responsible for the costs of repairs and maintenance. When looking to buy, it is important to get an inspection to have peace of mind that you are purchasing a sound home, or that you are aware of the costs associated with needed repairs and have taken them into consideration.
Can the home create an alternative revenue stream?
When making your considerations, be sure to weigh the potential opportunity for additional streams of income with the purchase of a home. Homes and properties have the potential to serve as valuable assets beyond just providing a place to live. They can also be sources of additional income streams. One way to generate extra revenue is by renting out space within the property, such as a spare bedroom, basement, or even an entire accessory dwelling unit (ADU). This can be particularly lucrative in areas with high demand for rental housing. Additionally, homeowners can utilize their property as office space for side jobs or small businesses, saving on external rental costs. For those interested in sustainable practices, properties with ample outdoor space can accommodate activities like beekeeping, gardening, or even hosting events, which can provide supplementary income while also contributing to environmental conservation efforts. By leveraging their properties in creative ways, homeowners can unlock various opportunities to generate additional revenue streams.
Do you have alternative investment opportunities available to you?
Under the right circumstance purchasing a home can be an easy way to invest. You can create significant savings while living in your home. However, for others renting an apartment and investing savings in stocks, bonds, and other financial securities is better for their circumstances.
Speaking with a financial advisor about your specific financial situation can help. A financial advisor can break down what you need to do to get the best return on your investments. They can also see the big picture for your unique situation when it comes to your money.
One Last Money Saving Consideration:
One significant benefit to buying is that if you can pay extra towards your monthly mortgage, you can knock years off the life of the loan. For example, if you pay an additional $300 a month towards a 30-year, $300,000 loan, you will take eight years off the life of the loan. You reduce your final bill by more than $63,000. That is savings you would never see if you rented. Additionally, every time you make that extra payment your equity in the home also increases.
For a unique look at your situation connect with your trusted Realtor. If you do not have one, connect with one of our experts. They can provide guidance in navigating your findings, analyzing additional factors, and exploring various home options. Click here to connect with a knowledgeable professional who can provide personalized assistance tailored to your unique needs and preferences.
Differences Between Pre-Qualified and Pre-Approved
It can be difficult to understand real estate jargon when it’s your first time purchasing a home. If you are in the process of purchasing or considering buying, we are here to help. One of the biggest misconceptions has to do with understanding the differences between pre-qualified and pre-approved when applying for a home loan. So, we took the question to the pros! We connected with Michelle Schmidt, a lender with Movement Mortgage. Michelle explained that while, “pre-approval and pre-qualified sound similar, they have significant differences when it comes to securing a loan or line of credit.” Are you ready to explore some of those differences with us?
Pre-qualified:
- Initial estimate: Based on basic information you provide, like income and debt, the lender gives a rough idea of the loan amount you might qualify for.
- Less rigorous process: No formal application or documentation required, often done online or with minimal verification.
- Not a guarantee: Not a firm commitment from the lender. Your actual approval may differ depending on further verification and credit checks.
- Lower commitment: Can be helpful for budgeting and narrowing down your search, but less persuasive to sellers or lenders.
Pre-approved:
- Formal commitment: Requires a full application and credit check. The lender verifies your income, assets, and debts. Generally, will also run your file through underwriting.
- More specific: You receive a pre-approval letter stating the exact loan amount, interest rate, and conditions you qualify for, under specified circumstances.
- Stronger leverage: Makes your offer more competitive to sellers, as it shows you’re a serious buyer with proven financing ability.
- Higher commitment: Requires more effort and may involve a hard credit inquiry affecting your credit score slightly.
Here’s when to choose each:
- Pre-qualified: Start your research, understand your potential borrowing power, and set budget limits.
- Pre-approved: When you’re serious about buying and want to make competitive offers or secure specific rates.
Michelle says, “In short, pre-qualified is like a preliminary assessment, while pre-approved is a conditional guarantee”. When planning to buy, it is important to assess your financial positioning. A lender can help you ensure your finances align with your home ownership goals. Talking with a lender early on can help you set your goals in motion and can help you feel confident in your purchase when you are ready to buy. When you are ready, getting your pre-approval is of the utmost importance. Your pre-approval letter demonstrates to the seller your seriousness about purchasing a home. It shows that you have done the legwork and is proof that you can purchase the home.
If you have any further questions about the differences between pre-qualified and pre-approved or any other loan or real estate term don’t hesitate to reach out to Michelle Schmidt, your own trusted lender, or get connected with one of our realtors if you are not currently working with your own by clicking here.
The Tulip Dance
What once was a boring parking lot has become transformed into a peaceful River Walk. This is your opportunity to walk along the Skagit River in Downtown Mount Vernon. Located in historic downtown Mount Vernon between Gates Street, First Street, Myrtle Street and the Skagit river, this park encompasses 30,000 square feet of riverfront making for the perfect walk along the water. While secured with a permanent floodwall, over the years has become a beautiful outdoor art gallery perfect for perusing or place for a picnic.
The Tulip Dance:
As you walk the plaza you will discover lovely art structures. For example, pictured is the “Tulip Dance”. This piece was created by husband and wife team, David Feri and Jennifer Corio to honor the Skagit Valley Tulip Festival. The oversized metal tulips stand over 14 feet tall and are a combination of both steel and aluminum with a powder coated finish. The beautiful piece was donated to the city by the Blackburn family.
Click here to learn more about Mount Vernon. Thinking about moving to Skagit Valley? Connect with us.
Have You Considered New Construction?
Have you considered new construction? If not, here are several reasons why you should expand your search criteria to include new construction homes.
Buying from a builder is certainly different from buying from a home seller. Builder contracts can be challenging. This alone might have you a bit hesitant to consider a new construction home. Just remember, when purchasing your home your realtor will assist you throughout the entire process whether you are purchasing an existing home or a new build.
If you have not yet partnered with a local real estate expert, connect with us.
Here’s why you should considered a new construction home:
Considering a new construction home increases your pool of opportunity. Sometimes, buying a new construction home allows you to have a say in creating the home of your dreams. Better yet, you can often get new construction home with reduced rates. Follow along as we discuss each of these benefits of purchasing a new construction home further.
The new construction market increases your pool of opportunity:
On a positive note, we are experiencing a slight increase in inventory of existing homes for sale. However, when compared to historically standard numbers of homes for sale, such as in 2018 and 2019 inventory of existing homes today is still low. Low inventory can leave buyers feeling as if they have exhausted all their options. When this happens, buyers may feel as if buying a home is just out of their reach. If you are finding yourself feeling this way, have you considered new construction? New construction has begun to see an uptick providing buyers a huge opportunity. If you are in search of a turn-key home or you want the ability to customize your own home, you have more options right now. Not only do you have more options, but many builders are offering lower rates. Keep reading to find out why.
You have a say in creating the home of your dreams:
Purchasing a new construction home offers the unique opportunity to customize and tailor the property. Customization allows the home to fit your specific needs and preferences. Unlike buying an existing home where you may need to compromise on certain features, sometimes new construction allows you to make decisions on everything from the layout and floor plan to the finishes and fixtures. This level of customization ensures that the home truly reflects your personal style and requirements. Are you ready to create a space that feels like yours from the moment you move in? Additionally, being involved in the construction process allows you to incorporate modern design trends, energy-efficient features, and the latest technology, ensuring that your home meets both your current and future needs. Overall, the ability to customize a new construction home offers unparalleled advantages in creating a living space that perfectly suits your lifestyle and preferences.
Be sure to refer to your agent who can assist you on determining the quality of construction. Keep in mind your local agent has knowledge of local builders reputations. They can help you review and negotiate your contract to help you get the best terms. As an added bonus, they can walk you through which customizations and upgrades will benefit you most not only as an owner but also to help get you the best return on investment if you ever decide to sell in the future.
Don’t have an agent? Connect with us to get paired with one here.
New construction builds can come with reduced rates:
If you weren’t convinced that you should consider new construction already, you will be when you learn that some builders who have already broke ground on construction offer incentives to help buyers be able to afford a new construction. Keep reading to find out why and explore some of the options.
The simple truth is, the longer a new construction home sits on the market the more it costs the builder. Builders are eager to sell you the home because they are not living in it. First American’s Chief Economist, Mark Fleming explains:
“Builders aren’t rate locked-in. They would love to sell you the home because they’re not living in it. It costs money not to sell the home. And many of the public home builders have said in their earnings calls that they are not going to be pulling back on incentives, especially the mortgage rate buydown, so that will help the new-home market continue to perform well in the spring home-buying season.”
One of the most popular incentives we are seeing with builders are rate buy-downs. You might be wondering what a rate-buydown is and how it impacts you as a buyer.
A rate buydown is a real estate financing strategy used to lower the initial interest rate on a mortgage loan for a certain period. This is typically done by paying additional upfront fees to the lender. These fees are often referred to as “points”. Each point purchased reduces the interest rate.
There are two main types of rate buydowns:
- Temporary Buydown: With this type of buydown, typically the borrower pays additional upfront fees to the lender. In this case, the builder would on behalf of the borrower. These fees are used to subsidize the mortgage payments during the initial years of the loan term. For example, in a 2-1 buydown, the interest rate is reduced by 2% in the first year, 1% in the second year, and then returns to the original rate for the remainder of the loan term.
- Permanent Buydown: In a permanent buydown, typically the borrower pays additional upfront fees to permanently reduce the interest rate over the entire loan term. In this case, the builder would pay on behalf of the borrower. This results in lower monthly mortgage payments throughout the life of the loan.
Overall, rate buydowns can be beneficial for borrowers who want to lower their initial mortgage payments, qualify for a larger loan amount, or afford a higher-priced home. However, it’s important for borrowers to carefully evaluate the costs and benefits of a rate buydown to determine if it aligns with their financial goals and long-term plans.
If you have questions or are considering opening up your search to include new construction and would like to partner with one of our agents please do not hesitate to connect with us.
Down payment? You’ve got options
If you are considering purchasing a home, it is likely that you have heard that you will need a down payment. If you are a first time home buyer, you might not fully understand your down payment options. We have connected with Michelle Schmidt from Movement Mortgage who has provided information to help you better understand. Keep reading for an explanation of down payments and your options as a buyer.
A down payment is an initial, partial payment made upfront when purchasing a home. It’s expressed as a percentage of the total purchase price, with the remaining amount financed through a loan.
Here’s a breakdown of down payments:
Function:
- Reduces the amount you need to borrow.
- Signals to the seller your seriousness about the purchase.
- Influences your loan terms, like interest rates and mortgage insurance.
Typical amounts:
- Homes: Usually between 3% and 20%, with 20% being ideal for avoiding private mortgage insurance (PMI). Not sure what PMI is, connect with us we will help you better understand.
Factors to consider:
- Budget: How much can you comfortably afford to put down without impacting other financial goals?
- Loan type: Some mortgages, like FHA loans, have lower minimum down payment requirements. Be sure to discuss which loan is right for you with your trusted lender.
- Credit score: A higher score may qualify you for better loan terms, even with a lower down payment.
Benefits of a larger down payment:
- Lower monthly payments: You borrow less, so your payments are smaller.
- Lower interest rate: Lenders see you as a less risky borrower and may offer a lower rate.
- Build equity faster: You own a larger portion of the property from the start.
Downsides of a large down payment:
- Less available cash: You have less money for other needs or investments.
- May delay purchase: Saving a large down payment can take time.
Some lenders, like Movement Mortgage offer down payment assistance programs for buyers who need a little extra help. Connect and see if it is a good option for you.
Feel free to ask if you have any specific questions about them or need help calculating how much you might need for a particular purchase.
If you are not currently working with a Realtor and would like to connect, reach out to us here.
The Skagit Tulip Festival
Are you ready for an enchanting annual event that blankets the Skagit Valley in vibrant colors? Every spring, the expansive fields in Skagit Valley burst into bloom with millions of tulips, creating a floral wonderland that draws visitors from near and far. The Skagit Valley Tulip Festival celebrates the breathtaking beauty of these blossoms, inviting attendees to meander through the meticulously arranged rows of tulips, capturing the essence of nature’s artistry. With Mount Baker as a majestic backdrop, the scene is nothing short of breathtaking, and the vivid hues of red, yellow, purple, and pink provide an awe-inspiring experience for all who attend. Beyond the fields, the festival features the Tulip Festival Street Fair in Downtown Mount Vernon, live music, food vendors, and a range of family-friendly activities, creating a joyful and festive atmosphere that showcases the splendor of the Pacific Northwest’s springtime charm. Ready to jump in the car and go? Check the interactive map here to see where the tulips are blooming. Interested in learning more about tulips? Discover bloom information including the lifecycle of tulips here.
Ready to make Skagit Valley your home? Connect with us.
A Modern Masterpiece with Incomparable Views
A modern masterpiece with incomparable views can now be found in the charming town of La Conner. It could be yours. This truly extraordinary home redefines luxury living. Found atop 502 High Street, this exceptional property stands out from the rest. Keep reading to discover the multitude of reasons that make it a coveted gem in the area.
Own both the home and the land
First and foremost, unlike many homes in La Conner that are situated on leased land, this residence is fee simple. This means homeowners experience peace of mind and security by owning both the home and the land. This distinction sets it apart as a rare find in the community, adding an extra layer of value and desirability.
Award-winning local builder
Designed and crafted by the renowned, award-winning local builder, BYK Construction. They believe that “everyone deserves the peace of mind knowing they come home to quality”, as is demonstrated throughout this luxurious home. This home showcases the epitome of modern architectural excellence. Boasting sleek lines, contemporary finishes, and thoughtful design elements, it stands as a testament to superior craftsmanship and attention to detail.
Breathtaking panoramic views
One of the most captivating features of this home is its breathtaking panoramic views. From the expansive windows and outdoor living spaces, residents can enjoy sweeping vistas of quilted farmlands, majestic Mt. Baker, the rugged beauty of the Cascade Mountains, and the sparkling waters of the Salish Sea. Whether basking in the warm glow of sunrise or witnessing the vibrant hues of sunset, every moment in this home is accompanied by nature’s ever-changing masterpiece. Can you imagine yourself waking to fields bursting with color during the daffodil and tulip festivals showcased by the magnificent mountains in the distance? If so, schedule your personal showing of this home now.
Incredible design
Inside, the interiors are equally impressive. Architecture that blends form and function seamlessly to create an atmosphere of refined elegance and comfort. High ceilings, open concept living areas, and luxurious amenities are thoughtfully integrated to enhance daily living and entertaining alike. From the gourmet chef’s kitchen and sumptuous master suite to the inviting living spaces and stylish design elements, every aspect of this home exudes sophistication.
Luxury lifestyle
Beyond its impeccable design and stunning views, this residence offers a lifestyle of unparalleled luxury and convenience. Whether indulging in outdoor adventures, exploring the vibrant local arts scene, or simply relaxing in the tranquility of nature, residents will find endless opportunities for enrichment and enjoyment right at their doorstep.
502 High Street, La Conner represents a rare opportunity to experience the best of modern luxury living in one of Washington’s most picturesque locations. With its exceptional design, breathtaking views, and unparalleled quality, this home is more than just a place to live – it’s a place to thrive. Don’t miss your chance to make this extraordinary property your own and experience the ultimate in Pacific Northwest living.
Are you interested in scheduling a tour of this incredible home? Connect with us here to schedule your personal viewing.
Listed by: Colleen Craig and Julie Birkle
Discount Points Explained
If you are considering purchasing a home, it is likely that you may have heard the term discount points. It is also likely that you might not fully understand what they are, how they are used, or if they are right for you. Michelle Schmidt from Movement Mortgage has provided information to help you better understand. Keep reading for discount points explained.
Discount points, also known as mortgage points or simply points, are a type of prepaid interest that borrowers can purchase to lower the interest rate on their subsequent monthly payments. In simpler terms, it’s like spending more upfront to pay less over the term of your mortgage.
Here’s how it works:
- Each point typically costs 1% of the total loan amount. So, for a $400,000 loan, one point would cost $4,000.
- Paying for points reduces the interest rate on your loan. For example, paying one point on a $400,000 loan with a 6.75% interest rate might lower the rate to 6.25% a saving of $156 per month. The $4000 upfront cost divided by the saving of $156 would take approx. 26 months to recoup the initial expense.
- The lower interest rate translates to lower monthly payments. Over the life of the loan, you could save thousands of dollars in interest.
Here are some things to keep in mind about discount points:
- They are not always a good deal. It only makes sense to buy points if you plan on keeping your loan for an extended period of time. Otherwise, you may not recoup the upfront cost of the points in lower interest payments. You can also negotiate with the seller to pay your points and or closing costs.
- You can’t deduct discount points from your taxes unless you itemize your deductions.
These are additional resources that you may find helpful:
- NerdWallet: https://www.nerdwallet.com/article/mortgages/discount-points
- Consumer Financial Protection Bureau: https://www.consumerfinance.gov/consumer-tools/mortgages/
It is important to connect with a trusted lender and realtor that can help you determine if discount points are right for you. They will take into consideration your unique financial situation and your goals to develop the ideal approach. If you are not currently working with a realtor, connect with us.
Skagit Daffodil Festival
Over 450 acres of daffodils begin to bloom in Skagit Valley during the month of March. An annual celebration that heralds the arrival of spring with an explosion of golden blooms. Each year, as winter fades, the daffodils burst forth in brilliant hues, blanketing the valley in a vibrant carpet of yellow. The Skagit Daffodil Festival that takes place in La Conner showcases nature’s beauty and resilience, as these cheerful flowers bring hope and warmth to the hearts of all who attend.
Visitors from near and far are treated to a stunning display of daffodil fields, with the backdrop of the North Cascades lending an enchanting touch. The festival’s parades, events, and activities unite the community in the spirit of this bright and blossoming season, creating lasting memories and a sense of shared wonder. It’s a time when Skagit County truly shines, offering a warm welcome to spring and reminding all who come that the Pacific Northwest is home to not only breathtaking natural landscapes but also vibrant celebrations of life.
To learn more about the festival and discover fun facts about these amazing flowers Click here.
Visit the Skagit Daffodil Festival fields:
Return to this map to see which fields are blooming. The map is updated daily. (Provided by Visit Skagit Valley Washington)
Love Skagit Valley so much you are interested in making Skagit Valley your forever home? Connect with us.
Spring Cleaning
The warmer months are approaching here in the pacific northwest. Warmer weather means it is time to gear up for spring cleaning and maintenance. Regardless of whether you rent or own, a clean home not only offers a fresh start, but also enhances the comfort and enjoyment of your living space. A clean and organized home is more comfortable and enjoyable to live in. By decluttering, tidying up, and refreshing your living space, you can create a more inviting atmosphere. Whether you are tackling tasks indoors or outdoors, here’s a checklist to guide your efforts and ensure efficiency.
Indoors:
Check Your Attic:
Before the summer heat sets in, inspect your attic for sufficient insulation, signs of pests, and any potential roof leaks.
Schedule HVAC Maintenance:
Ensure optimal performance and energy efficiency by scheduling annual tune-ups for your heating and cooling systems.
Clean and Repair Window Screens:
Get ready to welcome the fresh air by repairing or replacing damaged window screens.
Clean (especially the Ceiling Fans):
Dust, allergens, and other pollutants can accumulate over the winter months, reducing your indoor air quality. Improve your indoor air quality by dusting, vacuuming, and cleaning surfaces, to remove these contaminants and create a healthier living environment. Don’t forget, you can quickly improve air circulation and energy efficiency by simply giving your ceiling fans a thorough cleaning.
Apply Weather Stripping:
Seal gaps around windows, doors, and exhaust fans to keep cool air in, hot air out, and prevent the creepy crawlers from making their way into your home.
Outdoors:
Check for Damaged Roof Shingles:
If you are not in a place to pay a professional or get on your roof yourself, use binoculars or a drone to inspect your roof for any curling, broken, or missing shingles.
Wash the Exterior:
A great way to extend the life of your exterior paint and enhance curb appeal is to wash the siding with a stiff brush and water.
Search Out Rotten Wood:
Identify and address areas of rot on both siding and trim to prevent further damage that could end up quite costly if left unaddressed.
Clean the Gutters:
Prevent overflow and flooding by cleaning out your gutters and downspouts. Don’t want to do it yourself? Hire a professional to. Don’t know one? Connect with us and we can provide you several suggestions.
Prepare Your Lawn to Grow:
Rake away dead grass, aerate the lawn, reseed bare spots, and apply spring fertilizer to promote healthy growth.
By tackling these spring cleaning and maintenance tasks, you will ensure your home is ready to shine inside and out, making the most of the beautiful seasons ahead here in the pacific northwest. Remember, if you are a homeowner, regular maintenance and cleaning can help preserve the condition of your home and prevent deterioration. This can contribute to maintaining or even increasing your home’s value over time, which is beneficial when you decide to sell.
If you are considering selling, connect with us. We can help you determine a task list of importance.
If you need motivation, check out our Spring Cleaning Spotify Playlist Here.
