The Federal Housing Finance Agency (FHFA) recently announced that it will raise loan limits for mortgages backed by Fannie Mae and Freddie Mac, giving many homebuyers greater purchasing power. Starting in 2021, the maximum conforming loan limit for single-unit properties will increase to $548,250 – a 7.4% increase from the current limit of $510,400.
The announcement is positive news for homebuyers, who will have the opportunity to borrow more money under conforming loan guidelines in addition to taking advantage of record low mortgage rates. Any loan amount above the conforming limit is considered a jumbo loan. Jumbo loans generally have more stringent requirements and tends to carry higher interest rates.
The exact conforming loan limit varies geographically, and while it will increase to $548,250 throughout most of the country including Illinois, Michigan, Indiana, and Wisconsin, it will be higher in more expensive markets such as areas in California and New York. Raised limits reflect rising home prices throughout the U.S. including Chicagoland, where prices are appreciating after remaining relatively flat over the last few years.
How does this affect you?
Connect with a lender to find out! But as a general rule, most experts say that your housing expenses should not exceed 28 percent of your gross monthly income, but a variety of factors – from your credit score to other debt – can open this ratio up to a pretty wide range. Remember that there are other costs involved in buying a home outside of the down payment, such as closing costs, moving, decorating, and remodeling expenses. You should also consult with your accountant or financial advisor to talk about how real estate affects your financial goals. While these new loan limits greatly help buyers, knowing the bottom line is essential. Some lenders I HIGHLY recommend:
Now that you know my top 14 tips to make moving day a breeze.. you are ready to go shopping & prepare for the big move! If you are like me.. you have mixed emotions about moving day. I will say I do always love getting the chance to audit my stuff, organize it all, & get creative in styling my new home. However the stress of the move, the physical labor of it all, & the looming hours of unpacking ahead can be daunting… but it doesn’t need to be.
As a REALTOR who has helped 100’s of clients move & as someone who has moved 4 times in the last 6 years (the curse of being a real estate broker & finding the coolest homes is you want to move into them all..) I consider myself a moving expert. Whether it’s a rental, you’ve purchased your first home, or your 10th home; you will absolutely need everything below & will thank yourself later for having it organized & ready to go! As we know, I prioritize convenience so below are directs links to amazon for all of my moving day must haves – ‘add to cart’ & get it delivered right to your doorstep, couldn’t be easier!
Cleaning Supplies: I cannot stress this enough, clean your house from top to bottom BEFORE moving in. While we hope the previous owners or landlords would have the courtesy to leave the home clean, that isn’t always the case. Be prepared to make your new space sparkle & start out this next chapter on the right page. The below products are absolutely necessary with the most important products first. Do not move into your new home without these!!
Multi-purpose cleaning spray and bleach wipes to sanitize & disinfect all surfaces. Tip: First thing to do when you arrive is clean the inside of the fridge/freezer with bleach but be sure to unplug the refrigerator & freezer prior to cleaning, prop the doors open to air out
Handheld vacuum for baseboards, vents, cupboards, etc. Tip: Clean literally from Top to Bottom in every room to catch all of the dust, dirt, etc. Finish with the floors once you are all moved in!
First Day & Night Bag: YOU DID IT, YOU ARE READY FOR MOVING DAY!! or are you.. The last thing you want to do now is search for your pillow case, tooth brush, & pajamas. Make sure you pack an ‘overnight’ or weekend bag with all of your necessities so you aren’t scrambling to find what you need.
Anything you’d take for a weekend getaway including pajamas + additional clothes, toiletries, etc.
Reusable water bottle
First aid kit + prescriptions
Paper plates, cups, flatware for easy dining & clean up
Bath towels + shower curtain if applicable
Diffuser & essential oils because some aromatherapy is needed after this stressful day #calm #chill #restore
Moving day can be a stressful, emotional, and an overwhelming experience; but it doesn’t have to be! As a REALTOR who has helped 100’s of clients move & as someone who has moved 4 times in the last 6 years (the curse of being a real estate broker & finding the coolest homes is you want to move into them all..) I consider myself a moving expert. Below are my 14 Easy Tips to Make Moving Day a Breeze.
1. Schedule Movers & Packers
One of my biggest tips to is hire packers, lifters, & movers. Many companies are a one stop shop, but if you aren’t interested in all of it you can always just pick one of these services to make your life easier! If you are planning to hire movers I recommend booking them about 6 weeks in advance. Not everyone has the financial freedom to hire full service help, but I will say hiring packers is a game changer if you are short on time, not only for productivity but also organization. Whether you hire help or just recruit friends & family, my tips below will surely help you stay organized & efficient. If you do have helpful friends & fam… make sure to order pizza & buy some beverages – then you can technically call it a party!
2. Create a Timeline + Game Plan
1 month before the big move you want to start preparing by creating a game plan & timeline. Create a check-list & mount it on the fridge so it stays top of mind & you can remind yourself of important dates. Plan to start packing about 10 days before the move, stop buying groceries a week before, defrost the freezer 48 hours before moving, & prep coolers for food storage in the interim.
3. Get Moving Supplies
I always recommend starting to pack 10 days in advance. You still want to enjoy your home while you have it, but that 10 day window provides enough time to get everything done. Uhaul has the best wardrobe boxes & home depot has the best priced various size boxes. Heavy items in small boxes, light items in large boxes. Utilize luggage for books, shoes, & heavy non-fragile items. My post on Moving Day MUST HAVEs gives an all encompassing shopping list of suggested moving items.
4. Plan Out your New Space
If you read nothing else, please be sure to read these next 2 tips as they are my best tips of ALL – Create a floor plan of your new home & print a copy for every room, emailing a copy to yourself just in case (this is a good website to create one if you’re a perfectionist like me). Designate a color for each room on the floor plan creating a master guide for all of the boxes & items you are about to pack. This will help before the move as you can organize your space thoroughly and completely when packing, in turn making unpacking a breeze! If there are miscellaneous items that don’t technically have a room, designate an area on the floor plan to put those items so you know exactly where they are.
5. Color Coordinate (DO NOT SKIP THIS!) seriously, these are a game changer..
In conjunction with the floor plan, color coordinate the boxes with their respective rooms so movers, helpers, & you know exactly where to put boxes amidst the moving chaos. If you want to get real granular (I know I do!!) number each box & notate items inside on a spreadsheet; especially great when doing a cross country move as you’ll know exactly how many boxes you should have & you can look directly for kitchen box #17 when searching for your wine glasses instead of opening everyyyy box.
The beauty of moving is getting reacquainted with all of your belongings as you lovingly pack them up. Did you know you had this much stuff?? Do you still need that T-Shirt from high school.. Take this time to audit your items, declutter, & whatever you haven’t used in years or don’t bring you JOY.. donate! Put a donate box & bag in every room to easily organize.
7. Pick the Day
I always suggest my clients try to avoid moving in as soon as you get keys. Sometimes there is no other option, but it you can build in a day between key pick up & move in.. I would highly suggest it! Why? Because not everyone has the same version of clean so you will want to schedule in some time to clean or even better hire cleaners! New home cleaning services can be fairly reasonable & will save you the stress. If you do have to move in as you get keys, clean room by room & move in accordingly.
8. Put Together a Cleaning Kit
As mentioned above, always schedule some time before the big move to clean your new space! Get a cleaning supply kit ready to go to bring with you & get cleaning! My post on Moving Day MUST HAVE’s highlights my favorite cleaning supplies & tips – Protip: get it all delivered to your new home or get it delivered to your current home a few days before the move, keep it all in the box, & bring with on move in day!
9. Pack Weekend Bag/Important Things Box
YOU DID IT! But the last thing you want to do now is search for your pillow case, tooth brush, & pajamas. Make sure you pack an ‘overnight’ or weekend bag with all of your necessities so you aren’t scrambling to find what you need. Additionally, pack important documents, birth certificates, ID’s, jewelry, etc. in a box for you to move yourself. More tips here.
10. Map it Out
Print out your preferred route for the moving team so there is no confusion on routes. Movers are notorious for going rouge on their routes as they get paid by the hour, but helpers & friends can sometimes get lost too. Make it easy for everyone by giving them a map.
11. Disconnect & Set up New Utility Services
I recommend scheduling new utility service 2 weeks before & setting up for the day before move in or the morning of at the latest. Disconnect your existing services at the same time for the evening of moving day.
12. Change address
One week before your move change your address with USPS, insurance providers, cell/internet provider, health care services, employers, school, etc.
13. Confirm move in details
Confirm with movers, helpers, packers, & building (if applicable) all of your moving day details to avoid any hiccups!
Make sure to take some photos in front of your old home for the memory box & snap some shots in front of you new one!
That’s it – You are ready for the move! That was pretty easy, wasn’t it? Now just be sure to remind yourself to relax as much as possible & it will all be over soon 🙂 If you have any other amazing tips be sure to share & I will add to the list!
**2020 COVID BONUS TIP: Since sanitization is at the top of our minds, it’s smart to confine items to the garage or one room of your home and then be sure to disinfect and wipe everything down. If you used a moving company or had helpers, be safe & wait at least 24 hours to open your boxes!
Now that we know all the steps of a home purchase & have the terms down, let’s talk about taxes. While taxes may be the last thing on your mind as you advance through the home buying process. Yet, there are important tax considerations that need to be worked out before you get to the closing table. This post will tell you what you need to know about tax proration.
Property tax proration is a way to split property taxes fairly to ensure that each side is paying for the specific time that they were owners of the property. Since Illinois property taxes are paid in arrears, tax proration ensures that the buyer is fairly compensated for the tax bills they will receive after the closing, for the period in time in which the seller still owned the property.
Your real estate broker can help you better understand what tax proration is, how it works, and how it is calculated. Once you have a home under contract, your real estate attorney will work with the seller’s attorney to determine the exact amount due to you during the attorney review process.
Below are six facts about the tax proration process. When you reach this stage, your real estate attorney will guide you along with the help of your real estate broker.
Sellers will take responsibility for the property taxes up until the day the property is officially closed. The buyer takes on the property taxes from the day the purchase is final.
Tax proration may be a large dollar amount on the closing statement, because it is prorated to the day of close.
The real estate attorney and/or broker can check the county assessor’s website to determine any exemptions or freezes and anticipate changes to the tax bill. Also, always be sure to file for your homeowners exemption after closing!
With new construction or rehab properties, there is special attention that needs to be paid to the real estate tax credits and prorations. This is because the property upon which the listed taxes are based is no longer the same property that is now being assessed as rehabbed or new.
Unlike paying your rent or mortgage on the 1st of every month, 2019 property taxes are paid in 2020 so therefore taxes are prorated at a slightly higher amount because taxes will likely go up.
An escrow account is used in cases where the parties are not certain of the anticipated change in the real estate taxes and cannot agree to a final credit until the bills come out. The seller sets money aside in the escrow account and those funds are issued once the tax bill arrives.
Whether you’re a buyer or seller, it’s important to understand tax proration so that when you arrive on closing day, you’ll feel fully informed and prepared. Be sure to consult your real estate broker as early as possible in the homebuying process so you are comfortable with all of the steps to come!
In Chicago, specifically referencing Cook County, property taxes rose in 2018 & everyone is left wondering – What now?
This year, 2018, was a reassessment year for all of Chicago, so homeowners & hopeful homeowners will receive increases – for example, I had clients who’s taxes went up a shocking 83%.
So, as a Seller, should you lower your asking price because of rising taxes? As a Buyer, should you low ball the Seller & justify your offer price due to the anticipated tax increase?
My opinion to both of those questions is: No.
This past Spring & Summer we were in a Seller’s market, so the chances of Seller’s having the hindsight to adjust their asking price to outweigh the impending tax burden were slim to none. While the market is starting to stabilize into the Fall, I still advice my Buyers against submitting offers asking for a significant tax proration, due to the lack of inventory the ball was still in the Seller’s court so we need to be reasonable, but definitely take the impending tax hike into account.*
While this tax bill hit everyone with some ‘sticker shock’, we need to recognize that the previous reassessment figures sent out in the 2015 Triennial were based on 2012-2013-2014. 2012-2013 was coming off the worst real estate crash since the Great Depression, so those previous assessed values were low – because the market was artificially low.
My best advice is ALWAYS do your due diligence, talk with your Broker & Attorney on the anticipated increase & be sure to understand how it will affect your bottom line. Be aware of exemptions that may alleviate the tax burden & be explicit with your questions so you are fully aware of what you are committing to with the sale or purchase of your home. Communication is key.
The good news, if you did purchase or are currently an owner in Cook county, you can appeal & most homeowners appealing to the Assessor’s Office do not use an attorney. 51% of residential appeals to the Assessor’s Office are successful; the amount of reduction varies, however. If you are looking for more guidance I do know a great tax appeal attorney – so reach out to me to discuss your options.
If you’re appealing your property taxes:
Someone appealing does NOT have to (do) the work. The assessor’s office will look up comparable properties for them. If someone wants to submit their own list of comparables, that is, of course, fine. We just make it clear that appellants don’t have to worry about how “long” it’ll take to file an appeal. It is a one-sided form which takes approximately five minutes.
Appeals are for the purpose of reducing the Assessor’s valuation of a property. They do not automatically reduce a future tax bill. Dollar amounts of tax bills are decided by the tax rates and levies in individual communities (school districts, etc.). Most property tax revenue goes to public schools.
If someone “loses” an appeal and does not receive a reduction, their assessed value will NOT go up. It stays the same for the three years between triennials (unless they appeal the following year and win).
If you are successful in one of your appeals, the reduction will be reflected on the second-installment tax bills to be mailed in the summer of 2019.