By Joe Szabo, Scottsdale Real Estate Team Early-career home buyers tend to be light on cash, while mid-career home buyers are saving for retirement, and retiree home buyers are facing less income. Each of these life phases requires a different mortgage strategy. Here are some planning tips to help you make smart decisions, no matter where you are in life.

Planning basics

There are three main considerations in mortgage planning:

1. Cash to close. Most home loans require a down payment, which can range from 3 percent to 20 percent of a home’s purchase price. In addition, a home purchase will also have closing costs, which can range from 1 percent to 3 percent of a home’s purchase price, and will cover lender fees, title/escrow fees, and various property taxes that vary by county.
2. Monthly cost. When you rent a home, you have a rental payment plus certain utility bills that your landlord doesn’t pay. When you’re a homeowner, you have a mortgage payment (comprised of interest and monthly pay-down on your loan), property taxes, insurance, all utility bills, and maintenance — plus mortgage insurance and condo homeowners association dues, if applicable. On top of this, you should also be saving a certain amount per month for longer-term maintenance and repairs as your home ages.
3. Home equity. The percentage of your home’s value that isn’t financed is called equity, and your equity can grow in two ways: by paying your loan down, or by your home increasing in value. Equity is the part of homeownership where your wealth can grow over time.

Let’s see how these planning concepts apply to home buyers in different phases of life.

Millennials: finding the down payment

Millennial home buyers haven’t been in the workforce that long, so cash to close is often the primary consideration for them. A 20-percent down payment means you’ll avoid extra costs like a second mortgage or mortgage insurance. However, if you’re a younger buyer who hasn’t saved 20 percent yet — and you don’t want to postpone the benefits of homeownership while you save — don’t worry: your down payment can be as low as 3 percent. On a $300,000 home purchase, a 3-percent down payment is $9,000, and a 20-percent down payment is $60,000. The tradeoff comes in monthly payment. If you go with the $9,000 down payment, your monthly payment using a 30-year fixed rate of 3.5 percent will be about $1,911. This includes your mortgage payment, property taxes, insurance, and mortgage insurance. The $60,000 down payment scenario gives you a $1,444 payment. Putting 3 percent down costs $467 more per month, but requires $51,000 less down payment. When figuring out your optimal down payment with your mortgage advisor, don’t forget that closing costs of 1 percent to 3 percent on a $300,000 purchase price will be $3,000 to $9,000 on top of down payment.

Gen Xers: balancing spending and saving

Gen X home buyers are mid-career, and monthly costs are often their primary consideration as they save for retirement and their kids’ college expenses. On our $300,000 purchase price example, Gen Xers’ big decision could be the same as the millennial decision: do you choose to pay $467 more per month to save $51,000 in down payment? If you did, we know you’d have a monthly cost of $1,911, excluding maintenance and utilities, for a $300,000 home with 3 percent down. We also know that your property taxes and mortgage interest are tax deductible, and this would result in an after-tax monthly housing cost of about $1,566. Now we need to compare $1,566 in after-tax housing cost to what it would cost to rent a home of the same quality in the same area. If it’s about the same to rent vs. buy, then you have a good scenario to conserve cash and be a homeowner. Your mortgage and financial advisers can run different down payment scenarios to optimize the balance between monthly cost and cash preservation.

Baby boomers: living on less

Because baby boomer home buyers are late-career or retired, living on less income is often their primary consideration. If you’re a baby boomer with equity in your home but less income-generating savings than you planned for, you have a few options to sort through with your mortgage adviser:

• Get a reverse mortgage that allows you to convert a portion of the equity in your home into cash to live on.
• Get a home equity loan to obtain cash from your home — but this is a traditional loan that comes with a monthly payment.
• Sell your home to buy or rent a cheaper home and get cash.

Like any other investing plan, a home-buying plan always proves more effective if you start young, because your home equity grows as you pay down your loan and your home appreciates in value. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

By Joe Szabo, Scottsdale Real Estate Team In early May, homes sell fastest and for more money, according to the newest data. This is the new magic listing window for the country’s 25 biggest metro areas. Weather and housing market dynamics affect the exact best window to sell in different areas, and this year, a low supply of homes on the market has pushed the window later in the spring. In Zillow’s first analysis of the best time to list, homes listed between mid-March and mid-April sold fastest and for the highest price. But the decline of the number of homes on the market has increased competition, so shoppers who start looking for a home in early spring may need to look at several homes and will often still be shopping a few months later. By May, some buyers may be anxious to get settled into a new home before the next school year — and will be more willing to pay a premium to close the deal. For sellers hoping to sell quickly and get the maximum sale price for your home, the time to list is right in the first half of May. Nationally, homes sold May 1-15 sell about 18.5 days faster and for 1 percent more than the average listing. That means an average premium of $1,700 for the seller of a median home. Today, Zillow has launched a new tool to personalize this data for individual sellers. The new Best Time to List feature estimates how much more money a seller can make by changing the listing date on their individual home. The tool is live for 71 million off-market homes, and registered Zillow users can find it by clicking the “Sell Your Home” on the home details page for an individual home. The methodology for the analysis, originally featured in “Zillow Talk: Rewriting the Rules of Real Estate,” is detailed on Zillow Research. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

By Joe Szabo, Scottsdale Real Estate Team If the kitchen is the heart of the home, its major appliances are what keep it pumping. So it’s no surprise that 46 percent of American homeowners cite the cook space as the area where they’d most likely splurge on a remodel — and 56 percent of those planning work have set their sights on new appliances, according to a recent national survey by LG Electronics. If your last kitchen remodel was years ago, a lot has probably changed since the last time you bought a fridge, dishwasher, range, or cooktop-oven combo. You’ll need to factor in the latest high-tech features, as well as your kitchen’s size and layout, your family’s cooking and eating habits, your aesthetic taste, and, of course, your budget. To save money, it’s smart to comparison shop online, hunt for coupons, and negotiate with retailers for a better deal or perks like free delivery and installation. And think ahead: Buying a model that has earned an Energy Star label can mean lower electric bills over the lifetime of your new appliance. Above all, before you make any big purchase, measure not just your space but also your doorways to make sure your sparkly new appliance will actually fit in your home.

Finding a fridge

A family of four is usually fine with fridge capacity of 19 to 22 cubic feet, though there are now models on the market boasting 30 cubic feet and more. Beyond size, your primary consideration is door style.

• Traditional top-freezer models offer ample storage for small kitchens.
• Bottom-drawer freezers store popular fare at eye-level, as folks tend to reach for fresh foods more often than frozen ones.
• Side-by-sides (fridge on the right, freezer on the left) are well suited to narrow spaces.
• French door models, with a freezer on the bottom, tend to be taller and wider. Some high-capacity four-door units even include one versatile compartment that can function as a fridge or freezer.
• Finally, a pricey built-in fridge with your choice of door configuration can lie flush with, and possibly even match, your cabinets for a sleek look.

In terms of key features, look for temperature-controlled meat and produce bins, humidity monitoring for freshness, and easy-to-arrange shelves. If you can splurge, other cool conveniences include door-in-door storage and through-the-door ice/water dispensers — a handy option that, alas, tends to be the first thing to break in a fridge.

Deciding on a dishwasher

Today’s dishwashers work harder (no prerinsing required) and more quietly than their predecessors. A conventional dishwasher is often all the average family needs, though premium versions have bells and whistles like flexible loading, extra flatware slots, and a stain-resistant stainless steel tub. First, settle on style. Your available space will dictate whether you choose a fold-down door unit or spring for a more compact drawer model. Of those, single-drawer units are ideal for small kitchens (and small families), while dual-drawer machines let you run each compartment independently — for instance, a short delicate cycle for stemware and a simultaneous power wash for pots. Next, factor in features. If you entertain a lot, you’ll want flexible loading. Look for adjustable racks, three racks instead of the usual two, and foldable tines that accommodate odd-shaped or oversized cookware. Controls may be traditional buttons or sleek touch screens, or they may be hidden altogether. It’s best, however, to select a model that has a visible cycle-time display so you’ll know if the machine is still running.

Selecting a range/oven

What’s cooking? Good question, as it may dictate your choice in range, oven, or cooktop. If you’ve got a small kitchen and are generally an “everyday” cook, a range — an all-in-one oven and stovetop unit available in standard cabinet size — typically makes the most sense. But if you’ve got more room, often whip up elaborate meals, or share the kitchen with another home cook, the flexibility of an in-counter cooktop and wall oven (single or double) might be the better choice. Still wishy-washy on what you want? Consider also:

• Budget. Though you can certainly drop a bundle on a professional style, ranges are usually the more affordable option, not to mention easier to install.
• Aesthetics. A hefty-looking range can function as a focal point for the room (especially if your kitchen lacks an island), yet some people prefer the streamlined look of built-ins.
• Ergonomics. A wall oven at eye and arm level suits folks with back or knee issues, eliminating the need to bend down to lift heavy pans.

The next big question is fuel source. Gas burners are known for even heating, while electric burners heat faster. An induction cooktop — an electric cooktop that relies on magnetic coils — is a pricier option that promises both quick and precise heating. Also worth considering is a convection oven, in which fans circulate hot air, resulting in more even heat distribution (a bonus for bakers). Finally, assess what additional features suit you. Do you need a variable broil setting? Touchpad or screen controls? Some designs even include the flexibility of a baking or warming drawer that lets you prepare items at different temperatures simultaneously. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.