A very rare and much wanted freestanding (no common walls) El Dorado model with
an oversized two car garage with room for workshop in Leisure Village (55+)
community. This home has newly replaced carpet, appliances, lighting, many
fixtures and has been freshly painted. Other features are an enclosed patio as
well as open patio and a fireplace in the den.
Click the link below to see the YouTube video:
It’s another after-effect of the rise in housing prices: piggyback loans in Leisure Village are making a comeback. According to a recent American Bankers Associations Report, the number of piggyback loans originated across the nation more than doubled within the past year.
A piggyback loan involves taking out two mortgages simultaneously, with a home equity loan (aka “second mortgage”) ‘piggybacking’ on a first mortgage. In Leisure Village home purchases, piggyback loans typically come into play when the buyer is unable to provide a full 20% deposit. Normally this would necessitate the buyer having to take out private mortgage insurance (PMI), which can be pricey. By going with the piggyback loan alternative, the Loan to Value (LTV) ratio can be reduced to less than 80%, the threshold below which PMI requirements vanish.
A standard piggy back loan is structured as a “80-10-10”—meaning that 80% of the purchase price comes from the first mortgage, the next 10% from the second loan, and the final 10%, the deposit.
One major downside to piggybacking is cost. The interest rates charged on piggyback loans are significantly higher than those for first mortgages, so it may prove less expensive to pay for PMI for a short period of time. This is more likely in a rising market, since the Loan to Value can shrink below 80% before long. Another problem can crop up when it comes time to refinance. In order to refinance, the second mortgage lender has to agree to remain in a subordinate position. This agreement (known as re-subordination) may, in some cases, be hard to reach. Lastly, homeowners with a piggyback loan are unlikely to be able to take out a third loan should they want to access their home equity. Nowadays, thirds are rarely granted.
Between 2000 and 2006, it made a lot of sense to take out a piggyback loan. The interest on piggyback loans was tax-deductible, while mortgage insurance premiums were not. When property prices were rising as sharply as they were between 2000 and 2006, lenders also considered piggyback loans a good bet because the growth provided ample equity ‘cushion.’ But when real estate prices dropped in 2007, piggyback loans fell out of favor. By 2010, the percentage of piggyback loans fell to just 1.7%.
Today, with house prices on the rise, lenders are again growing more comfortable granting local piggyback loans—but with a bit more caution. Lenders usually ask for a FICO score of at least 700 and a debt-to-income ratio that’s below 43%. Increasingly, they want to see that a borrower has cash reserves in case of unforeseen circumstances.
If you are considering a piggyback loan in Leisure Village this spring, you will want to run the numbers to see if it’s the solution that makes the most sense. In some circumstances, it can be the best way to get into a home you can afford even though you can’t furnish a full 20% deposit. Call me today to discuss how today’s market meshes with your needs!
Adopt a Staging Mindset for Your Own Leisure Village Home Sale
With spring already upon us, we stand at the threshold of Leisure Village’s first major selling season of 2014. If you are preparing to add your own property to the Leisure Village home listings, the International Association of Home Staging Professionals would like to draw your attention to some statistics that bolster their members’ proposition. None is more compelling than this one: non-staged homes remain 79 days longer on market than their professionally-staged neighbors.
Still, since not everyone hires a professional staging company to work their magic, you’d think there would be a few DIY alternatives that would well worth doing. Of course, there are: and some go beyond the most well-known staging rules that are basic to any home sale:
1. De-clutter (then de-clutter again). The stagers’ single most important line item remains this: de-clutter. There is little cost to de-cluttering a home (usually no more than a storage unit’s rental). The professional insight is that once you have done it, go back through the house and do it again! That second round might only involve boxing up a few remaining personal knick-knacks, but it can also suddenly reveal items that clash with a room’s overall color palette.
2. Light(en) it up: Neutral colors are the rule for staging a home, but good light can be equally important. Make sure every room is well-lit, with clean windows, bright light bulbs (some do dim over time), and plenty of lamps or fixtures. If possible, disperse the height of lighting sources by mixing floor and table lamps, windows and overhead fixtures.
3. Find the focal points: The largest item in the room does not always have to be the focal item. If you have an antique chest or a captivating painting, see if you can arrange the room so that it’s the first thing your eye picks up as you enter the room. A strong focal point gives a sense of character to a room. It works to your advantage, since the focal point naturally emphasizes the strongest feature of the room.
These are approaches that do take some time and effort—but imaginative staging really does make an impact on perceived value, and, as a result, time-on-market. For more Leisure Village home selling insights, give me a call anytime to discuss your own real estate plans!
FOUND
An all black Portuguese Water dog was found wandering in Village 20. His rabies tag is from Montana. He is very friendly. A Pet Club member has him for now. Security has been notified, please contact Security with any information.
A popular Valencia (second largest) model in Leisure Village (55+) community.
This home has two large bedrooms, two baths, a breakfast area, breakfast bar,
formal dining and formal living room. The master has a large walk-in closet,
dual sinks, one in vanity area one in the bath. Leisure Village residents can
enjoy par 18 hole -par 3 golf, bocci ball, tennis, pool, spa, wood shop,
library, ceramics shop, lapidary shop, billiards, lawn chess, horseshoes,
shuffleboard and a club for just about any interest.
$445,000