From the September 2020 issue of @Home with Coldwell Banker Tomlinson. Article written by Cindy Hedin, Coldwell Banker Tomlinson REALTOR®.
With fall just around the corner, we at Coldwell Banker Tomlinson are beginning to gear up for our annual Coats 4 Kids campaign with KXLY 4 News Now. Though, due to the current COVID pandemic and school closures, the Coats 4 Kids campaign will look a little different in 2020, its success is more urgent than ever!
Coats 4 Kids is an area-wide annual fall event and has several local sponsors, including Coldwell Banker Tomlinson. In addition to its corporate contributions, Coldwell Banker Tomlinson Realtors® throughout our region have worked in the past as liasons with local schools and businesses in collecting coats. We will miss working directly with our school partners this year. However, we know they will continue to do what they can to help. View a full list of coat dropoff locations here.
The good news is that we will still be receiving new and gently used coats and monetary donations at Coldwell Banker Tomlinson offices throughout the Spokane area. Dr. Bob Lutz from the Spokane Health District was consulted to ensure we are observing proper procedures regarding COVID-19. Unfortunately we have had to eliminate some of the events we've done in the past.
This year marks the 35th anniversary of Coats 4 Kids. With your support, we have been able to collect hundreds of thousands of new and gently-used coats of all sizes (don't forget the teenagers!) for children throughout our region. This year's collection will begin October 1st and run through October 31st. We want to make sure every child in our area has a warm coat to wear this winter!
What can YOU do to help in this year's campaign?
1. Check your closets any gently used coats you would like to donate.
2. Bring them to any Coldwell Banker Tomlinson office, or call your Coldwell Banker Tomlinson Realtor®, we will be happy to pick up your donation.
3. Donations of new coats and monetary donations are also most welcome. Make a financial contribution here.
Your contributions will put smiles on many, many children in our community!
After buying a home, you may feel as if you've completed a marathon and are due for a little downtime to settle in and rest. But don't sit too long; there's still plenty to do.
We recommend prioritizing the many must-dos that will ensure your safety and comfort in your new Spokane home. Here are five things to get started on.
In July, the average 30-year fixed-rate mortgage fell below 3% for the first time in history.1 And while many have rushed to take advantage of this unprecedented opportunity, others question the hype. Are today's rates truly a bargain?
While average mortgage rates have drifted between 4% and 5% in recent years, they haven't always been so low. Freddie Mac began tracking 30-year mortgage rates in 1971. At that time, the national average was 7.31%.2 As the rate of inflation started to rise in the mid-1970s, mortgage rates surged. It's hard to imagine now, but the average U.S. mortgage rate reached a high of 18.63% in 1981.3
Fortunately for home buyers, inflation normalized by October 1982, which sent mortgage rates on a downward trajectory that would bring them as low as 3.31% in 2012.3 Since 2012, 30-year fixed rates have risen modestly, with the daily average climbing as high as 4.94% in 2018.4
So what's causing today's rates to sink to unprecedented lows? Economic uncertainty.
Mortgage rates generally follow bond yields, because the majority of U.S. mortgages are packaged together and sold as bonds. As the coronavirus pandemic continues to dampen the economy and inject volatility into the stock market, a growing number of investors are shifting their money into low-risk bonds. Increased demand has driven bond yields—and mortgage rates—down.5
However, according to National Association of Realtors Chief Economist Lawrence Yun, "the number one driver of low mortgage rates is the accommodating Federal Reserve stance to keep interest rates low and to buy up mortgage-backed securities." According to Yun, "we will see mortgage rates stay near this level for the next 18 months because of the significance of the Fed's stance."6
How do low mortgage rates benefit current homeowners?
Low mortgage rates increase buyer demand, which is good news for sellers. But what if you don't have any plans to sell your home? Can current homeowners benefit from falling mortgage rates? Yes, they can!
A growing number of homeowners are capitalizing on today's rock-bottom rates by refinancing their existing mortgages. In fact, refinance applications have surged over the past few months—and for a good reason.7 Reduced interest rates can save homeowners a bundle on both monthly payments and total payments over the lifetime of a mortgage.
The chart below illustrates the potential savings when you decrease your mortgage rate by just one percentage point. When it comes to refinancing, the bigger the spread, the greater the savings.
Estimated Monthly Payment On a 30-Year Fixed-Rate Mortgage
Be sure to factor in any prepayment penalties on your current mortgage and closing costs for your new mortgage. For a refinance, expect to pay between 2% to 5% of your loan amount.8 You can divide your closing costs by your monthly savings to find out how long it will take to recoup your investment, or use an online refinance calculator. For a more precise calculation of your potential savings, we'd be happy to connect you with a mortgage professional in our network who can help you decide if refinancing is a good option for you.
How do low mortgage rates benefit home buyers?
We've already shown how low rates can save you money on your mortgage payments. But they can also give a boost to your budget by increasing your purchasing power. For example, imagine you have a budget of $1,500 to put toward your monthly mortgage payment. If you take out a 30-year mortgage at 5.0%, you can afford a loan of $279,000.
Now let's assume the mortgage rate falls to 4.0%. At that rate, you can afford to borrow $314,000 while still keeping the same $1,500 monthly payment. That's a budget increase of $35,000!
If the rate falls even further to 3.0%, you can afford to borrow $355,000 and still pay the same $1,500 each month. That's $76,000 over your original budget! All because the interest rate fell by two percentage points. If you've been priced out of the market before, today's low rates may put you in a better position to afford your dream home.
On the other hand, rising mortgages rates will erode your purchasing power. Wait to buy, and you may have to settle for a smaller home in a less-desirable neighborhood. So if you're planning to move, don't miss out on the phenomenal discount you can get with today's historically-low rates.
How low could mortgage rates go?
No one can say with certainty how low mortgage rates will fall or when they will rise again. A lot will depend on the trajectory of the pandemic and subsequent economic impact.
Forecasters at Freddie Mac and the Mortgage Bankers Association predict 30-year mortgage rates will average 3.2% and 3.5% respectively in 2021.9,10 However, economists at Fannie Mae expect them to dip even lower to an average of 2.8% next year.11
Still, many experts agree that those who wait to take advantage of these unprecedented rates could miss out on the deal of a lifetime. It's hard to imagine that rates may drop even lower. Positive news about a vaccine or a faster-than-expected economic recovery could send rates back up to pre-pandemic levels.
How can I secure the best available mortgage rate?
While the average 30-year mortgage rate is hovering around 3%, you can do a quick search online and find advertised rates that are even lower. But these ultra-low mortgages are typically reserved for only prime borrowers. So what steps can you take to secure the lowest possible rate?
1. Consider a 15-Year Mortgage Term
Lock in a low rate by opting for a 15-year mortgage. If you can afford the higher monthly payment, a shorter mortgage term can save you a bundle in interest, and you'll pay off your home in half the time.12
2. Give Your Credit Score a Boost
The economic downturn has made lenders more cautious. These days, you'll probably need a credit score of at least 740 to secure their lowest rates.13 While there's no fast fix for bad credit, you can take steps to help your score before you apply for a loan:14
● Dispute inaccuracies on your credit report.
● Pay your bills on time, and catch up on any missed payments.
● Hold off on applying for new credit.
● Pay off debt, and keep balances low on your credit cards.
● Don't close unused credit cards (unless they're charging you an annual fee).
3. Make a Large Down Payment
The more equity you have in a home, the less likely you are to default on your mortgage. That's why lenders offer better rates to borrowers who make a sizable down payment. Plus, if you put down at least 20%, you can avoid paying for private mortgage insurance.
4. Pay for Points
Discount points are fees paid to the mortgage company in exchange for a lower interest rate. At a cost of 1% of the loan amount, they aren't cheap. But the investment can pay off over the long-term in interest savings.
5. Shop Around
Rates, terms, and fees can vary widely amongst mortgage providers, so do your homework. Contact several lenders to find out which one is willing to offer you the best overall deal. But be sure to complete the process within 45 days—or else the credit inquiries by multiple mortgage companies could have a negative impact on your credit score.16
Ready to take advantage of the lowest mortgage rates in history?
Mortgage rates have never been this low. Don't miss out on your chance to lock in a great rate on a new home or refinance your existing mortgage. Either way, we can help.
We'd be happy to connect you with the most trusted mortgage professionals in our network. And if you're ready to start shopping for a new home, we'd love to assist you with your search—all at no cost to you! Contact us today to schedule a free consultation.
This article is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.
It's hard to believe summer is almost over, but there will be a nip in the air before you know it! As summer turns into autumn, we all look forward to the stunning fall foliage that Washington is known for. This is one of the reasons why we love showing homes in the autumn months.
When we speak with potential buyers who are new to the area, we always recommend that they take a short break from exploring Spokane homes for sale to visit some of the area's most scenic spots. Here are a few of our favorite recommendations.
Are you looking for the perfect home in the Spokane area? We're here to help you find one your sure to fall in love with! Get in touch today to get started.
View our comprehensive Spokane real estate market report for the month of August!
The information in this report is compiled from a report given by the Spokane Association of REALTORS© and to the best of our knowledge is accurate and correct.
Want more info about the current real estate market? Contact us today to speak to an agent.
Buying a house that needs renovations can be a great way to find a deal, but before you decide to pounce on that tempting offering price, ask yourself these questions:
Can your budget accommodate renovations and unexpected costs?
Naturally, the draw of a fixer-upper is that you can purchase it for a much lower price than
a similarly sized and located move-in ready home. The trick is deciphering exactly how much work the home needs, how much it will cost, and whether the combined renovation/purchase cost of the home will ultimately be more affordable than buying a house that's ready right now. When you're done, add 15% for the unexpected.
How much of the work can you handle yourself?
One way to keep renovation costs down when buying a house is to handle as much of the work as possible yourself, but it's important to be realistic about what projects truly qualify as DIY. If you have experience in the contracting trades or have renovated a home in the past, then you may be able to tackle some of the more costly aspects of renovating. Most people will need to leave the bigger, more costly aspects of renovating to the pros.
How soon do you need to move in, and do you have a place to stay?
If you have a place to stay and don't need to move into your new home right away, then time may not be a major issue. If you need to move in ASAP, then a fixer-upper probably isn't the right choice when buying a house.
Do you have trusted service providers?
No matter how much or how little of the work you can handle DIY, you'll likely still need contractors, an architect, and other service providers to tackle key tasks. It helps to have people you know and trust – or referrals from trusted sources – when coordinating work on a fixer-upper. Having quality service providers helps keep added costs down, and makes it easier to keep the project on schedule.
Do you have a vision for the home you'd like to create?
Success with a fixer-upper depends in large part on having a plan and being able to see it through to completion. So it's essential to have a vision of the home that you want to create. If you don't, then buying a move-in ready house may provide more value for your investment.
From the August 2020 issue of @Home with Coldwell Banker Tomlinson. Based on original reporting.
It seems that we find ourselves in a time of great decisions. Should schools and businesses be open or closed? Should the Congress inject more money into the economy, and if so, how much? Soon we will be asked to decide whether to stick with our current president, or go with another.
These are great decisions, and different people will find different answers, but their importance requires that we all be involved, that we study the issues before deciding, and then be sure to make our decisions known, either to our elected leaders or via the ballot box.
There is another great issue that we encounter every day and that is calling for a decision that has for too long been either delayed or confused: How do we in Eastern Washington want our transportation system to be managed? It is the job of Mike Gribner, Region Administrator of the Washington State Dept. of Transportation (WSDOT) to do just that, provided we understand that he acts on instructions from us.
Mike has been waiting for clear, consistent instructions from us for years, and both he and his boss, Roger Millar, our state's Secretary of Transportation, are doing all they can to let us know that years of dithering have led our transportation system to a point of crisis, a crisis just as real as that caused by the novel coronavirus.
Good news is, though, it is much easier to solve. All it will take is for an informed electorate (us) to get our priorities straight, to decide just where we want to spend our money, and let our elected officials know about it.
At stake in Spokane is an economy that generates $30,000,000,000 (that's right; with a "B!") every year, and every single component is inexorably tied to transportation. It is what allows goods to get to market, buyers to get to sellers, patients to get to doctors... etc. When Mike Gribner has cause to worry, we all have cause to worry.
He is worried, because, on the one hand, we expect him to be a good steward of the complex and vital system of transportation we own, while, on the other, we deny him the funds to do so. Sometimes we do so intentionally, as when Initiative 976 was passed, which dangled the appealing prospect of lower license tabs at the cost of crippling reductions in WSDOT's revenues. Sometimes, we do it inadvertently, as when we run after the shiny new object of expansion, without first making sure that maintenance of the existing system is properly funded.
The clearest example in our region is the North Spokane Corridor (NSC). A worthy project, no doubt, but one that is funded by bonded (i.e. "borrowed") money, so much money that the interest payments alone consume a huge percentage of WSDOT's budget.
As a result, Gribner has been obliged to cease all repairs on thoroughfares with speed limits under 45mph. That lets out not only our tree-lined residential cul-de-sacs, but such little-used byways as Division Street and Trent Ave!
To be sure, the coronavirus has played its part by ratcheting up the severity of the crisis in our transportation system. The drastic reduction in miles traveled has meant far less consumption of gasoline, which in turn cuts deeply into the gas tax revenues on which WSDOT depends. The Office of Financial Management estimates the cost of the COVID virus at up to $100,000,000 per month.
He grimaces when he is accused by members of the real estate industry of being "anti-growth" for taking such action as opposing large-scale development along the I-195 corridor before steps are taken to improve its safety, steps which the City of Spokane (i.e. "we") agreed to take more than a decade ago.
In fact, the furtherance of economic prosperity is a prominent part of WSDOT's mission statement. Just ask Councilman Al French whether or not Mike Gribner can be relied upon to support our efforts at economic growth. He seems to feel that without the heroic effort of Gribner and his partners, Amazon would not have come to the West Plains.
So what is to be done? According to Mike Gribner, our first job as responsible citizens is to be well-informed. The WSDOT website is a great place to start. Beyond that, a call to the regional office at (509) 324-6000 will be enough to convince anyone that this is an organization devoted to serving the public and fulfilling its mission to support the safety, security, and prosperity of the people of Eastern Washington.
The final step, and the one that counts most, is putting your knowledge to work by voting responsibly and insisting to such elected representatives as Senator Andy Billig and Representative Marcus Riccelli, both ardent advocates for supporting our transportation system properly, that the system is important to you, and that you are willing to pay for it.