Posts on Mar 2018

Home Buying

Can You Really Buy the House You Want in a Tight Market? 

If you haven’t purchased a home in the last few years, you may be surprised to find that buying a house isn’t as easy as it used to be. Gone are the days of cautiously comparing your top 5 choices and engaging in a prolonged volley of offers and counter-offers. Demand is high, and supply is low. According to a recent Kiplinger report, existing-home sales were down 3.2% in January 2018. The national inventory of listed homes was down 9.5% overall, continuing a downward trend that spans almost 3 years. While these statistics may sound discouraging at first, a tight housing market can actually be a good thing if you’re a prospective homebuyer who knows how to play the game. 

Fortune favors the bold.

Whether you’re shopping for your first home or relocating to a new area, it’s important to know exactly what you want in a house. Bedrooms, bathrooms, lot size, neighborhoods, schools—these are the details that drive the search process. But once you find a house, you need to be ready to move. When asked about how quickly an interested buyer should be ready to make an offer, Justin Boyd, a realtor with Keller Williams responded, “In this market, buyers have to be prepared to make an offer immediately!” 

When it comes to making a winning offer, speed isn’t the only factor. The strength of your offer plays an important role as well. Drawing on his experience, Boyd shared a few additional tips that will help you submit a strong offer that stands out from the rest. If you’re serious about finding your next home, the following pointers could help you land your new home sooner rather than later: 

Pre-approval is key.

In a tight housing market, it’s not uncommon for a seller to receive multiple offers. Since anyone can make an offer and then look for financing, you can dramatically improve your chances of acceptance by being pre-approved by a mortgage lender. Highlighting the importance of being prepared, Boyd points out, “It is important to start with preapproval before looking so that when you walk into the house, you are ready to complete the offer and submit immediately.” When you’re pre-approved for financing, you give the seller confidence that your offer is solid.

Find out what the seller wants.

Every buyer has a list of what they’re looking for in a house, but few consider the fact that the seller has a list of their own. Some sellers are in a hurry, which makes a quick closing date important. Others have had previous contracts fall apart, so they’re in favor of shorter contingency periods. This is an area where it pays to have an experienced buyer’s agent on your side, one who can communicate with the seller’s agent to find out what really matters. Surprisingly, it’s not always money! Over the years, Boyd has seen the benefit of uncovering the one thing that’s most important to the seller. “Finding out what that one thing is could be the difference between getting the home or not. I have had sellers accept an offer for less money because it met more of their goals.” 

Go big to go home.

Everyone loves a bargain, but this may not be the time to hold out for one. While it may seem counterintuitive, Boyd suggests being prepared to offer full asking price—or more—on your first offer. “Sometimes you can make a great first impression and skip the multiple offers game with a great first offer! You don’t want to spend time fighting for a home you love only to find out that you didn’t win because the other offer beat you by $500.” Additionally, he suggests submitting an offer with as few add-ons as possible. Removing conditions like seller-paid home warranties and seller paying for buyer closing costs can be a game changer.

It’s time to get started.

If you’re already house hunting, you owe it to yourself to follow the advice listed above as quickly as possible. If you’re planning a home search in the future, preparing ahead of time is a great way to make the process as stress-free as possible. Either way, getting pre-approved is the first step, and Great Meadow FCU is the perfect place to start. A basic conversation about your housing goals and financial situation will help our loan specialists determine how much you can afford to pay for a house. Once those details are in place, they can help secure a pre-approval and position you to make the strongest offer possible when you find the home you want.

Click here to take the first step toward your new home.

 

Meal Delivery Services

Are Meal Delivery Services Really Worth the Money? 

With almost $5 billion in sales in 2017 alone, it’s safe to say meal delivery services are catching on. If you haven’t sampled the savory selections from companies like Blue Apron, Hello Fresh, or Home Chef already, you’ve probably seen more than a few of their sponsored ads pop up in your social media feeds. You may even know someone who uses the services for themselves. While these chef-designed, pre-packaged meals can be a phenomenal way to try new recipes, are they a solid choice for stretching your grocery budget? 

According to a recent Morning Consult poll, 59% of survey respondents listed high costs as their main concerns. But with projections suggesting the meal-delivery industry could become a multi-billion dollar market by 2022, it seems like plenty of consumers are still willing to jump on the meal delivery bandwagon. The widespread appeal appears to be based on a variety of factors other than monetary savings.

Costs can be measured in more than money.

Meal delivery services enjoy the highest popularity among millennials and individuals earning more than $100,000 a year, particularly those living in cities. These results point to the fact that busy people appear to value time savings and food quality as much as, if not more than, financial savings. 

Time Cost

There’s no denying that it takes time to plan your meals, create a grocery list, and actually shop for the food. By creating recipes and sending all the ingredients right to your door, companies like Blue Apron and Hello Fresh can save you the time you’d normally spend on planning and shopping. The busier you are, the more valuable this service becomes.

Quality of Ingredient

If saving money on your groceries is your main goal, it’s easy to reduce costs by buying low-quality food. Unfortunately, this strategy usually leaves you with an abundance of processed foods that lack nutrition and flavor. The most popular meal prep services rely on culinary chefs to design meals that combine high-quality ingredients to create a meal that’s healthy and delicious.

Financial Expense

With the most popular 2-person meal plans starting at $60 per week for 3 meal kits, the cost averages $10 per meal. While you can certainly spend less shopping for yourself, these options are considerably less expensive than the average meal at a restaurant. So, if your busy schedule leaves you dining out on a regular basis, meal delivery services may provide financial savings after all. 

What kind of savings do these services actually deliver?

There’s no denying the growing demand for meal delivery services like Purple Carrot, Green Chef, and Blue Apron. The fact that retail giants like Amazon and Walmart are scrambling to be part of the meal kit market only serves to confirm the rising popularity.   

As you try to decide whether one of these services is the right solution for you, the value depends on your expectations. If you’re looking to spend less than you would by planning your own meals and shopping for yourself, you’ll probably be disappointed. But if you view these services as a time-saving bridge between home-cooked meals and going out to eat at restaurants, the value is much easier to see.

 

Should You Be Using Your Home’s Equity? 

Should you be using your home's equity?

Should You Be Using Your Home’s Equity? 

Maybe you’ve heard of home equity loans and lines of credit, maybe you haven’t. There’s no need to hang your head if the terms are unfamiliar to you. It’s easy to get lost in all the terminology of the financial world. But when the discussion turns to home equity, it’s important to know more than just the lingo—especially if you’re a homeowner. Whether you just purchased your first house (congratulations!) or you’ve been in your home for decades, it pays to understand the power of your equity.

What is equity? (And why does your home have it?)

With details ranging from fixed rates and loan terms to property appreciation and market value, home equity can be a complex topic. For the sake of conversation, we’ll stick with the basic premise that your home’s equity is the difference between what your home is worth and how much you still owe on it. As your home’s value goes up over time and your monthly payments chip away at your mortgage balance, your equity increases.

It can be reassuring to know that if you ever choose to sell your home, that equity would come back to you as profit. The beauty of home equity loans and lines of credit is that they let you leverage that equity without requiring you to sell your home. If your house is currently worth $250,000 and you have a principal balance of $150,000, you’re sitting on $100,000 in equity. Those funds may be comforting in theory, but they can also be an effective tool for your financial future.

Does it make sense to use your home’s equity?

Since it represents debt you’ve already paid off, you may be wondering why you would ever tap into your home’s equity in the first place. That’s a fair consideration, and it’s always a good idea to discuss the decision with a trusted financial advisor before proceeding. However, there are a few key benefits that make home equity loans and HELOCs a solid financial solution:

· Because they’re considered secured debt, home equity loans traditionally offer lower interest rates than credit cards and other consumer loans.

· A fixed-rate loan lets you lock in a low rate for the duration of the loan, protecting you against market fluctuations.

· If you don’t need the money in one lump sum, a home equity line of credit provides as-needed access to the funds and only requires you to pay interest on the amount you borrow. 

After you secure a home equity loan or HELOC, you’re free to spend the money however you please, but some of the top uses for home equity funds include:

· Consolidating high-interest debt

· Medical bills

· Home improvements

· Emergency fund

· Education costs 

A word of caution 

It’s important to remember that using equity as a quick fix without considering the budgetary impact is a dangerous proposition. If you’re consolidating debt without changing poor spending habits or if you’re making home improvements that won’t add value to your house (e.g., swimming pool, landscaping, solar panels, etc.), you could be setting yourself up for a financial crisis. Since you’re using your home as collateral, it’s important to honestly assess your financial situation before rushing into a decision.

If you’re wondering whether a home equity loan or HELOC is right for you, contact your credit union today and schedule a consultation with one of our mortgage experts. If you’re not a credit union member yet, this is the perfect time to change that. Like finding the right home equity solution, joining a credit union offers benefits that can put you on the path to financial success.