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December Journal 2021

Buying a New Home? Here Are Some Tips

Finding that dream home is an exciting undertaking. You're viewing multiple places that have the amenities you've been looking for for months. And now, you think you've found the one. In addition to all those dreamy details, what else should you and your agent discuss? Here are three questions to ask1:

  1. Is it properly ventilated? Look for condensation on windows and inspect doors. Also, check windows and vents for bubbled or peeling paint. These are clues that moisture may be trapped in the walls or ceiling.
  2. What's That Smell? You can often smell water damage long after the standing water evaporates. Check walls and ceilings for water lines, especially in unfinished basements. Rust, water stains, or leaks in exposed pipes can also indicate past issues.
  3. Where's the Love? Some things -- like burned-out lightbulbs or faded paint -- may seem small but can indicate previous homeowners have ignored routine home maintenance. But, your home inspection should reveal any potential future issues before you buy.


Using a Home Equity Loan for a Second Home

Most people think of a home equity loan as a means to finance a remodel or make improvements to increase a home's value. But did you know you can also use a home equity loan to buy a second home or investment property?

Using a home equity loan allows you to increase your down payment and avoid more stringent loan requirements. And since the loan's collateral is your current home, you may be able to take advantage of lower interest rates.

Be sure to discuss your goals with your lender, banker, or financial advisor to determine if a home equity loan is right for you.2


Retail Sales on the Rise

Inflation might be at a 30-year high, but Americans are spending as we head into the holiday season. Retail sales in the U.S. rose by 1.7% in October, suggesting that the economy could end the year on a high note.

What are consumers buying? Electronics, appliance, grocery, and hardware stores reported large gains, while gas stations and auto dealerships also fared well.3


Understanding Deferred Maintenance

The phrase "deferred maintenance" on an appraisal report can bring your loan application to a screeching halt. This vague-sounding phrase generally means the appraiser has found a few issues that need attention: cracked or broken windows, stained carpets, sagging porches, etc.

While some sellers will adjust the sales price, many lenders won't release the loan until the items are fixed. Once they are, a lender will schedule a second inspection to verify the repairs were made and approve the loan to move to the next step.4


Do Rising Prices Mean Higher Taxes?

Could rising inflation increase your tax bill? Maybe. The IRS has increased tax brackets for 2022, raising the income limits within each bracket but keeping the nominal rate for the highest earners at 37%.

The changes come following an October report showing that inflation spiked 6.2% over the previous year, the biggest jump in 30 years. Other tax code changes include increased standard deductions, 401(k) contribution limits, and gift limits.5


Rental Properties are Heating Up the Industry

It's a great time to buy a rental property: Owners of single-family rental homes experienced a 10.2% growth in rental prices from October 2020 to October 2021. Properties are staying full, with vacancy rates hovering near 25-year lows in the third quarter.

The biggest challenge for would-be landlords? Finding properties to purchase. Rental property inventory is down, and demand remains high as renters search for more space to spread out.6




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