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  • Do You Like Low Interest Rates?

    May 9, 2017 /
    Pickett Street Properties Team /

    Interest Rates Unchanged After The Fed's Wednesday Meeting After its meeting this Wednesday, the Fed voted to leave interest rates unchanged, keeping its benchmark rates at 0.75-1.00%. The decision was a response to the economy’s slow .7% growth in the year’s first quarter. Much of this slowing growth can be attributed to the transition period following the presidential election, so the Fed remains optimistic for future economic growth. In that case, two more rate increases are expected by the end of the year. The next rate hike is expected to occur in June as long as the economy continues to grow, while many experts expect a second increase to occur in September. Overall, the decision seems to have had a very slight indirect effect on mortgage rates. As of Thursday, the average 30-year FRM was down about 1 basis point, hovering around 4.02%, while the average 15-year ARM and remained around 3.27%. And, though rates are always changing, many experts don’t expect them to increase dramatically between now until the end of the year. Many economists expect the 30-year FRM to fall between 4.2-4.5% at the end of 2017. For some, these rates might seem to be way too high.…Read more

  • How Paying Off A Mortgage Builds Wealth

    March 10, 2017 /
    Pickett Street Properties Team /

    Few homeowners are likely to say that they enjoy making monthly mortgage payments. Fulfilling an essential financial duty might be satisfying in the same way that cleaning one’s room or emptying the dishwasher is satisfying, but few people are likely to relish the act of paying off a mortgage. Which is strange, because most people enjoy receiving checks in the mail. While paying for a mortgage and receiving a paycheck aren’t quite the same, the comparison highlights an important feature of owning a home and having a mortgage: both are far better at building wealth than renting. The classic argument for this idea is that, while rent checks pay for a physical space that the renter will never own, a mortgage payment finances a piece of property that will one day be owned completely by the occupant. However, while this reasoning is perfectly sound, it also misses a key factor in a mortgage’s wealth-building power: mortgage payments contribute to building home equity, while rent payments do not. Let’s say, for example, that you’ve just bought a $250,000 house using a 30-year FRM. The beauty of this loan is that, no matter what the market does in the three decades following…Read more

  • How I Got The Gumption: The FHA 203K Loan

    March 3, 2017 /
    Pickett Street Properties Team /

    Sometimes, renovations can cause even the mildest mannered homeowner to panic. After all, home improvements can be costly and stressful. However, when Pickett Street’s very own Margaret Smith, Director of Operations, decided to purchase a vacant, bank owned fixer-upper, the FHA 203K Loan presented her with an opportunity that turned the process into a dream come true. Margaret bought her duplex in south Everett near Paine Field in August 2014. It was a bank owned property, meaning nobody had been living there for over a year. The previous owners had gone into foreclosure, so the home sat there vacant, lacking love and attention. The upstairs unit was a 3 bed, 1 bath layout that Margaret planned to rent out. It needed a new bathroom, new washer and dryer, a fresh coat of paint on the laundry room walls, and an all-around thorough scrubbing. The bottom unit was a 2 bed, 1 bath layout that was perfect for Margaret and a roommate. That 2 bed unit also needed a new bathroom, new kitchen and new vinyl wood flooring (which also needed to be leveled). The bottom half of the duplex’s exterior required a new paint job, and some general TLC. The…Read more

  • Five Tax Breaks for Homeowners

    February 10, 2017 /
    Pickett Street Properties Team /

    Now that it’s February, most of us have probably emerged from our flabbergasted holiday stupors and (with the help of a strong cup of coffee), finally achieved normalcy just in time for tax season. However, before you panic and begin overturning couch cushions to find the receipts you foolishly lost back in September, it’s useful to remember that plenty of helpful tax breaks exist for homeowners. Tax breaks for homeowners vary widely according to each person’s unique situation. Even so, it helps to be aware of the general options available for homeowners looking to save money during the tax season. Read on to learn more about how your home can help you save money when it comes time to file. Deductions for Mortgage Interest The interest American homeowners pay on a mortgage is tax deductible. For those who are married and filing jointly, it’s possible to deduct your interest payments for mortgages totaling as much as $1 million. Additionally, private mortgage insurance payments are deductible for those homeowners who took on a mortgage after 2006.  Overall, these tax breaks make a big difference when it comes to alleviating the financial burden of homeownership. In fact, in 2011 American homeowners benefited…Read more

  • No Need to Fear the Downpayment

    February 3, 2017 /
    Pickett Street Properties Team /

    New homeowners are liable to get nervous when it comes to applying for a mortgage. Many people have trouble sifting through the real estate terminology and the legal requirements of buying a home. However, if there was one aspect of buying a home that makes people the most nervous, it’s probably the downpayment. If making a downpayment is stressing you out, you should know there are many ways to obtain downpayment assistance, or even secure a mortgage without any downpayment at all. So, if you’re a buyer who wants to make a very low down payment or avoid one altogether and maintain maximum liquidity, check out some of the options outlined below. State Bond Loans In general, State Bond Loans help buyers secure a loan at below-market interest rates. The exact rates offered through State Bond Loans vary, but they generally increase long-term affordability and decrease monthly home payments. These bonds are available through local housing agencies, which sell tax-exempt mortgage revenue bonds and then use the income from these sales to offer below-market rate loans to buyers. This type of loan looks a little different depending on the state you’re living in. The Washington State Housing Finance Commission is the organization…Read more

  • Who’s Afraid of the FHA?

    January 12, 2017 /
    Pickett Street Properties Team /

    At the beginning of the week, the Federal Housing Administration announced it will decrease its annual mortgage insurance premiums by .25% annually or from .85% to .6% per year. This measure will go into effect for new mortgages closing or starting disbursement on or after January 27, 2017. This is the first reduction in insurance premiums since January 2015, when the FHA reduced premiums by 50 basis points. While this decrease might seem modest, experts estimate that it is likely to save consumers hundreds of dollars each year. For instance, with this reduction a homeowner with a $200,000, 30-year fixed rate mortgage can expect to  save about $500 annually. Looking at the larger picture, it’s expected that the reduction in insurance premiums will in total save $5 million for about 1 million borrowers. The announcement arrived on the heels of the FHA’s fourth straight year of economic health. In fact, since 2012 the FHA has reportedly increased its assets by over $40 billion. With such successful economic growth, the FHA has determined that offering lower prices to borrowers is fiscally responsible. The FHA’s decision further cements its importance for prospective homeowners. Since the Great Recession, FHA loans have been vital…Read more

  • Education = Power.

    December 2, 2016 /
    Pickett Street Properties Team /

      Mortgage Rates on the Rise as Equities Recover As expected, mortgage rates climbed during Thanksgiving week as equities recovered based on speculation of economic expansion. In fact, these market conditions led the Dow Jones Industrial Average to record highs. In general, with election season fading into the rearview mirror and with Trump beginning to assemble the foundations for his political team, it’s expected that markets will return to a sense of normalcy after their initial uncertainty. That’s not to say that we won’t see any more volatility; in fact, market experts expect that, even if things are settling down now, we should expect a few more market surprises in the foreseeable future. Any political concerns aside, it’s important to note that mortgage rates are increasing, just as this blog has predicted on numerous occasions. More specifically, just before Halloween, the average 30-year APOR was about 3.52%. By the end of the first week in November, that rate had recorded a modest increase and risen to 3.58%, while it rose again the following week to 3.61%. By the end of Thanksgiving week, the average 30-year APOR had increased to about 3.98%. Likewise, MarketWatch estimates that the average 30-year FRM has…Read more

  • Does Your Money Work for You?

    September 16, 2016 /
    Pickett Street Properties Team /

    Does Your Money Work For You? As this blog has mentioned in the past, buying a multi-family home is a profitable alternative to the standard, single-family rental unit. A multi-family home is an ideal vehicle for building wealth, as it provides extra income and more security than single-occupancy rental units. However, buying a multi-family home is easier said than done, and it can be hard to envision what the process is actually like without a concrete example. Fortunately, Pickett Street’s Amanda Weis provides us with a perfect concrete example. As Pickett Street’s Client Care Representative, Amanda has plenty of experience in property management, and she’s owned rental properties before. However, until recently, Amanda’s rental property was a single-family home that earned just $100 in profits each month. Upon selling the unit, Amanda used the profits from the sale (via the perpetually helpful 1031 exchange) to purchase a multi-family home. Or, more accurately, two multi-family homes. Starting her search in King and Snohomish counties, Amanda was initially frustrated by high property prices. However, once she moved her search to Tacoma in Pierce County, Amanda found two affordable duplexes requiring minimal up-front work. Since Tacoma’s rental market is booming, Amanda rented all…Read more

  • Do you want a discount from your Real Estate Agent?

    September 2, 2016 /
    Pickett Street Properties Team /

    What You Get When You Work With a Discount Agent Here’s a hint: it’s not much. While discounted brokers might seem attractive (who isn’t attracted to a lower price tag?), a lower cost does not often equal a better experience in the real estate world. Before jumping on the discount bandwagon, take a minute to read our reasons why traditional realtors are still the kings (and queens) of the real estate world. Traditional vs. Discount Before launching into a discussion about why the traditional model trumps discount upstarts, it’s important to understand the distinction between the two. A traditional broker is a tried and true real estate agent - he or she will charge a standard commission fee (often 6% of the sales price), but will not charge any other fees. Traditional brokers generally control all aspects of the real estate transaction, such as advertising your home, working with the MLS in your state, negotiating offers, helping you discover anything unique about certain properties, developing individualized marketing strategies to ensure that a homeowner’s property gets maximum market exposure, and finding properties for prospective buyers. A discounted broker, on the other hand, charges a lower commission, often around 3-5%, but sometimes even lower. Some…Read more

  • What are the Top Millennial Housing Trends?

    August 15, 2016 /
    Pickett Street Properties Team /

    Being a millennial, and being perpetually in the process of moving, I’ve been thinking about my generation’s real estate trends quite a lot recently. There’s an abundance of talk out there about what millennials (the generation aged about 18-35 and born between the early 1980s and early 2000s) want in a home, but it’s often hard to tell fact from fiction, and so millennial home buying trends tend to remain a bit of a mystery. To set matters straight, here are some of the most important trends millennials consider when buying a home. Uber Urban This one’s kind of a gimme. It’s pretty well known that millennials favor hip urban centers with ready access to bars, restaurants, services, and cultural centers. Rather than dreaming of making it to the suburbs like their parents, most millennials want to be where the action is. This trend is at least partly responsible for the boom in urban populations, and it has made cities such as Seattle, Portland, Denver, and Austin hot spots for the young. Along with this urban focus comes a fondness for an industrial style. Instead of looking for spic and span spaces, millennials are favoring styles that are tastefully messy.…Read more

  • Mortgage Rates are Low: Why Should You Care?

    August 2, 2016 /
    Pickett Street Properties Team /

    We’re only a little more than halfway into the year, and already the housing market is flexing its muscles with a strong showing from new home sales. The U.S. Department of Housing and Urban Development has announced that there were 592,000 new home sales in June, a figure which outpaces original expectations and estimations by tens of thousands of units. The number of new home sales has increased about 4% in the last month, while current new home sales are roughly 25% higher than they were in June 2015. More to the point, June 2016 saw the highest new home sales since 2008. All in all, demand for new housing remains strong, and the housing market is not only continuing its robust, post-recession recovery, but also continues to be a primary contributor to the U.S. economic recovery. The success of new home sales has relied in large part on currently low mortgage rates. For individuals and households with favorable credit history, the average 30-year, fixed rate mortgage is about 3.5%. Back in June 2015, the average 30-year rates were hovering around 4% (which, it’s worth mentioning, was an already low figure). With rates arriving at even lower levels, it’s no…Read more

  • Do you know what a 1031 Exchange is?

    June 10, 2016 /
    Pickett Street Properties Team /

    Two things in life are unavoidable: death and taxes. However, while avoiding your personal taxes altogether isn’t possible, there are ways of avoiding them in the world of real estate. Particularly handy is the 1031 exchange, a transaction that allows you to defer capital gains taxes in the sale of certain kinds of property. Overall, the 1031 exchange is a great way to build wealth but, in order to do so, it’s important to familiarize yourself with the transaction’s basic rules. 1031 Exchange: The Basics Before we start discussing the benefits of the 1031 exchange, it’s necessary to understand exactly what this transaction entails. In simplest terms, a 1031 exchange applies to transactions in which you sell and then buy properties of like kind within a specified window of time. The term “properties of like kind” might seem formidably ambiguous, but it basically refers to real estate that is NOT your personal residence. Therefore, you could swap a parcel of undeveloped land for wealth-producing commercial real estate, or you could exchange business property for business property. Many different combinations exist, but the bottom line is that a 1031 exchange deals with investment or business property, and your personal residence can’t…Read more