What You Need to Know About PMI Insurance

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AKA: Private Mortgage Insurance (PMI)

What You Need to Know About Private Mortgage Insurance (PMI) | MyKCM

Whether it is your first time or your fifth, it is always important to know all the facts when it comes to buying a home. With the large number of mortgage programs available that allow buyers to purchase homes with down payments below 20%, you can never have too much information about Private Mortgage Insurance (PMI).

What is PMI?

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

According to the National Association of Realtors, the average down payment for all buyers last year was 13%. For first-time buyers, that number dropped to 7%, while repeat buyers put down 16% (no doubt aided by the sale of their homes). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

What You Need to Know About Private Mortgage Insurance (PMI) | MyKCM

Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and help you make the best decision for you and your family.

What is Important to Charlotte NC area Boomers when Selling their House?

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What is Important to Boomers when Selling their House? | MyKCM

If you are a “baby boomer” (born between 1946 and 1964), you may be thinking about selling your current home. Your children may have finally moved out. Your large, four-bedroom house with three bathrooms no longer fits the bill. Taxes are too high. Utilities are too expensive. Cleaning and repair are too difficult. You may be ready to move into a home that better fits your current lifestyle. Many fellow boomers have already made the move you may be considering.

The National Association of Realtors recently released their 2019 Home Buyer and Seller Generational Report. The report revealed many interesting tidbits about both categories of baby boomers: younger boomers (ages 54 to 63) and older boomers (64 to72). Here are a few of the more interesting topics.

Percentage of Buyers who Looked Online First

  • All Buyers: 44%
  • Younger Boomers: 46%
  • Older Boomers: 44%

Where Boomers Found the Home They Purchased

The two major ways buyers found the home they purchased:

  • All buyers: 50% on the internet, 28% through a real estate agent
  • Younger Boomers: 46% on the internet, 33% through a real estate agent
  • Older Boomers: 36% on the internet, 35% through a real estate agent

Distance Seller Moved

The distance between the home they purchased and the home they recently sold was much greater for boomers than the average seller.

  • All sellers: 20 miles
  • Younger Boomers: 27 miles
  • Older Boomers: 50 miles

Tenure in Previous Home of Seller

The percentage of older boomers who lived in their previous home for more than 20 years was almost twice the amount of the average seller.

  • All sellers: 16%
  • Younger Boomers: 20%
  • Older Boomers: 31%

Primary Reason to Sell their Previous Home

  • Want to move closer to friends or family
  • Home too large
  • Retirement

View of Homeownership as a Financial Investment

  • 83% of Younger Boomers see homeownership as a good investment
  • 82% of Older Boomers see homeownership as a good investment

Bottom Line

If you are a boomer and thinking about selling, now might be the time to contact an agent to help determine your options.

2 Things You Need to Know to Properly Price Your Charlotte Area Home

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2 Tips From Carolina Living Real Estate

In today’s housing market, home prices are increasing at a slower pace (3.7%) than they have over the last eight years (6-7%). However, they are still are above historical norms. Low supply of listed homes and high demand from buyers has pushed prices to rise rapidly.

In the mind of the homeowner, annual home price appreciation over 6% has become the new normal. This becomes a challenge when a homeowner looks to refinance or sell their home, as the expectation of what the homeowner believes the home should be worth does not always line up with the bank’s appraisal.

Every month, the Home Price Perception Index (HPPI) measures the disparity between what a homeowner seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.

Over the last five months, the gap between the homeowner’s opinion and the bank’s appraisal has widened to -0.78%. This is important for homeowners to note, as even a 0.78% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home).

The chart below illustrates the changes in home price estimates over the last 12 months.

2 Things You Need to Know to Properly Price Your Home | MyKCM

While the appraisal gap widens, another trend is also becoming more common.

According to realtor.com, “the share of homes which had their prices cut increased by 2% compared to last year”. Thirty-seven out of the 50 largest US housing markets saw an increase in overall price reductions.

In today’s market, you need an expert agent who can help price your house right from the start. Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the house. In reality, nothing is wrong- the price was just too high!

Bottom Line

If you are planning on selling your house in today’s market, let’s get together to set your listing price properly from the start!

Paying for Home Projects: How Homeowners Can Make Changes Without Breaking the Bank

By admin
Carolina Living Real Estate, Charlotte Real Estate


Home repairs can be very costly, even when they are DIY projects. Paying for all the materials or covering a professional’s services can quickly turn into thousands of dollars in unplanned costs
, which will just as quickly lead to stress or anxiety. Whether you need to make repairs to the roof after a big storm or are planning to install a new air conditioning system, it’s crucial to have a good plan in place. In some cases, your homeowners insurance
may help cover the cost of repairs, but not always, so you’ll need to read up on your policy.
 
When you need to hire a professional, keep in mind that many services will allow you to set up a payment plan if the bill is over a certain amount. This is a great way to pay off what you owe without having to lay out thousands of dollars up front, but it will most likely come with interest charges, so make sure you understand the terms before agreeing to them.
 
Paying for home repairs and maintenance can be stressful, but it doesn’t have to be. Read ahead to find out more about how you can prepare.
 
Do Your Research on AC Units
 
Central air units are some of the most expensive things to replace or add to a home, so it’s important to do some research before you buy. There are many different sizes and types of units
, and having some knowledge of the way they work will help you make the right decision. You’ll also need to consider whether the home needs to have a breaker panel installed and how big the space is that you want to cool. Having a professional do the installation is essential; keep in mind that the cost for this service can go as high as $15,000
.
 
Build Up a Home Repair Fund
 
Saving money isn’t always easy, but if you can find a way to put aside some money now and then for a repair fund, you’ll be able to reduce a lot of the stress that comes with owning a home. Things tend to go wrong at the worst possible time, and having the extra money set aside when the hot water heater quits or when the electrical wiring needs some work will help to ensure that you can get it taken care of without having to worry about gathering the funds. Set a budget
for your daily spending to get a handle on how much you could potentially be saving, then start small
; take your lunch to work instead of eating out, carpool once or twice a week to save on gas, or get the family involved in a routine that will help everyone remember to turn off lights and appliances when they aren’t being used in order to save on your utility bills. You can also make a plan to pay off
your credit card, especially if you’ve had to use them to cover repairs.
 
Know the Signs of Damage
 
It can sometimes be difficult to recognize signs of damage
, especially in an area that’s hard to see every day, but it’s important to make sure you know what to look for so that repairs don’t take too long. When it comes to your roof, the cost of fixing any damage can be high if you wait (a roof replacement in Huntersville can cost up to $9,000
). Keep an eye out for missing or broken shingles or damp spots on your ceilings or walls, and hire a pro for the job only after researching local contractors
.
 
Paying for home repairs and renovation projects can be a big hardship if you aren’t prepared, so plan well before you begin. Do a little research to make sure you’re comfortable with the task at hand, and always call in a pro for the big jobs; otherwise, you run the risk of creating damage or making a small problem bigger.

Starting the Search for Your Dream Home? Here Are 5 Tips!

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Starting the Search for Your Dream Home? Here Are 5 Tips! | MyKCM

In today’s real estate market, low inventory dominates the conversation in many areas of the country. It can often be frustrating to be a first-time homebuyer if you aren’t prepared.

In a realtor.com article entitled, “How to Find Your Dream Home—Without Losing Your Mind,” the author highlights some steps that first-time homebuyers can take to help carry their excitement of buying a home throughout the whole process.

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

This step will also help you narrow your search based on your budget and won’t leave you disappointed if the home you tour, and love, ends up being outside your budget!

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the ‘man cave’ of your dreams be a future renovation project instead of a make-or-break right now?

Before you start your search, list all the features of a home you would like and then qualify them as ‘must-haves’, ‘should-haves’, or ‘absolute-wish list’ items. This will help keep you focused on what’s most important.

3. Research and Choose a Neighborhood You Want to Live In

Every neighborhood has its own charm. Before you commit to a home based solely on the house itself, the article suggests test-driving the area. Make sure that the area meets your needs for “amenities, commute, school district, etc. and then spend a weekend exploring before you commit.”

4. Pick a House Style You Love and Stick to It

Evaluate your family’s needs and settle on a style of home that would best serve those needs. Just because you’ve narrowed your search to a zip code, doesn’t mean that you need to tour every listing in that zip code.

An example from the article says, “if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.”

5. Document Your Home Visits

Once you start touring homes, the features of each individual home will start to blur together. The article suggests keeping your camera handy to document what you love and don’t love about each property you visit.

Making notes on the listing sheet as you tour the property will also help you remember what the photos mean, or what you were feeling while touring the home.

Bottom Line

In a high-paced, competitive environment, any advantage you can give yourself will help you on your path to buying your dream home.

New Research Shows Housing Is Affordable For First-Time Buyers

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New Research Shows Housing Is Affordable For First-Time Buyers | MyKCM

Home prices have been on the rise for the last seven years, leading many housing market analysts to conclude that first-time homebuyers are being shut out of the market due to affordability concerns.

The National Association of Realtors (NAR) reports on the percentage of First-Time Home Buyers (FTHB) on a monthly and yearly basis. Their latest report shows that FTHB’s made up 33% of buyers in March, which matches their reported share in 2018.

NAR uses survey data from their members to come up with this statistic, so their results do not include every transaction completed. Rather, they only show the transactions reported by members who complete the survey.

The other entity that reports on FTHB share is the American Enterprise Institute (AEI). The AEI uses data from mortgage applications that define an FTHB as “any borrower who did not have a mortgage for the preceding three years.”

This means the AEI measurement also includes former homeowners who transitioned out of a home they previously owned and re-entered the market after at least 3 years. The latest FTHB share data from AEI shows that first-time buyers made up 57.5% of all mortgages in August 2018. NAR’s data shows a 31% share for the same time period.

New research from the New York Federal Reserve shows that these traditional reports on FTHB share have been unable to give an accurate depiction of this group’s involvement in the market.

The NY Fed was able to take consumer credit data and identify when a mortgage payment entered a consumer’s credit report to determine when a first-time home purchase was made. Using this data, they were able to show that AEI’s reported FTHB share was consistently 10% higher. The NAR reports were right on par with their findings until 2010, when NAR’s share dropped to the 11% gap seen today.

So, what does this all mean?

First-time home buyers have not disappeared from the market as many analysts had believed. Buying a home is very much a part of the American Dream for younger generations, just like it had been for their parents and grandparents.

This also means that rising prices have not scared buyers away from the market. Many first-time buyers are making sacrifices to save their down payment and make their dream a reality.

Bottom Line

If you are one of the many renters who is scrolling through listings on your phone every night dreaming of buying your own home, there are opportunities in every market to make that dream a reality!

Are You About to Be an Empty-Nester?

By admin

In the next couple of months, millions of students will be graduating and moving out of their parents home. If you’re a soon-to-be empty nester considering downsizing or making a move, let’s get together to discuss your options! Contact Roby Robertson for all the info you will need.

Also See ‘Seniors Guide T House Hunting In Charlotte‘!

The Benefits of a 20% Down Payment

By admin

The Benefits of a 20% Down Payment | MyKCM

If you are in the market to buy a home this year, you may be confused about how much money you need to come up with for your down payment. Many people you talk to will tell you that you need to save 20% or you won’t be able to secure a mortgage.

The truth is that there are many programs available that let you put down as little as 3%. Those who have served our country could qualify for a Veterans Affairs Home Loan (VA) without needing a down payment.

These programs have cut the savings time that many families would need to compile a large down payment from five or more years down to a year or two. This allows them to start building family wealth sooner.

So then, why do so many people believe that they need a 20% down payment to buy a home? There has to be a reason! Today, we want to talk about four reasons why putting 20% down is a good plan, if you can afford it.

1. Your interest rate will be lower.

Putting down a 20% down payment vs. a 3-5% down payment shows your lender/bank that you are more financially stable, thus a good credit risk. The more confident your bank is in your credit score and your ability to pay your loan, the lower the rate they will be willing to give you.

2. You’ll end up paying less for your home.

The bigger your down payment, the lower your loan amount will be for your mortgage. If you are able to pay 20% of the cost of your new home at the start of the transaction, you will only pay interest on the remaining 80%. If you put down a 5% down payment, the extra 15% on your loan will accrue interest and end up costing you more in the long run!

3. Your offer will stand out in a competitive market!

In a market where many buyers are competing for the same home, sellers like to see offers come in with 20% or larger down payments. The seller gains the same confidence that the bank did above. You are seen as a stronger buyer whose financing is more likely to be approved. Therefore, the deal will be more likely to go through!

4. You won’t have to pay Private Mortgage Insurance (PMI)

Simply put, PMI is “an insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.”

As we mentioned earlier, when you put down less than 20% to buy a home, your lender/bank will see your loan as having more risk. PMI helps them recover their investment in you if you are unable to pay your loan. This insurance is not required if you are able to put down 20% or more.

Many times, home sellers looking to move up to a larger or more expensive home are able to take the equity they earn from the sale of their house to put down 20% on their next home.

If you are looking to buy your first home, you will have to weigh the benefits of saving a 20% down payment vs. the time and cost of continuing to rent while you save that amount.

Bottom Line

If your plan for your future includes buying a home and you’re already saving for your down payment, let’s get together to help you decide what down payment size best fits with your long-term plan!

Seniors’ Guide to House Hunting in Charlotte

By admin

Buying a home for your retirement years opens up great possibilities. You can choose a location that offers amenities for you to make the most of retirement, which is an extremely liberating reality after a life of hard work. If you’re looking for a slightly smaller metropolitan area that still boasts all of the desirable aspects of city life, then Charlotte, North Carolina might be a great fit for you.

Charlotte is among the top 35 best places in the US to retire, according to rankings from U.S. News, much of this has to do with the abundance of senior-friendly activities the city has to offer. Charlotte has several museums and galleries in the downtown area, and residents have easy access to live theater. Seniors who love the great outdoors can enjoy the area’s many parks, trails and hiking opportunities.

Beyond entertainment and enjoyment, you’ll want to make sure you choose a house that is relatively close to healthcare facilities you may need. In this category, Charlotte remains a great choice. There are 238 physicians per 100,000 population in Charlotte, which exceeds the US average of 210 per 100,000 people. Additionally, in Charlotte, there are several local hospitals that are under magnet status, which is the highest credential for nursing practices across the world.

If you’re ready to start searching for potential homes in Charlotte, here are a few tips you should keep in mind:

Carefully Budget for Retirement

Charlotte residents love that the city is a very affordable place to live. According to real-estate website Zillow, the median home value in Charlotte is $224,200. This is slightly below the national median price of $229,800.

While real estate is definitely cost-effective in Charlotte, you’ll need to keep in mind that affording a house is more than just the down payment and mortgage – you need to make sure you are financially prepared to shoulder any financial burdens that may come with owning a home in the long haul.

Taxes are an important consideration when developing a retirement budget. Having a grip on how much you’ll need to pay in taxes will give you a clearer picture of what exactly you’ll have in your pocket each month. The tax environment in North Carolina is favorable for retirees. According to consumer finance company SmartAsset, Charlotte is considered to be tax-friendly for retirees. The state of North Carolina exempts all Social Security retirement benefits from income taxes, while other forms of retirement income are taxed at the state’s flat income tax rate of 5.499%. The state’s property and sales taxes are both moderate, and seniors may be eligible for a property tax break under homestead exclusion. Your real estate agent can help you determine your eligibility.  

Find Amenities to Help You “Age in Place

In the ideal scenario, seniors can buy a home for their retirement that they can plan to stay in for the long haul. Your realtor can help you target homes that can age with you – even through health issues or mobility limitations. There are certain design elements that can help ensure your new home will always be appropriate for you, including a one-story layout, no-step entryways, wide hallways and shower grab bars.

Consider Other Senior Living Options in Charlotte

Buying a home isn’t the only option you have when it comes to relocating for retirement. If you don’t want to manage the chores that come with owning a home, but would still like to live independently, you should consider moving into a retirement community. These communities, also called “55-plus communities,” provide a safe environment that frees you from some home maintenance responsibilities you may need assistance with, allowing you to focus on those activities that bring you the most joy. Retirement communities often offer different amenities for you to maximize your retirement – including pools, fitness centers, arranged transportation and senior happy hours.

If you think you will need help with activities of daily living, including medication management, bathing or dressing, then an assisted living facility could be the best living option for you. There are many top-rated communities in the Charlotte area and more that are located in surrounding areas. Your realtor can help you narrow down the best communities that will suit your preferences and budget.

Connect With a Reliable Realtor

Having a reliable realtor by your side is an extremely crucial part of the house hunting process. You should take the time to think about and discuss with your realtor both big-picture issues like location, as well as small details like your daily lifestyle preferences. Ask prospective realtors if they’ve been trained in helping senior homebuyers in the 50-plus age range, and have transparent conversations about what you’re looking for in a new home, including budget and timeline.

Whether you are a Charlotte native or a retiree relocating to Charlotte from elsewhere, I can help you find the perfect home and make your move as stress-free as possible. If you are thinking of selling, buying or renting a home and would like more information on my services,  please feel comfortable reaching to me. There is never any pressure placed on you and I am happy to help! Contact me, Roby Robertson, to get started.