My thoughts on Bank of America First Time Homebuyer 0% Down Program

Bank of America has launched a program geared to helping minorities get into Homeownership. The Community Affordable Loan Solution will be introduced in Black and Hispanic neighborhoods such as Miami, Los Angeles, Dallas, and Charlotte. Bank of America does plan to extend this program across the nation. However, I'm sure this depends on the selected cities not performing in a disastrous way. 
This program will allow First-time homebuyers to enter Homeownership with 0% down, no closing cost, and no mortgage insurance. Buyers can own their home and still enjoy no mortgage (the same benefits that folks who put 20% down on a home enjoy) makes this an intriguing program. Mortgage insurance comes out to about (1.25-1.75%) of the loan's balance and is commonly paid as part of the homeowner's monthly mortgage.

An innovative way this program works for lower-income communities is that it will be determined by the following: timely rent, utility bills, phone, and auto insurance to qualify, instead of the traditional way, which allows high credit holders to receive the best rates. Bank of America and HUD require occupants to go through a Homebuyer Certification course before the applicant submits their loan.
 
Is Bank of America 0% down a good deal for future Homeowners?
This is a great question; like all great questions, there are many ways to look at it. Here's what we know, the cheapest way to get into a home requires 3% down (not accounting for CalHFA loans which give borrowers loans and grants for their down payments/closing cost). So on the average home in California, a modest home can be sold for around $450,000, equating to $13,500. The great news about putting money down as a down payment is that this immediately allows the buyer to have equity in the home, making it an asset. Once the buyer has the down payment, they also should account for a closing cost of around 2.5% of the total home price. In the example of a home for sale at $450,000, the closing cost would be $11,250. In the example above, the first-time homeowner would have to pay $24,750 plus other fees to acquire their first home. 

I believe if a buyer has a stable job and wants to own instead of renting, this can be a solid option. Rent increases at the end of most leases. At least the new homeowner will have autonomy and the opportunity to gain EQUITY. Please let me know your thoughts about Bank of America's new program. Thank you for stopping by.

Love,

Sacramento Housing Update: Good News for Buyers and Sellers

https://www.youtube.com/watch?v=jSObrduWGk4

How to Avoid Capital Gains Tax

 Capital gains tax occurs when an owner of Real Estate sells their property for a gain. The owner will be subject to a 15% tax on their profit. For example: James buys a property for $250,000, after five years James investment property is up for sale for $400,000. In that five years James paid his mortgage down to $200,000. James now has about $200,000 of profit (before fees); if James chooses not to use a 1031 exchange with his investment property he would pay about $30,000 in Capital Gains Tax.

The process of the 1031 exchange begins before the sale of a investment property. Tax code 1031 allows for owner to roll over their profits from the sale of their real estate over to their next property, delaying payment of Capital gains. As an investor capital can be the difference between taking advantage of the next opportunity or not.

An investor has 45 days from the close of escrow of their last property to identify (3) homes to report to the Exchange company. The person using the 1031 exchange will need to close on a replacement property within 180 days from the close of their prior home. 

The 200% Rule: An investor can identify up to three properties that shouldn't add up to more than 2x the sale of their personal property. For example: Tonya recently sold her property for $200,000, she can identify three properties up to $400,000 and report them to the exchange company. If he closes on any of those three properties with 180 days, he can delay paying Capital Gains. 

I hope you've enjoyed this post, feel free to comment below. For anyone interested in being connected to an exchange company comment or message me. 

Love,

CalHFA: Forgivable Down Payment Assistance

What is CalHFA and how are they an advocate for first time homebuyers? 

Califonia Housing Finance Agency was created in 1975 and was created to meet the housing needs of people with low to moderate income. CalHFA offers a number of programs their latest offering maybe just what your looking for. 

Have you heard the latest from CalHFA? Their new program offers a 10% forgivable loan, interest free for first time homebuyers. In the Greater Sacramento area this can equate up to $50,000 that a buyer would be able to capitalize on. (CalHFA)

Lets point out a couple Qualifying Factors:

Recipients must be "first time homeowners", not literally, just not on anyone's title within the last year. 

Income Restrictions and lower DTI to use this product is that the persons income must be 80% or less than the areas median income. Future homeowners using this product should expect stricter DTI (Debt to income) requirements compared to FHA guidelines. (JVM Blog)

Purchase Price restriction? Future home owners shouldn't expect to pay over $550,000.

Borrower beware? The 10% down payment is forgivable but the loan cannot be refinanced, so if rates happen to drop lower borrowers will not be able take advantage of the lower rate. Nor shall they expect to sell the home in the first five years. 

In my opinion this CalHFA opportunity will assist many First time homeowners and it can rightfully be considered as free money towards a home. Having First time homeowers remain in a community for five years, could have a positive impact on the communities themselves. Most likely impacting communities that are most affordable to First time homeowners. One thing forsure is that this will make the housing market more competitive helping a generation of first time homebuyers reach their goal. 

If your interested in acquiring a home anywhere in California please let me know. 

Thank you,

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Latest Economic Outlook; Rates rise

Are you looking to stay ahead of the economic changes ahead? In this blog I will cover key points taken away from the Federal Reserve. The Federal Open Market Committee increased rates by .50%. 

What does this mean and why is this important? Financing instruments such as credit cards, car loans and other loan products will cost more to carry. On top of the recent rate hikes, the Federal reserve is expected to hike rates even higher in the near future. My suggestion is to eliminate debt as soon as possible if you'd like to avoid "a leaky purse". (Richest Man in Babylon)

The Federal reserve reported that import and exports will likely lessen in the future. To my understanding this will only add to the supply chain slowing down. I wonder to what extent products like gas, vehicles and cost of materials will be affected? 

Why is this important? Lower supply can often lead to items costing more. Other economic news shows that jobs have increased towards 1.7 million. Wages are reported to be rising fast and the price consumer index (consumption) is up 5%. The good news is we are living in a time period where unemployment is near a 50 year low.

Thank you for checking out my latest blog post. Feel free to comment below and add value to the post. 

Love, 

Laminate vs. Vinyl Planks

In residential homes common flooring options are laminate and vinyl planks. Laminate flooring has been around since the 70's. The core layer of laminate is made up of High density fiber board. Popular laminate flooring brands are (Pergo, Shaw, Mohawk, Armstrong and Tarkett). 

Vinyl Planks have been around since 1926, and is made up of Poly Chloride or PVC. Vinyl planks were made in America and was first created in Akron Ohio. Popular producers are Life Proof, Shaw Flooring, Mohawk and Cali. The thickness of the top layer will determine which setting is best for the Vinly plank. For example residential homes will need 12 Mil or thicker, and commercial spaces will need 28 mil or thicker. 

Lamite Flooring is made up of wood fiber, however Vinyl is plastic. Laminate flooring is less expensive and is thicker than Vinyl. Due to laminate flooring being thicker it can feel better standing on it compared to Vinyl. The price per Sqft for Laminate flooring is $2.69, as oppose to $3.29 for Vinyl. When applying laminate flooring it should be expected to sit for 48 hours to acclimate to the homes temperature.

To determine which grade of laminate is best for application a home supplier may reference what's called a  'AC rating'. For example, AC1 is best used for bedroom and guest rooms. AC2 moderate traffic, living room and dining rooms. AC3 should be used for heavy traffic such as entry way and AC4 light commercial traffic such as offices and cafes (Belinda Carr).

Luxury Vinly is more scratch proof then Laminate. Laminate flooring is best used with dry mop and Vinly can be used wet or dry. The durability of Laminate and Vinyl is 10-20 years. 

Do you prefer Laminate flooring or Vinyl planks?

Granite vs. Quartz Counter tops

Granite and Quartz are a common attraction amongst home buyers in today time. In my experience as a buyers agent a Kitchen has a huge impact on the buyers overall happiness with the home. In this blog post I will evaluate both Granite and Quartz counters. 

Granite can be identified by way of it's patterns. Granite is a igneous rock that is formed from Magna (think of lava). Granite comes from India, China, Brazil and Italy. Thanks to advancement in technology and Machines Granite is only a quarter of the price it once was in the 70's. 

Darker shades of Granite are commonly known as Ubatuba, Saint Cecilia, Blue pal and Black Galaxy. Granite is known to be more Pourous (Porous: having minute spaces or holes through which liquid or air may pass) because of the pourous attribute to granite wine can stain Granite. Five common ways Granite is commonly finished Bush Hammered, Flamed, Polished, Shot Blasted, Semi Blasted and Honed. Granite is known to be more heat resistant then Quartz. Granite price per sqft. is $60-200. Granite is more denser than Quartz; at 2.7-2.8 gm/cm3. However Quartz is less dense at 2.65 gm/cm3. Granite is Heat Resistant and Quartz isn't. 

Light Color Granite are known as Dallas White, White Ice, White Picasso and River White

Quartz is the second most adundant mineral in the Earths crust. Pure Quarts is translucent and impurities in Quartz will lead to color. The stone is grinded into fine powder, and mixed with resin powder to make Quartz Counter tops. Quartz is a man made product; however Quartzite is a natural stone that is more expensive. Companies that mass produce Quartz are Cambria and Cesarstone. Quartz Counter tops have less patterns compared to Granite Counter tops. Quartz counter top are uniform and lighter in color. 

Popular Quartz counter tops are Calacatta Nuvo, White Attica, Gray Legoon and Oceana. Quartz Finishes are Satin, Matte and High Gloss. Due to Quartz demand it has brought the price of granite down. Neither granite or quartz are scratch proof. 

Will you choose Granite or Quartz for your next home? 

How to buy your Future Home

Are you looking to acquire a home in the near future? Awesome, I hope to share some valuable information with you in this post. First thing first! Have a source of steady income. Homeownership is a wonderful deal but it can be costly. A home may need repairs shortly after acquiring it so its good to have that buffer to ease any unexpected expenses.

Find a lender that you trust. The lender will want you to have a source of income, they'll want to see tax returns to determine how much of a mortgage you can afford. Most lender want your debt to income to be around 43%. So if you make $5,000 and you wanted a home with a monthly mortgage of $2,000 there's a good chance you'll be able to move forward with aqcuiring that home pending your credit score. 

Popular Loan types: FHA and Conventional. FHA is a govenment insured loan that requires future homeowners to put 3.5% down to buy a home. FHA has morgage insurance attached to loan for the life of it, this can be an additional $200-$300 on top of the mortgage. A buyer can refinance out of this loan after a year. Conventional loans vary in down payment, they can be as low as 3%. With a conventional loan a buyer can remove their Mortgage insurance after 20 equity has established relative to the homes value. Once your ready to buy a home, it's good to have a understanding of where the market is in terms of a buyers and sellers market. Realtors often refer to month of inventory, which is a guage for supply and demand. A normal real estate market has about 3-6 months of inventory. 

Now that your ready to go shopping for a new home consult with a realtor to get you caught up with the current market and the landscape of the area your looking in. This is the time to get your expectations in line with theirs because the two of you will make the dream team.  

If your in a competitive market expect submitting more than one offer. Keep going until you find the right seller who appreciated your offer. In a competitive market for homes you can expect bidding above list price. If this sustains in your neighborhood you can expect to have an increase in home value when you do go to sale. 

Changing World Order

 Ray Dalio’s book “Principles for the Changing World Order” did a great job relaying the necessary context or empires. Ray Dalio give us examples of Empires that established capital markets; the Dutch empire. The Dutch were the first to have Capital markets. This allowed them to become prosperous. 

The United States is a world power and has been for the last 200 hundred years. Ray Dalio’s stats show that the United States is on the decline compared to the rising power or China. China has four times the amount of the population of United States, and has increased their GDP/living standards exponentially. 

History has shown that when an empire is challenged by another rising empire it can lead to a war. Dalio, one of the most successful hedge fund mangers ever believes it's a 35% chance that the United States enters a war. Political context within the empire can add to a empire’s devise (Which I doubt will happen to USA). Dalio sights that political differences are greater than ever. Dalio points out that the next war will be over technology and can be more deadly than ever due to the technilofical advances. 

Dalio goes in depth to how China is different from the United States. China embodies a top down approach. Meaning leaders can decide what the general populist can watch, games children play and civilian ideologies. Contrary to China; the American dream allows for the citizens to think freely and individualistically. Unfornately, it isn't working very well for us economically. 

The Billonaire hedge fund manager or Bridgewater recommends that people have a well balanced portfolio to weather financial storms that awaits us. 

Since, I've read Ray Dalio's master piece the Changing World Order its become apparent that productivity is everything and that the country is in debt. We each must do are part to produce and pay off our debts. The US has a advantage being the Worlds currency. If the US loses that advantage it would be a shift that has'nt happen in 250 years. 

Thank you, Stay Healthy!

Economic State of America

 Hi, first and foremost thank you for taking the time to trust me to deliver information that I believe can be valuable to us all. 

Coming out of the Pandemic I've been looking out for information that can help guide our day to day choices and investment decisions. One of the most informative finding is from the Federal Reserve. For those of us who don't know what the feds do I can sum it up to this: make sure that the economy of America is Healthy & Viable.

The Feds have two Mandates: Maximum employment and Stable prices of goods, commodities and services (Economics). Before the Pandemic America was doing fine on a growth trend that stood for nearly a decade. As it stands now post pandemic, we are on a recovery stage from a Supply standpoint. Have you noticed any changes at the grocery store? Maybe Eggs, bacon and Gas prices increasing? If you have noticed any changes then guess what? You have an eye for INFLATION. Here's some raw numbers to give you an idea of what we're going through Gas is 56%, Bacon is up 13% and used Cars are up 30%. On average we're at about 5% inflation all around. Normally the economy function at about 2% inflation rate, which the feds hope to guide us back to once factors such as employment, economic spending and vaccination increases. 

Inflation is important because its directly tied to the cost of everyday living for you and I. This inflation is not forseen to be sustainable but one should adjust accordingly to the present day reality.

I'm a Realtor! If anyone didn't know that by now. We're seeing a lack of homes for sale on the market AKA better know as (Inventory). Many homes recieve a good amount of attention. Therefore prices are steadily increasing, since last year the Sacramento real estate market has increase substantially.

I agree with the Federal Reserve Jerome Powell statement: "The Housing Market is Strong", prices may stable out as economic factors adjust but demand hasn't shown any reconciliation of slowing down.

VIDEO SUMMARIZATION BELOW

https://youtu.be/qmjDZZoeGVw

Please comment below. The engagement will be appreciated.

Student Loans Debt and Homeownership

Hi. Like most people, I didn't have money saved for college and it took me until the end of my college experience to actually start paying back my student loans. I graduated with about $64,000 in student loan debt. Ouch! Is the appropriate term. I would advise anyone who is looking to get a college education to not make a costly decision as I did. Here's why; not only is that an insane amount of debt but student loan debt whether it's through the department of education or a Federal Perkins loan provided through the school - it accrues interest. Starting at 2.75% ranging all the way up to 5% if it's a Federal Perkins loan.

When it's all said in done because of interest a borrower may end up paying an additional $20,000-$30,000  in interest (interest - Debt accrued on top of debt for a duration of money lent) in addition to the original $64,000 taken out in student loan debt. Interest is and will always be an enemy of mine
. I don't want you to be in bondage to it either. It's a huge detriment to paying back any type of loan. It basically works against you diminishing the hard earn money that you've scheduled to go towards the principal.  There's usually some type of interest whenever you borrow money. Which makes sense from a lender's standpoint. The risk of not being paid and the generosity comes with terms and conditions. 

Here's my game plan to fight this mess I've made throughout my 4.5 years in Private college. I've place a time that I would like to be completely out of debt. For me, it was no later than 2023. That would put me at about 28 years old. Since I've made that decision and grasp that the less I pay towards my student loans, the more I actually pay for them in the long run. I've decided to pay more, happily! In the past year, nearly 75% of my income has gone towards my student loans. I couldn't pass up on the no-interest compounding due to pandemic. This has allowed more of my hard-earned money to go towards the principal of the loan. Allowing me to pay the loan off faster. In the last year, I've paid off $30,000 worth of student loans. My goal is to now be completely out of student loan debt by next year. I'm paying as much as possible while the interest payments are suspended. Saving me thousands in the long run.

How's the Sacramento Real Estate Market?

 Hi, I wanted to take some time to do an overview of Sacramento's real estate market. Sales have declined by 1.1% from the previous month. In comparison to last year sales are up 8.8%. Homes financed with Cash made up 9.5% of the market. Those stats slightly debunking the bay area myth, I say slightly because there's a good chance the buyer from the bay used cash mixed with a conventional loan to complete the purchase. Speaking of conventional loans, 68% of the buyers market in Sacramento are financing their purchase with an Conventional loan. Folling with FHA at 15% and VA making up 1.8%.

Prices continue to rise. The median home price went from $438,000 to $439,950, an increase from .4%. In comparison to 2019, home prices have increased by 14.3%. Supply and demand is the cause of the continuing rise of home prices. Inventory, the amount of homes for sale have decreased .3%. In comparison to 2019, there is a decrease of 45% of homes available for purchase. In other words there are 1,048 less homes for sales than it was this time last year. California gold rush has been reborn in Real Estate. 

The average days on market for homes listed has decreased from 18 days to 15 days. Of the total 1,695 sales completed during the month, 1,463 were on the market for 30 days or less.  95% of the homes sold 60 days or less. If your looking to buy a home you would have more options if you're looking below $200,000 or on the contrary above $750,000. If you or anyone you know are interested in selling they're home now would be a great time. Just make sure they contact me (916) 968-7159. 

Best,

Tavon Willis

DRE #02095751

tavon@allcityhomes.com

(Source: Sacramento Association of Realtors)

Fear is Fuel

Fear, that ol' feeling that gives butterflies and causes you to sweat profusely. I'm looking to overcome, conqueror, or better yet use fear as an indicator to better my life. Fear comes from survival mechanisms that we were born with. Today our chances of being eaten by a predator as compared to when we were being preyed upon are much less likely to happen. Today we live in a safer environment, and Fear can be counterproductive to our goals. Yet, we still get nervous when we meet new people when there's a new adventure that awaits us or not knowing what the future holds for us. Fear as I come to realize maybe the most important thing to conquer in one's life. The Buddha says 'all of life is suffering", most people are causing their own internal suffering due to external influences that they cannot control.

I'm looking to use Fear as Fuel as indicated in the book written by Patrick Sweeney. Fear often points out the things which we need to take action towards. I've been putting off making a tough visit for about a week now. Not sure of what the outcome will be or if there will be danger being associated with it. Guess what, my body is telling me I need to handle that situation now or simply forget about it. I'm going to change my association with FEAR, I will turn it into arousal. Once fear is transformed from something that is associated with not knowingness or pain it can be used as an indicator for EXCITEMENT. 

It's a new life, a bold one that awaits you and I if we cultivate courage, love, and proper context. The only thoughts we produce should be that of action, solving what needs to solve, and planning what needs to be planned. If we leave it to our mind to solve it will result in saving us energy and protecting us from harm. The main problem with this solution is that it can cause us to lose sleep, stopping our immune system from recovering which weakens our defense to fight viruses or be at our best to provide value.

I've always respected those who've cultivated fearlessness, I think it's time to transcend to a human being who is just 'being'.