20 ZIP Codes With the Highest Real Estate Returns

Although it's a small number, ZIP codes play a large role in the real estate game — especially when it comes to profit.

Your ZIP code is a pretty important piece of an address, especially when it comes to the real estate market. HomeUnion, an online real estate investment management firm, identified zip codes in 20 metros that maximize real estate returns while minimizing risk over a five-year horizon. They examined school quality and neighborhood attractiveness for single-family rentals over five years.

“HomeUnion Research Services looked at more than a dozen attributes that characterize a neighborhood including crime, schools, white-collar jobs, unemployment, homeownership, permitting activity, etc.,” said Steve Hovland, director of research for HomeUnion. “Based on those attributes, we forecast appreciation, vacancy and rent changes over the next five years.”

The study calculated Annualized Total Return, which includes HomeUnion’s projections for how much the value of single-family rentals will appreciate and how much cash flow they’re expected to generate. According to Hovland, HomeUnion’s model can determine the price and rent for every single-family home within a specific zip code and allow them to predict the price and rent in five years.

The Long Haul 

Americans are increasingly investing in real estate to reap the rewards, which makes investing in the right ZIP code crucial. To mitigate risk and earn the highest real estate returns, investors should focus assets that can maintain value even during downturns, Hovland said.

Remember, when it comes to real estate, ZIP codes aren’t the only numbers that matter. Without a good credit score, financing a real estate investment can be difficult and costly. See where you stand and check your credit score for free at Credit.com. Here are the top ZIP codes with the highest real estate returns.

20. 46280

Submarket: North Indianapolis

Metro Area: Indianapolis

Annualized Total Return: 5.4%

19. 91602

Submarket: North Hollywood, California

Metro Area: Los Angeles

Annualized Total Return: 5.4%

18. 73003

Submarket: Edmond, Oklahoma

Metro Area: Oklahoma City

Annualized Total Return: 5.4%

17. 63043

Submarket: Maryland Heights, Missouri

Metro Area: St. Louis

Annualized Total Return: 5.5%

16. 85259

Submarket:  North Scottsdale, Arizona

Metro Area: Phoenix

Annualized Total Return: 5.5%

15. 77059

Submarket: Clear Lake City, Texas

Metro Area: Houston

Annualized Total Return: 5.6%

14. 75022

Submarket:  Flower Mound, Texas

Metro Area: Dallas

Annualized Total Return: 5.6%

13. 44023

Submarket:  Chagrin Falls, Ohio

Metro Area: Cleaveland

Annualized Total Return: 5.6%

12. 34677

Submarket: Oldsmar, Florida

Metro Area: Tampa

Annualized Total Return: 5.7%

11. 97224

Submarket: King City, Oregon

Metro Area: Portland, Oregon

Annualized Total Return: 5.8%

10. 30078

Submarket: Snellville, Georgia

Metro Area: Atlanta

Annualized Total Return: 5.8%

9. 45255

Submarket:  Forestville/Cherry Grove, Ohio

Metro Area: Cincinnati

Annualized Total Return: 5.9%

8. 60016

Submarket: Des Plaines, Illinois

Metro Area: Chicago

Annualized Total Return: 6%

7. 66223

Submarket: Overland Park, Kansas

Metro Area: Kansas City

Annualized Total Return: 6.2%

6. 37062

Submarket: Fairview, Tennessee

Metro Area: Nashville

Annualized Total Return: 6.5%

5. 33327

Submarket: Weston, Florida

Metro Area:  Fort Lauderdale, Florida

Annualized Total Return: 6.6%

4. 33158

Submarket: Palmetto Bay, Florida

Metro Area: Miami

Annualized Total Return: 6.8%

3. 48322

Submarket: West Bloomfield Township, Michigan

Metro Area: Detroit

Annualized Total Return: 6.9%

2. 19035

Submarket: Gladwyne, Pennsylvania

Metro Area: Philadelphia

Annualized Total Return: 6.9%

1. 33434

Submarket: Hamptons at Boca Raton, Florida

Metro Area: West Palm Beach

Annualized Total Return: 8.1%

Image: irina88w

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25 Places to Buy a Vacation Home on a Budget

A summer vacation home might just fit into your budget if you choose the right location.

If you’re dreaming of a vacation home but also have a budget to manage, there’s some great news for you. Throughout the U.S., there are plenty of places where a vacation home can be accessible and budget friendly. If you can afford it, these locations are definitely worth looking into for a summer vacation home. Remember, when buying any house your credit plays a huge role. Check your credit score for free on Credit.com.

Daren Blomquist, senior vice president of ATTOM Data Solutions, leading provider for real estate data, calculated the best places to buy a vacation home for 2017. Variables include median sales prices, crime, five-year home appreciation, average summer temperature and the percentage of good air quality days. Here are some of the best and most affordable areas to buy summer vacation homes.

Best Places to Buy a Summer Vacation Home

25. Venice, Florida

YTD 2017 Median Sale Prices: $225,000

5-Year Home Appreciation: 67%

24. Sun City Center, Florida

YTD 2017 Median Sale Prices: $154,000

5-Year Home Appreciation: 86%

23. Santa Rosa Beach, Florida

YTD 2017 Median Sale Prices: $450,000

5-Year Home Appreciation: 76%

22. Kissimmee, Florida

YTD 2017 Median Sale Prices: $174,000

5-Year Home Appreciation: 87%

21. North Fort Myers, Florida

YTD 2017 Median Sale Prices: $180,000

5-Year Home Appreciation: 93%

20. Sun City, Arizona

YTD 2017 Median Sale Prices: $151,425

5-Year Home Appreciation: 81%

19. Palm Coast, Florida

YTD 2017 Median Sale Prices: $178,000

5-Year Home Appreciation: 59%

18. Lake Placid, Florida

YTD 2017 Median Sale Prices: $125,000

5-Year Home Appreciation: 56%

17. Jackson, Georgia

YTD 2017 Median Sale Prices: $120,000

5-Year Home Appreciation: 56%

16. Green Valley, Arizona

YTD 2017 Median Sale Prices: $149,900

5-Year Home Appreciation: 20%

15. Medford, Oregon

YTD 2017 Median Sale Prices: $238,450

5-Year Home Appreciation: 62%

14. Berlin, Maryland

YTD 2017 Median Sale Prices: $206,600

5-Year Home Appreciation: 9%

13. North Port, Florida

YTD 2017 Median Sale Prices: $175,000

5-Year Home Appreciation: 90%

12. Fort Pierce, Florida

YTD 2017 Median Sale Prices: $144,000

5-Year Home Appreciation: 100%

11. Satellite Beach, Florida

YTD 2017 Median Sale Prices: $253,000

5-Year Home Appreciation: 49%

10. Cape Coral, Florida

YTD 2017 Median Sale Prices: $205,000

5-Year Home Appreciation: 82%

9. Beverly Hills, Florida

YTD 2017 Median Sale Prices: $80,900

5-Year Home Appreciation: 50%

8. Ocean City, Maryland

YTD 2017 Median Sale Prices: $230,000

5-Year Home Appreciation: 0%

7. Delray Beach, Florida

YTD 2017 Median Sale Prices: $175,000

5-Year Home Appreciation: 123%

6. Deerfield Beach, Florida

YTD 2017 Median Sale Prices: $140,000

5-Year Home Appreciation: 109%

5. Weaverville, North Carolina

YTD 2017 Median Sale Prices: $265,000

5-Year Home Appreciation: 33%

4. Asheville, North Carolina

YTD 2017 Median Sale Prices: $259,500

5-Year Home Appreciation: 40%

3. Port Charlotte, Florida

YTD 2017 Median Sale Prices: $150,500

5-Year Home Appreciation: 115%

2. Waynesville, North Carolina

YTD 2017 Median Sale Prices: $195,000

5-Year Home Appreciation: 30%

1. Crossville, Tennessee

YTD 2017 Median Sale Prices: $87,500

5-Year Home Appreciation: 34%

Image: stellalevi

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5 Reasons to Call a Real Estate Agent Before Your Vacation

Top real estate agents, as local experts, can show you a place the way only long-time residents can see it.

You might be surprised to hear this, but if you want to maximize the benefits of a vacation and minimize your costs, you ought to give a top real estate agent in the area a quick call.

Top real estate agents, as local experts, can show you a place the way only longtime residents can see it. They make insightful tour guides because they spend every waking moment trying to convince people to move into the neighborhood.

Not only that, but if you end up loving your trip so much you want to live there forever, it doesn’t hurt to have a contact on the inside. Good agents can help you crunch the numbers and figure out whether it’s financially viable to own a vacation house in your lovable getaway place. (Here’s how to calculate how much house you can really afford.)

Ask any agent who knows what they’re doing and they’ll talk your ear off about how they can help you on your travels, but we thought to boil it down to the five ways they can save you money in the long run.

1. They Can Be Your 15-Minute Tour Guide (Just Ask Politely)

If you’re vacationing, chances are the hip urban vibe or tranquil oceanscape will spark a sense of wanderlust. The problem is that there are too many special boards out there advertising “$15 Cruise on The Bay!” at Fisherman’s Wharf or “Scenic Waterfall Hike!” on the big island of Hawaii. Who goes to a place just to see the same stuff they get at home?

No one knows the local landscape better than a good real estate agent. They have to — without extensive knowledge of local schools, eats and local things to see and do, they would have nothing to show potential buyers.

For example, real estate agent Dan Ihara, who happens to be in the top 1% of sellers in Hawaii, knows the waves in Honolulu unlike anyone else.

He knows most of the people buying homes in Honolulu are headed there for the surf culture. And he’s got the inside scoop on great surf spots you’ll never find in a guidebook.

Any real estate agent will be happy to spend 15 minutes chatting with you, especially if there’s potential for you to become a client later on.

Here’s how to use that short introductory call to your advantage:

1. Get “what it’s like to live there” recommendations for local sights, eats and things to do to get a feel for what the city is all about. These places are guaranteed to be cheaper — and better quality — than tourist sites that attempt to squeeze as much money out of you as possible.

2. Get recommendations for areas in your price range.

3. Make plans to see the highest performing rental areas.

The best part about using an agent as a tour guide is that you’ll build a positive relationship if you decide to buy a property in that location down the road.

2. They’ll Be Straight With You

Owning a vacation home cuts the cost of lodging and food when you travel, as you’ll have a full kitchen to store and prep meals. Plus, in some markets, you can make enough renting out the home when you don’t use it to cover the cost of the second mortgage.

On the other hand, you should be careful when you consider buying a vacation home.

As Wall Street Journal reporter Jeff Brown writes, “Among the common rookie mistakes are focusing on purchase price, rental rates and recent market trends and counting on more renters than are likely.””

A local agent can give you insights about buying in the area.

The next time you visit your favorite destination — perhaps in the Cayman Islands, the South of France or the Gold Coast of Australia — a top real estate agent can sit down and help you understand what you can reasonably afford.

We put together several questions to ask in a meeting with a real estate agent to better your understanding of owning a vacation rental. Your ultimate goal is to learn if you can make money or break even on your vacation home, or if you’ll need to pay for a second mortgage.

1. How is the vacation rental market in this area? Do vacation homeowners usually get strong occupancy rates? What is the average vacation rental occupancy rate in this area?

2. How much do you think I can afford in a vacation home? How much do homes usually rent for per week in this area?

3. Do you have a relationship with any vacation rental companies that could care for or rent out the property for me? How much would that cost?

4. Do you think I will make money, break even or lose money on this vacation home?

5. What is peak season for vacation rentals in this area?

3. They Can Provide the Latest & Greatest on Trendy Neighborhoods

Real estate agents also know what’s going on in the local market, what homes move the fastest and what vacation areas are ripe for investment. For example, in Las Vegas, top 1% agent Jeff Galindo can anticipate the trends of his area better than any travel agency.

“When things started changing about a year ago, or 18 months ago, give or take, those homes are the ones that started getting swallowed up,” he said. “Those are the ones that people took out of the market and started buying and flipping and rehabbing. So it’s really difficult for anyone to find anything under $100,000 today in our market, which is unusual.”

These neighborhoods are not only good places to invest in, but they’re the areas you should see on vacation. The faster homes start to move, the more interest there is in a particular area, which means locals can’t get enough of it.

Take San Francisco. Visit the city and you might get stuck at Fisherman’s Wharf, on a cable car in Union Square or licking ice cream off your fingers in Ghirardelli Square. The true expression of San Francisco culture, though, is in the Mission District, or the Hayes Valley neighborhood, or in the Castro. These places also have rising home prices.

4. They Can Help You Get More for Your Money

If you are in the market for a vacation home, one strategy to maximize the house you’ll get for your money is to buy a home you can fix up.

Real estate agents will know about properties like these in your vacation destination that are most likely in your price range. If you’ve dreamt about owning a treehouse in Kauai, talking to an agent before you fly over to the island could give you the confidence you need to start looking.

(Don’t forget to check your credit before you start shopping around. You can view two of your credit scores for free on Credit.com.)

5. They Can Help You Pick Your New Perfect Neighborhood

A real estate agent is the person best equipped to match you to neighborhoods she thinks will become your favorite. In addition to roaming the streets to find your favorite new bistro, you’ll get acquainted with areas you could see yourself — and your family — living in.

As Mynor Herrera, top 1% real estate agent in the Washington, Virginia and Maryland areas told us, “There’s so much that a local agent can bring to the table just by institutional knowledge of that marketplace.”

The real estate agent will know the best neighborhoods and get a feel for how people actually live life in your destination.

Ultimately, meeting with a real estate agent on your vacation can give you a new perspective on the area and what it’s like to live there. You may even get inspired to finally buy the beachfront hideaway you’ve always wanted.

Image: Petar Chernaev

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10 Cities Where Millennials Are Buying Homes (& 10 Where They Aren’t)

Millennials are increasingly becoming homeowners, but in some cities more than others.

With staggering student loans, fewer affordable starter homes and lower earnings than the previous generation, young adults own fewer homes than ever. Considering the reputation millennials have in the media for poor financial skills — avocado toast, anyone? — it’s no surprise the millennial generation is very slowly entering the home buying market. Although millennials are the largest generation of adults, they only account for 7.5% of the value of all U.S. homes.

ABODO, an apartment listing company, analyzed the 100 largest metropolitan statistical areas by population from the U.S. Census Bureau 2015 American Community Survey to find the highest and lowest percentage of all millennial householders who are owners.

Home buying among adults ages 18 to 35 has slowed. In 2005, 39.5% of this age group owned homes. That share fell to 32.1% in 2015. (Remember, when buying a home, your credit plays a major part. Before stepping into the home buying market, it’s a good idea to check your credit. You can see a free snapshot of your credit reports on Credit.com.)

This trend might reverse. Recently, more millennials have been entering the home-buying market. Only time will tell if this trend will stick, but for now, here are the 10 cities millennials are buying homes — and the 10 where they aren’t.

Cities Where Millennials Are Buying Homes

10. St. Louis, Missouri-Illinois
Millennial Home Ownership: 40.2%

9. Detroit-Warren-Dearborn, Michigan
Millennial Home Ownership: 40.2%

8. Boise City, Idaho
Millennial Home Ownership: 40.6%

7. Baton Rouge, Louisiana
Millennial Home Ownership: 41.0%

6. Scranton-Wilkes-Barre-Hazleton, Pennsylvania
Millennial Home Ownership: 41.9%

5. Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin
Millennial Home Ownership: 42.4%

4. McAllen-Edinburg-Mission, Texas
Millennial Home Ownership: 43.3%

3. Des Moines-West Des Moines, Iowa
Millennial Home Ownership: 43.6%

2. Grand Rapids-Wyoming, Michigan
Millennial Home Ownership: 45.3%

1. Ogden-Clearfield, Utah
Millennial Home Ownership: 51.0%

Cities Where Millennials Aren’t Buying Homes

10. Durham-Chapel Hill, North Carolina
Millennial Home Ownership: 25.2%

9. Madison, Wisconsin
Millennial Home Ownership: 24.7%

8. New Haven-Milford, Connecticut
Millennial Home Ownership: 24.4%

7. Fresno, California
Millennial Home Ownership: 23.6%

6. San Francisco-Oakland-Hayward, California
Millennial Home Ownership: 20.5%

5. San Jose-Sunnyvale-Santa Clara, California
Millennial Home Ownership: 20.2%

4. New York-Newark-Jersey City, New York-New Jersey-Pennsylvania
Millennial Home Ownership: 19.8%

3. San Diego-Carlsbad, California
Millennial Home Ownership: 19.8%

2. Urban Honolulu, Hawaii
Millennial Home Ownership: 18.3%

1. Los Angeles-Long Beach-Anaheim, California
Millennial Home Ownership: 17.8%

Image: Bauhaus1000

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How to Choose the Low-Down-Payment Mortgage That’s Right For You

Coming up with 20% down isn't always necessary. Here's what you need to know about lown-down-payment mortgage programs.

Low down-payment mortgage loans have been around much longer than most people realize. The Federal Housing Administration  loan requiring just 3.5% down re-emerged in 2008, but today, loans backed by the government requiring even less down are becoming popular. Here are the different kinds of low-down-payment loans available and what you should know about each.

1. FHA Loans

These are loans insured by the Federal Housing Administration that require just a 3.5% down payment and are incredibly flexible on financial history, credit history, and debt-to-income ratios. It is the most widely known low-down-payment program available in the market, is incredibly popular, and is virtually limitless in terms of the property type, income and location. Learn more about FHA loans here.

2. Conventional Loans

Some conventional loans require just 5% down, and in some cases as little as 3% down based on the per-capita-income in the area in which the property is located.

3. USDA Loans

This loan requires no down payment whatsoever and has income limitations and specific area locations. The program is only available in certain areas that are deemed agricultural by the U.S. department of agriculture.

4. VA

The U.S. Department of Veterans Affairs guarantees loans for up to 100% loan-to-value with absolutely no money down. This is hands down the best program in the low-down-payment arena. The program is available to U.S. military veterans and their spouses only.

5. Down Payment Assistance

Some state-specific programs allow homebuyers to put as little as $500 down to purchase a home. For example, in the state of California, a grant is provided for up to 5% of the loan amount, which can go toward the down payment and closing costs.

6. One-Percent Loans  

Some lenders are starting to offer mortgages for as little as 1% and, in some cases, even no money down with grants that need not be repaid. These loans are backed by Fannie Mae, and the lender bears the risk. You can bank on income limitations and needing good credit scores for such programs.

Keep in mind that the better the loan program you have, and the more down payment you have, the better your chances of getting into contract. Plus, most of the low down-payment loan programs available in the marketplace today, except for FHA and a traditional 5% down conventional loan, have income limitations. Income limitations mean your borrowing power in a certain geographic area is limited. Whereas, if you could use a 3.5%-down FHA loan or a 5%-down conventional, for example, your odds of getting into contract would be far greater because your borrowing power would be kicked up a couple of notches.

Here Is some homework to consider:

  • Do you have a down payment? If yes, where do those funds come from? Have you talked to your family about the possibility of getting gift funds for a down payment? You might be surprised by how generous your family could be.
  • If your down payment is very limited, get an honest answer from your real estate agent and lender about your ability to perform in this marketplace and what it would take to make you stronger on paper.
  • Get your financial house in order. That means checking your credit scores — you can see two for free on Credit.com. (the better your credit, the more home you can typically qualify for and the lower your interest rate will be), compiling your recent W-2s, pay stubs, and bank statements so you have enough information to provide to a lender.

Do not accept a lender giving you a just a pre-qualification letter. You want to be pre-approved. Any lender that will not give you a pre-approval letter is a lender that is more concerned about their policies than they are getting you into a home.

Image: Ivanko_Brnjakovic

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How to Get a Mortgage Without a Full-Time, Permanent Job

Here's how to keep your flexible work life from hurting your chances of getting a mortgage.

The growing number of gig economy workers in this country may have the freedom to work whenever they want, and sometimes from wherever they want, but when it comes to buying a home, all of that freedom has its price.

It turns out employees who have many part-time jobs, hop from one short-term contract or project to the next, or rely on freelance work as opposed to permanent jobs, don’t come packaged in the tidy financial box that mortgage lenders typically like.

“Historically the mortgage industry wants everything — residency, credit score and a two-year history of employment. And we’re also trying to predict the likelihood of that continuing for the next three years,” said Whitney Fite, senior vice president, strategic accounts for Atlanta-based Angel Oak Home Loans. “With the gig economy, we’re seeing less and less people fitting in that box.”

Gig economy workers don’t often have the requisite stack of W-2s to document wages. And predictions for future income can be murky. All of which can make obtaining a mortgage an uphill climb unless you, as the gig economy worker, do your homework and start preparing your finances and paperwork well in advance.

Here are six tips to help prepare you for the home loan application process.

1. Get Organized

The No. 1 piece of advice Fite has for gig economy workers who want to own a home is to spend time organizing all of your documentation, including proof of employment and income, the names and phone numbers of references, previous employers, landlords and more. You’ll also want to pull your credit scores so you know exactly where you stand. You can get your two free credit scores on Credit.com.

“Have all of your records, have all the dates of where you worked, who you worked for. It’s going to be onerous from a documentation standpoint, but you need to be prepared,” said Fite.

Gathering this information is more important for gig economy workers than typical borrowers, because you will have to work harder to convince a mortgage lender to approve a home loan.

2. Go the Extra Mile to Educate Your Mortgage Lender

You need to be able to explain to your mortgage lender what you do for a living.

Take the time to educate him or her about your job. Perhaps print out a news article or other information that will help a lender understand what you do.

“You need to prove that your past two years are normal. And that the likelihood of continuance is there,” said Fite. “Be prepared to supply a lot of documentation for that, such as articles about your industry. Things of that nature go a long way. The mortgage lender is not going to make a decision based on it, but it will help create a level of comfort.”

In addition, showing consistency in terms of the type of work you do will improve your chances of obtaining a mortgage, said John Moran, a mortgage professional who runs The Home Mortgage Pro.

A mortgage underwriter is looking for a stable history. Even if the gigs themselves start and stop frequently, gigs within the same industry or utilizing the same skill set will be considered more favorably.

3. Ease Up on the Deductions…

Self-employed individuals, as gig economy workers typically are, often use a Schedule C when filing taxes to report income and write off numerous expenses tied to working the way they do.

The downside of deducting a long list of expenses from your income is that it reduces your profits on paper. You may bring in $73,000 in a given year. But after deducting the cost of everything from internet and cell phone bills, to travel, business meals and professional memberships, your net income on paper may be far less.

“Use caution in how you’re deducting expenses as it’s the net income that’s used to qualify for a mortgage, not the gross pay,” said Kevin Hardin, a senior loan officer with HomeStreet Bank. “It’s tempting to use the full breadth of the IRS tax laws to reduce taxable income, but every dollar that is reduced from that taxable income reduces the income that can be used for qualifying for a mortgage.”

So, if you know you want to buy a home in the near future, consider forgoing some or all of the deductions for a year or two to increase the income you’re reporting.

4. …But First, Talk With a Mortgage Officer About Your Goals

Before completely doing away with claiming any or all expenses on your tax return, however, talk to a mortgage officer about your home buying goals. Here are some tips for finding a good mortgage lender.

“Go to a mortgage officer and say, ‘This is the amount of home I want to buy, how much income will I need to show?’” said Hardin. “Don’t just arbitrarily stop writing things off.”

In other words, get educated about the income you’ll need to show on paper first, before throwing write-offs out the window. Once you’ve identified how much mortgage you’d like, it will be easier to determine what the monthly mortgage payment would be and thus, how much income you’ll need to be able to document.

“The first step is to talk to a mortgage loan officer and then take that information to your tax preparer and say, ‘This is the number I need to hit in terms of income,’” Hardin said.

5. Get Your Debt Down

Let’s stress this one more time — because you are a gig economy worker, mortgage lenders will require more assurance that you’re qualified for a loan and that you’re a good risk.

To that end, work to get your debt down to zero, or as low as possible before applying for a mortgage, and keep your credit score in excellent standing, said Casey Fleming, a mortgage adviser since 1995 and author of The Loan Guide: How to Get the Best Possible Mortgage.

“Self-employed borrowers are going to be held to a higher standard because there is an added layer of risk with them,” said Fleming.

6. Try a ‘Bank Statement’ Mortgage

Newly emerging “bank statement” mortgage programs may be a good option for self-employed or gig economy workers to consider, said Fite, of Angel Oak Home Loans.

Such mortgages rely upon reviewing 12 to 24 months worth of deposits to one bank account  and a profit and loss statement for your business, in lieu of the traditional two years of tax returns, W-2s, and payroll checks.

“These are geared toward the gig economy. It’s a rapidly growing segment of mortgages across our industry,” said Fite.

A variety of mortgage lenders are beginning to offer this loan option.

Image: Jacob Ammentorp Lund

The post How to Get a Mortgage Without a Full-Time, Permanent Job appeared first on Credit.com.

How a Coat of Paint Can Determine Your Home’s Sale Price

An inexpensive can of paint holds a lot more power than you think.

From the time of year to the neighborhood, a lot of factors come into play when you’re selling a home. But here’s one variable you might not have considered — color.

During open houses and online searches, the colors of your home are constantly working for or against you. That’s according to Zillow, a real estate and rental marketplace, which examined over 32,000 photos from sold homes around the country to see how certain paint colors impacted their average sale price compared to homes of similar value with white walls. Here’s what they found.

A Change of Trends

The colors that added value to your home just a year ago can now be hurting its sale price. In 2016, painting your kitchen a shade of yellow could help your home sell for $1,100 to $1,300 more. However, this year, a yellow kitchen could lower your home’s value by an estimated $820, according to Zillow.

Some color preferences remained consistent, with terracotta walls still devaluing a home. Just last year, homes with terracotta walls sold for $793 less than Zillow’s predicted selling price. This year, that number more than doubled, with homes with terracotta walls selling for $2,031 less.

The takeaway: If you’re looking to sell your home, you may want to avoid a terracotta shade. Also be cautious in general when choosing dark and bold colors.

Keep it Light

“Painting walls in fresh, natural-looking colors, particularly in shades of blue and pale gray, not only make a home feel larger but also are neutral enough to help future buyers envision themselves living in the space,” said Svenja Gudell, Zillow’s chief economist, in a statement.

In fact, homes with blue bathrooms, including lighter shades of blue or periwinkle, sold for $5,440 more than expected, Zillow found. Kitchens with light blue-gray walls sold for $1,809 more than expected, and walls with cool, natural tones like soft oatmeal and pale gray also had top-performing listings.

Light, simple walls performed best among sellers, however, walls with no color had the most negative impact on sales price. Homes with white bathrooms or no paint color, for instance, sold for an average of $4,035 less than similar homes, Zillow noted.

Head Outside

As if it isn’t stressful enough worrying about your rooms’ colors, your home’s exterior color can also impact its sale price.

To that end, buyers typically enjoyed a pop of color, with homes featuring dark navy blue or slate gray front doors selling for $1,514 more. Buyers also responded positively to trendy mixes of light gray and beige, or “greige,” exteriors versus basic tan stucco and medium-brown shades.

If you’re trying to sell your home, a can of paint can be a wise investment — so long as you choose the right color. Keep these findings in mind before you head to the paint store. Likewise, just as color impacts sale price, know that selling your home can impact your credit. Don’t forget to check your credit report card before you start picking out paint chips.

Image: andresr

The post How a Coat of Paint Can Determine Your Home’s Sale Price appeared first on Credit.com.

What an Interest Rate Hike Could Mean for Your Wallet

We spoke with a couple of financial advisors to find out what the Fed's new benchmark rate may mean for your money.

On Tuesday and Wednesday, the Federal Reserve, the U.S. central bank that determines interest rates, plans to meet in Washington. Unless something goes off the rails, chances are the Fed will approve another quarter-point hike in interest rates. You may not think that affects you, but chances are it will. We spoke with a couple of financial advisers to find out what the Fed’s new benchmark rate could mean for your money.

Auto Loans 

Though lenders have begun offering variable-rate loans, most car buyers take out fixed-rate loans. Since the loan is fixed, the Fed’s interest hike probably won’t have a direct impact on your loan, said Robert Dowling, a financial planner with Modera Wealth Management in Westwood, New Jersey. However, if you’re in the market for a new set of wheels, prepare to face higher interest rates for the new loan.

Credit Cards

Credit cards, which typically come with variable interest rates, will definitely be affected by the Fed’s rate hike, said Dowling. If you maintain a balance, as many consumers do, expect to see your monthly payments go up — and your balance balloon if you aren’t careful.

If you can’t afford a higher monthly payment or feel compelled to pay off your debt, now’s the time. Ridding yourself of debt will free up your budget and help you improve your credit score. Debt is one of the key factors lenders use to determine whether to extend credit. You can learn more about the high price of debt and its affect on your credit score here. (Not sure where your credit stands? View two of your credit scores for free on Credit.com.)

Mortgages

With interest rates expected to rise, prepare for your monthly mortgage payment to rise along with them if your loan has a variable rate, said Jude Boudreaux, a financial planner based in New Orleans. “The higher the interest rate and more variable the debt, the more of an issue [the Fed rate hike] certainly is.”

Higher rates also put pressure on the sale of homes, though you shouldn’t rush to buy one if you aren’t financially ready. “People never go to the bank and say, ‘I want to spend $300,000 on a house,'” said Boudreaux. “They go to a lender and say, ‘Here’s my income and my debts, what can I afford?’ So when interest rates rise, what they can afford is less.” You can see how much home you can reasonably buy here.

Savings Accounts & Certificates of Deposit

At times, major banks quickly respond to Fed rate hikes by paying higher interest on savings accounts. That isn’t always the case, but it doesn’t hurt to shop around if you want better rates. According to experts, online banks, community banks and credit unions may raise their rates faster as they attempt to lure customers away from major banks.

Refinancing

“The Fed has made it clear that they would like to raise rates this year, so in general, what that means for us is if we have debt that we can lock in at lower interest rates, great,” said Boudreaux. If refinancing your home is on the agenda, “take a hard look at those numbers.”

Likewise, if you’re burdened by student loan debt and looking to move from a federal to private lender, “that would be a high priority too,” said Boudreaux, who’s seen interest rates soar in response to the Fed. Doing what you can now to offset higher costs in the future could be a boon for your savings.

Keep your eye out Wednesday to see what happens next.

Image: gruizza

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10 States Suffering the Most From Foreclosures

Foreclosures declined for the 20th consecutive month year-over-year, but were still high in these 10 states.

Foreclosures in May were down 19% from the previous year, the 20th straight month of year-over-year declines, according to data released by ATTOM Data Solutions.

A total of 81,495 U.S. properties had a foreclosure filing in May, or one in every 1,636 units. Despite the declines, some states continue to struggle with foreclosures, particularly New Jersey, where foreclosure rates are high in communities like Atlantic City and Trenton.

A foreclosure can wreak havoc on a homeowner’s credit. You can see how your mortgage or foreclosure is affecting your credit score by checking your free credit report summary on Credit.com.

Here are the ten states with the highest foreclosure rates.

10. South Carolina

May 2017 Foreclosure Rate: 1 in every 1,186 housing units

Change from April 2017: Up 1.89% (was No. 8)

Change from May 2016: Down 20.41% (was No. 7)

9. Ohio

May 2017 Foreclosure Rate: 1 in every 1,176 housing units

Change from April 2017: Up 8.25% (was No. 9)

Change from May 2016: Down 16.84% (was No. 9)

8. New Mexico

May 2017 Foreclosure Rate: 1 in every 1,168 housing units

Change from April 2017: Up 73.50% (was No. 20)

Change from May 2016: Down 11.38% (was No. 10)

7. Florida

May 2017 Foreclosure Rate: 1 in every 1,140 housing units

Change from April 2017: Up 5.38% (was No. 7)

Change from May 2016: Down 35.00% (was No. 4)

6. Nevada

May 2017 Foreclosure Rate: 1 in every 1,108 housing units

Change from April 2017: Up 2.87% (was No. 6)

Change from May 2016: Down 22.76% (was No. 5)

5. Oklahoma

May 2017 Foreclosure Rate: 1 in every 1,081 housing units

Change from April 2017: Up 81.53% (was No. 19)

Change from May 2016: Up 63.84% (was No. 26)

4. Illinois

May 2017 Foreclosure Rate: 1 in every 1,057 housing units

Change from April 2017: Up 2.47% (was No. 5)

Change from May 2016: Down 16.90% (was No. 6)

3. Maryland

May 2017 Foreclosure Rate: 1 in every 1,006 housing units

Change from April 2017: Down 22.94% (was No. 3)

Change from May 2016: Down 30.80% (was No. 2)

2. Delaware

May 2017 Foreclosure Rate: 1 in every 753 housing units

Change from April 2017: Down 6.30% (was No. 2)

Change from May 2016: Down 4.18% (was No. 3)

1. New Jersey

May 2017 Foreclosure Rate: 1 in every 515 housing units

Change from April 2017: Up 9.29% (was No. 1)

Change from May 2016: Up 8.81% (was No. 1)

Image: mactrunk 

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Here’s What You Need to Know About Getting a Mortgage With ‘Paper Losses’

If you're tax returns show a net loss, you may have a tough time getting a mortgage. Here's what you need to know.

You probably already know qualifying for a mortgage requires an acceptable credit score, sufficient assets and stable income. All of these show you can support a mortgage payment, plus other liabilities. But what if you have “paper losses” on your tax returns? The mortgage process can get a little trickier. Here’s what you need to know.

You Have Rental Income Losses

On almost every mortgage loan application this can come back to bite the borrower. This is because rental losses usually represent more expenses going out than there is revenue to cover the property. Lenders use a special Fannie Mae formula, which in most instances makes losses look even worse. This is because the expenses are added back into the mortgage payment, then deducted from it over a 24-month period.

It is important to note that, when purchasing a rental for the first time, some lenders use an exception basis. The exception they are going to use is 75% of the projected market rentals. This is to help offset the mortgage payment as long as you are specifically purchasing a rental property.

You Have a Schedule C

This is a biggie. No one wants to pay an excess amount of taxes, especially self-employed individuals. You may be aware taxation is higher for self-employed individuals. So it goes without saying: Every accountant wants to be a hero by saving you money when helping with your tax returns. They could, however, be doing this at the expense of you refinancing or buying a home.

Writing off all your expenses, or worse, showing negative income means the lender has less income to offset a proposed mortgage payment. Even if you own a home already, have excellent credit and have an impeccable payment history, it does not matter. The income on paper is what lenders look at.

You Have Entity Losses

The following scenario is a common one where borrowers pay themselves a W-2 wage along with a pay stub, at the expense of bleeding the company dry. This will become problematic, because there almost certainly will be lower income figures. The same income figures the borrower is trying to qualify with.

Any negative income being reported on personal or corporate tax returns, will hurt your chances of qualifying for financing. As a result, one of these may be an offset, but they are not limited to the following:

  • Waiting until the following year – Depending on the severity of how much income loss there is, you may need to do a two-in-one. This means showing two years of income in one year. This is to offset the two year averaging lenders use when calculating your income.
  • Changing loan programs – This could be an array of different things, but it may mean going from a conventional mortgage to a FHA mortgage for example.
  • Investigating more – You might need to put more money down to purchase a home than you otherwise thought. You would do this if your income is lower than what your purchase price expectations are.
  • Paying off debt – Depending on your financial scenario, paying off consumer obligations is always a smart and healthy approach, and can improve your overall credit scores, even if it requires some of your cash. (You can check two of your credit scores free on Credit.com.)

What should you do if you know you want to qualify for financing and you currently have tax returns that contain losses? First and foremost, consult with your tax professional. Learn what your options are. Once armed with those options, talk to a lender skilled enough to help you understand how much financial power you may have in the marketplace.

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