Category Archives for "First Time Home Buyers"

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4 Reasons to Buy A Home This Winter!

4 Reasons to Buy A Home This Winter! | Simplifying The Market

Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Insight report revealed that home prices have appreciated by 5.6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.7% over the next year.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase 

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have hovered around 4.8%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase in 2019.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You are Paying a Mortgage

There are some renters who have not yet purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person building that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on With Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

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Home Prices Up 6.34% Across the Country! [INFOGRAPHIC]

Home Prices Up 6.34% Across the Country! [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
  • In the report, home prices are compared both regionally and by state.
  • Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!

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Buyers: Don’t Be Surprised by Closing Costs!

Buyers: Don’t Be Surprised by Closing Costs! | Simplifying The Market

Many homebuyers think that saving for their down payment is enough to buy the house of their dreams, but what about the closing costs that are required to obtain a mortgage?

By law, a homebuyer will receive a loan estimate from their lender 3 days after submitting their loan application and they should receive a closing disclosure 3 days before the scheduled closing on their home. The closing disclosure includes final details about the loan and the closing costs.

But what are closing costs anyway?

According to Trulia:

Closing costs are lender and third-party fees paid at the closing of a real estate transaction, and they can be financed as part of the deal or be paid upfront. They range from 2% to 5% of the purchase price of a home. (For those who buy a $150,000 home, for example, that would amount to between $3,000 and $7,500 in closing fees.)”

Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. As mentioned before,

Closing costs are typically between 2% and 5% of your purchase price.

Trulia continues to give great advice, saying that:

“…understanding and educating yourself about these costs before settlement day arrives might help you avoid any headaches at the end of the deal.”

Bottom Line

Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

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Will Your Side Hustle Buy You a House This Year?

Will Your Side Hustle Buy You a House This Year? | Simplifying The Market

The top concern for most first-time home buyers is their ability to save for a down payment. According to a new survey, 36% of millennials took on a second job to make their dreams of homeownership a reality in 2017. 

Among millennials with incomes over $100,000 a year, the top ways to come up with the necessary funds were to sell stocks (20%) or to sell cryptocurrency (16%).

The most popular method of savings was the most traditional; 60% of those saving for a down payment used a percentage of their paychecks to achieve their goal, while 75% of those with salaries over $100k were able to save this way.

For those who have not yet begun to save for their down payment, 32% plan on pursuing additional employment, while 15% plan on driving for a ride-share service as their second job.

Many first-time buyers are mistaken about the down payment needed in today’s real estate market. In fact,

“In a 2017 survey, 68% of renters cited saving for a down payment as an obstacle to homeownership. Thirty-nine percent of renters believe that more than 20% is needed for a down payment and many renters are unaware of low-down payment programs.”

The many benefits of homeownership make the extra jobs, sacrificing new clothes, or skipping vacations well worth it.

Bottom Line

If you have been saving for your down payment for a while now and are curious how much further you have to go, let’s get together to help you determine what priced home you can afford and what size down payment you’ll need.

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Females Are Making It a Priority to Invest in Real Estate!

Females Are Making It a Priority to Invest in Real Estate! | Simplifying The Market

Everyone wants a place to call home; a place that gives them a sense of security. We are currently seeing major interest from females who want to achieve this dream, and the numbers are proving it!

In 2018, for the second year in a row, single female buyers accounted for 18% of all buyers. In 2017, 60% of millennial women listed as the primary borrowers on mortgages were single.

According to the 2018 Home Buyer and Seller Generational Trends Report by the National Association of Realtors, one in five homebuyers in the U.S. were single females (most of them part of the baby boomer generation) as you can see in the graph below:

Females Are Making It a Priority to Invest in Real Estate! | Simplifying The Market

This does not come as a surprise since 50.8% of the U.S. population is female and 15.6% of them are 65 years and over, according to the Census Bureau.

What are the reasons for this demographic’s booming interest in homeownership?

Bankrate published an article with what they believe to be some of the reasons:

  • Divorce rate: Known as the “Gray Divorce,” the divorce rate has doubled for those ages 50 and over and tripled for those ages 65 and over.
  • Average life expectancy: For women it’s 81, four years longer than men.
  • To build home equity: Women want to build equity through their home. As mentioned by Bankrate, “some are hoping to escape rising rents, some might be downsizing or looking for a new start,” especially those going through a gray divorce.

Are they only downsizing and buying small homes?

Not really; The Institute of Luxury Home Marketing recently stated that:

The number of female billionaires grew faster globally in 2017 than the number of male billionaires. This redistribution of wealth has seen an impact on luxury real estate both in its purchase and design attributes – and obviously, this is important for realtors to recognize when relating to their clients.”

Bottom Line

Whether you are a millennial who wants to buy a starter home, a billionaire looking for that luxury home you’ve always wanted, or maybe even someone who just went through a gray divorce, let’s get together to help you create your real estate portfolio so that you can start investing your money in real estate today!

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The Cost of Renting vs. Buying a Home [INFOGRAPHIC]

The Cost of Renting vs. Buying a Home [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Historically, the choice between renting or buying a home has been a tough decision.
  • Looking at the percentage of income needed to rent a median-priced home today (28.4%) vs. the percentage needed to buy a median-priced home (17.5%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!

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Wage Increases Make Home Buying More Affordable

Wage Increases Make Home Buying More Affordable | Simplifying The Market

Everyone knows that housing affordability has been negatively impacted by rising prices and increasing mortgage rates, but there is another piece to the affordability equation – wages.

How much a family earns obviously impacts how easy or difficult it is for them to afford to own a home. Because of an improving economy, wages are finally beginning to increase – and that dramatically affects home affordability.

According to the National Association of Realtors’ (NAR) September 2018 Housing Affordability Index, wages have increased in every region of the country:

Wage Increases Make Home Buying More Affordable | Simplifying The Market

After applying current salaries, home prices, and mortgage rates to their Home Affordability Index equation, the index, though still lower than this time last year (160.1 to 146.7), increased over the last month (141.2 to 146.7). For the complete methodology used by NAR, click here.

The percentage of income needed to own a home has also decreased each of the last three months. It currently sits at 17% which is substantially lower than historic numbers.

Wage Increases Make Home Buying More Affordable | Simplifying The Market

Bottom Line

If you are a first-time buyer or a move-up buyer who believes that purchasing a home is not within your budget, let’s get together to determine if that is still true.

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VA Home Loans by the Numbers [INFOGRAPHIC]

VA Home Loans by the Numbers [INFOGRAPHIC] | Simplifying The Market

VA Home Loans by the Numbers [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • The Veterans Administration (VA) Home Loan is a benefit that is available to more than 22 million veterans & 2 million active duty service members which helps them achieve their dreams of homeownership.
  • In 2017, $189 billion was loaned to veterans and their families through the program.
  • VA Purchase Loans are on the rise in 46 out of 50 states and Washington, DC.

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75% of Renters Have Been Misinformed

75% of Renters Have Been Misinformed | Simplifying The Market

Recently, multiple headlines have been written asserting that homeownership is less affordable today than at any other time in the last decade. Though the headlines are accurate, they lack context and lead too many Americans to believe that they can’t partake in a major part of the American Dream – owning a home.

In 2008, the housing market crashed and home values fell by as much as 60% in certain markets. This was the major trigger to the Great Recession we experienced from 2008 to 2010. To come back from that recession, mortgage interest rates were pushed down to levels that were never seen before.

For the last ten years, you could purchase a home at a dramatically discounted price and attain a mortgage at a historically low mortgage rate.

Affordability skyrocketed.

Now that home values have returned to where they should be, and mortgage rates are beginning to increase, it is less affordable to own a home than it was over the last ten years.

However, what is not being reported is that it is MORE AFFORDABLE to own a home today than at any other time since 1985 (when data was first collected on this point).

If you take out the years after the crash, affordability today is greater than it has been at almost any time in American history.

This has not been adequately reported which has led to many Americans believing that they cannot currently afford a home.

As an example, the latest edition of Freddie Mac’s Research: Profile of Today’s Renter reveals that 75% of renters now believe it is more affordable to rent than to own their own homes. This percentage is the highest ever recorded. The challenge is that this belief is incorrect. Study after study has proven that in today’s market, it is less expensive to own a home than it is to rent a home in the United States.

Thankfully, some are starting to see this situation and accurately report on it. The National Association of Realtors, in their 2019 Housing Forecast, mentions this concern:

“While the U.S. is experiencing historically normal levels of affordability, potential buyers may be staying out of the market because of perceived problems with affordability.”

Bottom Line

If you are one of the many renters who would like to own their own homes, let’s get together to find out if homeownership is affordable for you right now.

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5 Tips When Buying a Newly Constructed Home

5 Tips When Buying a Newly Constructed Home | Simplifying The Market

The lack of existing inventory for sale has forced many homebuyers to begin looking at new construction. When you buy a newly constructed home instead of an existing home, there are many extra steps that must take place.

To ensure a hassle-free process, here are 5 tips to keep in mind if you are considering new construction:

1. Hire an Inspector

Despite the fact that builders must comply with town and city regulations, a home inspector will have your best interests in mind! When buying new construction, you will have between 1-3 inspections, depending on your preference (the foundation inspection, the pre-drywall inspection, and a final inspection).

These inspections are important because the inspector will often notice something that the builder missed. If possible, attend the inspection so that you can ask questions about your new home and make sure the builder fixes any problems found by the inspector.

2. Maintain good communication with your builder

Starting with the pre-construction meeting (where you will go over all the details of your home with your project manager), establish a line of communication. For example, will the builder email you every Friday with progress updates? If you are an out-of-state buyer, will you receive weekly pictures of the progress via email? Can you call the builder and if so, how often? How often can you visit the site?

3. Look for builder’s incentives

The good thing about buying a new home is that you can add the countertop you need, the mudroom you want, or an extra porch off the back of your home! However, there is always a price for such additions, and they add up quickly!

Some builders offer incentives that can help reduce the amount you spend on your home. Do your homework and see what sort of incentives the builders in your area are offering.

4. Schedule extra time into the process

There are many things that can impact the progress on your home. One of these things is the weather, especially if you are building in the fall and winter. Rain can delay the pouring of a foundation as well as other necessary steps at the beginning of construction, while snow can freeze pipes and slow your timeline.

Most builders already have a one-to-two-week buffer added into their timelines, but if you are also in the process of selling your current home, you must keep that in mind! Nobody wants to be between homes for a couple of weeks.

5. Visit the site often

As we mentioned earlier, be sure to schedule time with your project manager at least once a week to see the progress on your home. It’s easy for someone who is not there all the time to notice little details that the builder may have forgotten or overlooked. Additionally, don’t forget to take pictures! You might need them later to see exactly where that pipe is or where those electrical connections are once they’re covered up with drywall!

Bottom Line

Watching your home come to life is a wonderful experience that can sometimes come with hassles. To avoid some of these headaches, keep these tips in mind!

If you are ready to put your current home on the market and find out what new construction is available in your area, let’s get together to discuss your options!

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