Are you ready to start the journey of homeownership? As you start this journey, you will create saving goals for your down payment and closing costs. But do you know how much you actually need for your down payment?

Freddie Mac states that “the most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

Generally speaking, you will need between 5% and 20% of the home’s purchase price for a down payment. The National Association of Realtors (NAR) reported that the median down payment hasn’t been over 20% since 2005. Today, the median down payment is only 13%, with first-time homebuyers’ median down payment being only 7%.

However, there are programs available that can help you with as little as 3% down. For example, the Federal Housing Administration (FHA) offers a 3.5% down payment program, and the Department of Veterans Affairs (VA) and the United States Department of Agriculture (USDA) offer programs with 0% down.

What Does This Mean for You?

Larger down payments have their benefits, mainly lower mortgage rates, and monthly payments. But if you can’t swing a 20% down payment, don’t worry! To understand your options, you need to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like downpaymentresource.com.

Assistance Programs

According to downpaymentresource.com, thousands of financial assistance programs are available for homebuyers, like affordable mortgage options for first-time buyers. Of the many available programs, down payment assistance options make up the large majority. They say 73% of the assistance available to homebuyers is there to help you with your down payment.

Tips to Save for Your Down Payment

Whatever your down payment, what are some ways to help save that money? Each month, pretend you already have a mortgage payment and have that amount deposited into savings. Once you have saved enough for your down payment, you can use that money as extra payments on your mortgage to help pay it off faster! Another tip is to get creative with your living situation. Maybe move from a two-bedroom apartment to a one-bedroom or consider a temporary roommate. The additional income can be put towards savings.

Saving for your down payment may seem daunting, but remember that you don’t have to go at it alone. Talk to a real estate agent or lender to start your home buying journey today!

Have you been considering buying a home? With rising mortgage rates, what does that me for you? Mortgage rates have increased two percentage points this year. How does this affect your homeownership plans? 

Currently, buyers react in two ways: they buy before rates climb higher or wait to purchase when rates fall. 

We advise jumping into action rather than waiting to buy if you are financially secure. Here is why:

Historical Data

How do today’s mortgage rates compare to historical data? While higher than the average 30-year fixed rate in recent years, the latest rates are still comparatively low when you look at the bigger picture of where rates have been since 1971. Mark Fleming, Chief Economist at First American, states that:

“. . . historical context is important. An average 30-year, fixed mortgage rate of 5.5 percent is still well below the historical average of nearly 8 percent.”

Today’s mortgage rate still gives you a window of opportunity to lock in a comparatively lower rate than decades past.

Rates Are Climbing Further

Odeta Kushi, Deputy Chief Economist at First American, states:

“. . . ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”

Rates continue to steadily rise this year. As mortgage rates climb, they directly impact a buyer’s monthly mortgage payment. It’ll likely cost you more to buy a home if you wait. 

If you are financially secure, now may be the time to purchase your home rather than later. 

The Mortgage Reports states:

“. . . if you’re on the fence about whether to buy now or wait for a better deal, buying sooner rather than later might be wise. That said, home buying is always a personal decision. Whether you should buy in 2022 depends on your financial situation and the local housing market where you live.”

Take your unique financial situation and the real estate market where you’re looking to purchase.

What’s Right for You?

Consult with a real estate professional and a mortgage loan officer to help guide your decision further. A real estate agent can tell you what’s happening in your local real estate market, and a loan officer can give you tailored advice about qualifying for a mortgage and how much house you can afford.

Speak with professionals in the industry to get their insights before making your homeownership decision.

When it comes to buying a home, there is no one-size-fits-all answer. Based on your unique circumstances, weigh out the pros and cons of waiting to purchase a home or taking action now. Contact me today, and I would love to assist you with all of your real estate needs!

Ready to find your next home or your first home? If you’re searching for a home online, you’re not alone! According to the National Association of Realtors (NAR), the three most popular information sources home buyers use in their home search are online websites (93%) and real estate agents (86%). 

The Internet is a great place to start the home-buying process, but it shouldn’t be your only information source. Here are a few reasons you will want to lean on a trusted real estate professional:

1. Offering Knowledge About the Current Market: Hiring a real estate professional who has their finger on the pulse of the market will make your buying experience an informed and educated one. You need someone who will tell you the truth, not just what they think you want to hear.
2. Neighborhood Knowledge: A real estate agent will provide you with detailed information about a neighborhood that you’re considering, such as the types of homes, average list price, and recent sales data.
3. Connections and Resources: A real estate agent will have a network of industry professionals (such as home inspectors, mortgage brokers, etc.) that they can connect you with.
4. Skilled Negotiator: In today’s market, hiring a talented negotiator could save you thousands, maybe even tens of thousands of dollars. Many intricate steps can get complicated and confusing, from the original offer to the appraisal and the inspection. It would be best to have someone who can keep the deal together until it closes.
5. Making a Competitive and Compelling Offer:  There is so much information in the news and on the Internet about home sales, prices, and mortgage rates. How do you know what’s specifically going on in your area? How do you know what to offer on your dream home without paying too much or offending the seller with a lowball offer? There may be multiple offers on a property in a seller’s market. An excellent real estate agent will help you write an offer that is competitive and has certain contingencies in place that protect you as the buyer.

Bottom Line

While it’s great to start your home search online, you need to partner with a qualified real estate agent to help you through the process from start to finish.

If you’re ready to start searching for your next home or have any questions about the home-buying process, I’d love to help! Contact me today!

Allison got her real estate license in 2015 and signed on with a local new home builder for 6 years where she enjoyed helping her customers achieve their dream of finding the right new home for them.

Allison became a part of the BloomTree Realty after years in New Home Sales sector. With Allison’s expertise she will work with you to secure your dream of finding your new home. Please reach out to her for all your real estate needs.

Fall In Love With Owning a Home

There are many reasons people fall in love with owning a home, but the primary reason is the emotional benefits. The three key emotional benefits of owning a home are security, pride of ownership, and stability.

Financial benefits are always an essential aspect of homeownership. It’s also valuable to understand the nonfinancial and personal benefits are often reasons why so many people genuinely fall in love with their homes. When you own your home, you likely feel a sense of emotional attachment because of the comfort it provides, but also because it’s a space that’s truly yours.

Homeowners feel secure knowing that they have a place to call their own. They can make changes and renovations to their home without having to worry about a landlord’s approval. Homeowners also take pride in their property, knowing that they are responsible for its upkeep and maintenance. And finally, owning a home provides stability – both emotionally and financially. Families can stay in one place for years, building roots in their community.

When the pandemic health crisis began, the world around us changed almost overnight, and we began spending more time in our homes and even began working and teaching our children out of our homes.

That sense of emotional connection without homes genuinely reaches far beyond the financial aspect of homeownership. Because they’re our shelters – ones that we can genuinely call our own. Our homes touch our hearts and can also positively impact our mental health.

Whether you’re thinking of buying your first home, moving up to your dream home, or downsizing to something that better fits your changing lifestyle, take a moment to reflect on what Mark Fleming, Chief Economist at First American, notes:  “Buying a home is not just a financial decision. It’s also a lifestyle decision.”

There are so many reasons to fall head over heels for homeownership. Your home will provide a place to customize and call your own, in addition to the stability and security it will give you. If you’re ready to fall in love with homeownership, let’s connect so you can get started on your home buying journey today.

Allison Wood

(928) 533-4141