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How-To Tuesday: Pay Your Mortgage Off Early

You don’t need us to tell you that buying a house is a big investment. When you finance a home with a traditional 30-year mortgage, you’re basically locking yourself into a certain payment every month for a huge chunk of your life. But did you know there are ways to pay off a mortgage earlier than that? Here are a few ways to work in a little extra money toward your loan and pay it off earlier than expected.

Pay a little extra each month.

Your mortgage payment is usually made up of principal, interest, taxes, and insurance. That amount will fluctuation from time to time depending on how much you have or need in escrow to pay insurance and tax bills. If you can throw a little extra money at the principal loan amount each month, you’ll garner equity faster and pay your loan off earlier than. Think about adding an extra one or two hundred dollars to your monthly payment. Before you do that, though, get in touch with your mortgage company to ask if there’s anything you need to do to make sure those extra dollars get applied to the principal. Some companies might require a notation on your check telling them where to apply the extra money.

Make an extra payment every year.

If you have a strict monthly budget and can’t apply extra money to each payment, try making one extra payment per year instead. If you can save 1/12 of the payment amount over the year, you’ll have an extra 13th payment ready to go when a year is up. If you know you get a bonus at a certain time of year, you can also plan on using some of that to make that extra yearly payment.

Refinance to a shorter-term mortgage.

If you’ve had your mortgage for a few years, think about refinancing to a 15-year mortgage. Say you’ve been paying your mortgage for five years. Refinancing to a 15-year mortgage means you’ll pay it off ten years earlier than you would have if you’d stuck with your 30-year mortgage. Even though shorter-term mortgages have slightly lower interest rates, refinancing to one will more than likely raise your payments, so make sure that won’t be too much a of a burden.

Apply unexpected funds toward your loan.

Did you come into some money unexpectedly? Maybe you got a great tax refund or a larger than normal Christmas bonus. Sure, you could use that money to go on a big vacation, or you could stick it in a savings account somewhere; but apply at least a portion of that money to your mortgage is an extremely wise move.

Paying off your mortgage early means paying fewer dollars in interest as the amount of the loan shrinks over the years. Just make sure you don’t overburden your budget by putting too much of your income toward your mortgage.

 

 

What Buyers Are Looking For Now

If you want to sell your home quickly and for top dollar, it’s important to know exactly what buyers are looking for right now. Luckily, we’ve done the work for you and put together a list of home features and amenities buyers are craving in 2018. According to market research, two groups make up the majority of homebuyers: millennials and baby boomers. These two groups are famously at odds in what they want in general, but surprisingly, they seem to agree on what they’re looking for when it comes to real estate.

A Separate Laundry Room

Buyers want the convenience of having a separate space to do laundry-related chores. Having a laundry room makes washing, folding, and ironing clothes an easier task when everything you need is right there at arm’s reach. We’re willing to bet the majority of people don’t put their clean laundry away immediately. It’s nice to have a separate room where you can close the door and keep it out of the sight of last-minute guests.

Exterior Lighting

Curb appeal is obviously a big factor in the first impression your home makes on buyers. But now they want more than just the curb appeal—they want to illuminate it. What’s the point of having a beautifully manicured lawn or the perfect shade of red on the front door if it can’t be seen all the time? Besides allowing people to see your home’s beauty in the dark, exterior lighting is also a great safety feature.

A Walkable Neighborhood

This is a feature that has become desirable for generations across the board. While you can’t change the location of your house, it’s important to know this. Many buyers want to live in an area where they can walk or bike to grocery stores, restaurants, and other shopping and amenities. If this isn’t something that’s possible in your area, you might have to find other ways to up the ante and make your home seem more desirable than others that have slightly better locations.

Energy Efficiency

As we learn more about how the way we live every day affects our planet, more and more people are interested in conservation and reducing their carbon footprint. Being eco-friendly has become important to the modern homebuyer. They’re looking for Energy Star appliances and windows and ways they can leave a positive impact, like space for gardening and composting.  

Patio or Other Outdoor Living Space

We’re lucky enough to live in a climate where outdoor entertaining is possible pretty much year round. Buyers in the Charleston market want a nice outdoor entertaining space, whether that’s a nice patio, a covered porch, or an expansive deck.

Wood Floors

Wood floors are simpler, cleaner, and more pleasing to the eye than much carpeting. They’re also easier to maintain and are more durable than carpet. Wall-to-wall carpeting tends to harbor allergens like dust, pollen, and pet hair, no matter how often you vacuum. Installing wood flooring may sound expensive, but there are options for every price point.

Garage Storage

As families grow and settle down in one spot, they end up accumulating a lot of stuff. Unlike attic or shed storage, garage storage is easily accessible, which is important when you need to store items that are used pretty often. Here in the Lowcountry, storage for outdoor items like beach chairs and boogie boards is a big plus. You need somewhere to keep them out of sight, but you also want to be able to access them quickly.

Ceiling Fans

Smart buyers know that ceiling fans help with cooling costs. They’re incredibly useful on those days when the house feels stuffy and needs cooling, but it’s not quite time to lower the thermostat. This is a small, inexpensive addition to any home.

 

Friday Five // March 23rd, 2018

It’s time again for the Friday Five, our weekly roundup of events happening around the Lowcountry throughout the weekend. Get out and have some fun! Take your four-legged friend out for brunch, see an outdoor movie, go see some basketball mixed with comedy, and more. Whatever you choose to do, the staff and agents at Johnson & Wilson Real Estate Company wish you a safe and happy weekend!

Head out to MUSC Health Stadium on Friday evening for Films on the Field. Bring the kids out for an Easter egg hunt and more fun activities, then spread out your blankets and chairs on the field for a viewing of Hop at 7pm. Who knows? Maybe the Easter Bunny himself will even show up!

If you’ve never experienced the fun and excitement of rooting for the Harlem Globetrotters, now’s your chance! Catch the exhibition basketball team at either 2pm or 7pm on Saturday, and delight in cheering on extremely talented basketball players who combine athletics with theater and comedy in a way that’s fun for all ages.

Sunday Funday has gone to the dogs! Bring your favorite pooch to Bay Street Biergarten on Sunday from 11am until 2pm for Puppies and Pints Brunch. Sip a mimosa and enjoy a delicious brunch while Fido plays with other four-legged friends. There will also be treats available for the pups!

Speaking of pets, they’re really going to love you for taking them to Palmetto Islands County Park on Sunday for Pet Fest. Pets of all shapes and sizes and the owners are invited to join in the fun from 11am until 5pm. There will be plenty of exhibits, demonstrations, experts, entertainment, and more. Try out the dog-washing station, enter your dog in a cover model contest, enjoy live music and children’s activities like jump castles, meet local rescue groups, and maybe even adopt a new friend.

Join Awaken Church and the Charleston community for a citywide Helicopter Easter Egg Drop. This event takes place on Sunday from 4-5pm and is for families of all ages. Over 20,000 eggs will be dropped for the children from a helicopter at West Ashley High School. There will also be a golden egg hunt and fun, age-appropriate prizes for all children.

Pros and Cons of an Open Floor Plan

Open floor plans have been extremely popular for a few years now. How many times have you turned on a home improvement show to see the hosts talking about knocking out a wall or two? According to the National Association of Home Builders, 84% of new single-family homes have fully or partially open layouts. Before you buy a home with an open floor plan, consider the following pros and cons to decide if it’s really for you.

Pro: More Usable Square Footage

Walls take up more space in a home than you realize and can make things feel claustrophobic in a smaller home. Knocking down walls or creating pass-throughs can help give the illusion of more space when things are cramped.

Pro: Freedom to Mingle with Guests

Home with open floor plans are perfect for entertaining. Your guests will have plenty of space to spread out and see who’s around. And instead of being stuck in the kitchen cooking or preparing drinks while your guests chatter away in the other room, you’ll be able to see them and join the conversation too.

Pro: More Flexibility

Without walls dictating where furnishings can and can’t go, you’ll have more freedom to arrange and decorate your space however your heart desires. It’s easier to change things up, too! Moving furniture around is a snap when you don’t have any doorways to cram your soft through.

Con: Less Privacy

The downside of having more open space is that, well, everything’s open to whoever walks in your front door. If your family is watching the big game on TV and you just want to curl up with a good book, you’ll have to retreat to a bedroom or other private space to get away.

Con: Inability to Hide Messes

You know that mad cleaning dash we all make when we get a five-minute warning that a friend or family is dropping by? It’s much harder to hide messes quickly when there’s no door to shut or wall to toss your kids’ toys behind temporarily. An open floor plan requires more vigilant organization if you want things to look neat and clean all the time. Be aware as well that if your kitchen is open to the rest of the living area, smells (and smoke from those burned biscuits...oops!) will travel.

Con: Trends Eventually Die Out

Even though open floor plans have been popular for a while now, it’s still a trend in home design, and trends eventually go out of style. Remember when everybody wanted a separate, formal dining room? That trend will come back around at some point too. If you go with an open floor plan, make sure it’ll be possible to section it off later on down the road. You never know: open layouts could be completely undesirable when it’s time to sell your house.

How-To Tuesday: Buy Your First Rental Property in Your Twenties

It’s never too early to start thinking about saving for retirement and your future. There are always traditional retirement funds and savings accounts, but did you know that investing in real estate can be a great way to save for the future? If you’re smart about it and have a great real estate agent to help you along the way, you can get a better return on investment than many other ventures. The best thing about getting started in real estate investing when you’re young is that you have more time to buy multiple investment properties over the years. Here’s how to go about buying your first rental property in your twenties.

Have a plan. As with most things in life, buying an investment property takes a certain amount of planning. It doesn’t have to be a meticulously detailed plan, just a loose outline. When do you want to purchase a house—in the next five years? The next eight months? Will you live in the house for a while before you rent it out, or will you rent it right away? What is your ultimate goal? Do you want a house that you’ll keep for years, or will you sell it once it appreciates in value? These are all important questions to address before you even think about looking for investment property.

Don’t wait until it’s time to “settle down.” Lots of young people wait until they’re married, in a long-term relationship, or having a baby to buy a home. A little hint: don’t combine buying a home—whether it’s residential or for investment purposes—with another major life milestone. Planning for a wedding or a baby can be stressful enough. You don’t want to put more on yourself than you can handle. Also, don’t think that you first home has to be

Clean up (or establish) your credit. Two common problems with younger generations is that they don’t have a good credit history, or they have no credit history. Consult your bank or a mortgage lender for advice on how to establish or repair credit in order to obtain a home loan.

Hire a real estate agent. Did you know that there aren’t any fees associated with hiring an real estate agent? Agents make a certain commission (usually about 6%, but that number can vary) based on the total sales price of a house. This commission is normally built into the closing costs. But you don’t have to wait until you’re absolutely ready to buy to consult a real estate agent. Johnson & Wilson agents are always willing to work with you from the early stages to get you ready to purchase a home. Professional, personalized advice is way better than anything you’ll find by searching online or reading books on investing.

Save, save, save. Unless you qualify for a 100% loan (e.g. if you qualify for a VA or FHA loan and the home will be your primary residence for a while before you turn it into a rental), you’re going to need to save up for a down payment. Not only will you need cash to close on an investment home, but you’ll also need to keep an emergency fund for things like repairs or covering the mortgage payment if/when the house isn’t occupied. One of the easiest ways to save is to set up weekly or monthly transfers that get automatically deposited into a high interest savings account. This is even easier if you have direct deposit. Simply have your employer deposit a certain amount from each paycheck into a separate account from the one the rest of your paycheck goes into.

Do some preliminary research. Don’t start your home search until you know exactly what you’re looking for. As a younger person, you have the advantage of knowing where people around your age really want to live. Make a list of the most desirable areas in your city, followed by the best neighborhoods, the types of amenities people want, and how many bedrooms and bathrooms renters in your area typically need.

Don’t use television as a measure for success. Most TV shows that feature home buying and selling, flipping, and renovation are the exception to the norm. There are a lot of factors behind the scenes that you don’t get to see that guarantee the success of those projects.

Start your search. When it’s time to start actively searching for an investment property to buy, it’s important to be logical. Don’t go with a “gut feeling” or get too personal. Remember, unless you’re going to live in the house initially, it’s not going to be your “home.” Keep to your plan, consult your research, and listen to your Realtor. They know what’s up.

Buy less than you can afford. The last thing you want is to be stuck with a mortgage payment you can’t cover if the house is unoccupied for a month or two. Figure out what you’ll be able to cover from month to month and go from there. Don’t forget that monthly payment includes the principal mortgage payment plus interest, taxes, insurance, and perhaps an HOA or regime fee. Don’t go too low on the totem pole, though. That brings with it a whole other set of issues.

Find a good property manager. Of course you can take care of leasing, maintenance, and other issues yourself, but it’s so much easier to hire a reputable property management company to help out. They’ll take care of marketing, leasing, maintenance, and in unfortunate cases eviction and other legal actions, all for a reasonable fee. Ten percent of the monthly rent is a pretty common amount to pay a property manager. If they charge 10% and you charge $1,000 a month for rent, you can expect a check for $900 each month (minus any incidental expenses like repairs) after your property manager takes their cut. It’s a small price to pay for peace of mind and less work on your plate.

Once you’ve bought your first rental property, you’ll want to keep an eye on the market. Even if things are going smoothly, you don’t want to be caught by surprise. Keep in touch with your real estate agent to make sure values in the neighborhood are still increasing, or at least holding steady. If you keep up a good relationship with your agent, they’ll keep an eye out and let you know the perfect time to cash in on your investment by selling.

 

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