Millennials Flock Towards Low Down Payment Programs

Millennials Flock Towards Low Down Payment Programs

Millennials Flock Towards Low Down Payment Programs

A report released by Down Payment Resource shows that 61% of first-time homebuyers purchased their homes with a down payment of 6% or less.

 

The trend continued among all buyers with a mortgage, as 73% made a down payment of less than 20%.

 

An article by Chase points to a new wave of millennial homebuyers:

 

“We teamed up with Google to help us better understand what customers are searching for and how the home buying landscape is evolving. We found that millennials and first-time homebuyers are making a big splash in the market, and affordability remains top of mind.”

 

Among millennials who purchased homes, David Norris, Loan Depot’s Head of Retail Lending, said:

 

“It’s clear from the survey results that Millennials have a lot of anxiety built up about the home buying process.

 

There is good news, however, as there’s more flexibility than most Millennials think regarding how to qualify for a loan and what’s needed for a down payment.”

Bottom Line

If you are one of the many millennials who is debating a home purchase this year, contact a local professional who can help you understand your options and set you on the path to preapproval.

Net Worth of Homeowners 44X Greater than Renters

Net Worth of Homeowners 44X Greater than Renters

Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey data, covering 2013-2016 was released two weeks ago.

The study revealed that the 2016 median net worth of homeowners was $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

Owning a home is a great way to build family wealth

As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.

That is why, for the fourth year in a row, Gallup reported that Americans picked real estate as the best long-term investment. This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26% and then gold, savings accounts/CDs, or bonds.

Greater equity in your home gives you options

If you want to find out how you can use the increased equity in your home to move to a home that better fits your current lifestyle, meet with a real estate professional in your area who can guide you through the process.

No… You Do Not Need 20% Down to Buy NOW!

No… You Do Not Need 20% Down to Buy NOW!

The Aspiring Home Buyers Profile from the National Association of Realtors (NAR) found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. The results of the survey show that non-homeowners cite the main reason for not currently owning a home, as not being able to afford one.

This brings us to two major misconceptions that we want to address today.

 

  1. Down Payment

 

NAR’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 39% of non-homeowners say they believe they need more than 20% for a down payment on a home purchase. In actuality, there are many loans written with a down payment of 3% or less.

 

Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

 

  1. FICO® Scores

An Ipson survey revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO® scores of approved conventional and FHA mortgages are much lower.

The average conventional loan closed in August had a credit score of 752, while FHA mortgages closed with a score of 683. The average across all loans closed in August was 724. The chart below shows the distribution of FICO® Scores for all loans approved in August.

 

No… You Do Not Need 20% Down to Buy NOW! | Keeping Current Matters

 

Bottom Line

If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, sit down with a professional who can help you understand your true options.

 

 

Mortgage Interest Rates Reverse Course in 2017

Mortgage Interest Rates Reverse Course in 2017

To start the year, housing experts all agreed on one thing: 2017 was going to be the year we would see mortgage interest rates begin to rise. After years of historically low rates, and an improving economy, the question wasn’t if they would increase but instead how much they would increase. Some thought we could see rates hit 5-5.5% by the end of the year. However, the exact opposite has happened. Instead of higher rates as we head into the middle of 2017, we now have the lowest rates of the year (as reported by Freddie Mac). Here is a graph of mortgage rate movement since the beginning of the year:

Projections still call for an increase…

Four major entities (Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors) are still projecting that rates will increase by the fourth quarter of the year. Mortgage Interest Rates Reverse Course in 2017 | Keeping Current Matters

Bottom Line

No one knows for sure where interest rates will be in six months. However, if you are thinking about buying your first house or trading up to the home of your dreams, you can still get a mortgage at historically low rates RIGHT NOW.

 

Gallup: Real Estate is Best Long-Term Investment 4 Years Running

Gallup: Real Estate is Best Long-Term Investment 4 Years Running

Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks/mutual funds, gold, savings accounts/CDs, or bonds.

For the fourth year in a row, Real Estate has come out on top as the best long-term investment! This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26%. The full results are shown in the chart below.

Gallup: Real Estate is Best Long-Term Investment 4 Years Running | Keeping Current Matters

The study makes it a point to draw attention to the contrast of the sentiment over the last four years compared to that of 2011-2012, when gold took the top slot with 34% of the votes. Real estate and stocks took second and third place, respectively, while still in recovery from the Great Recession.

Bottom Line

As the real estate market has recovered, so has the belief of the American people in the stability of housing as a long-term investment.

How Fast Can You Save for a Down Payment?

How Fast Can You Save for a Down Payment?

Saving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary. So, we set out to find out how long would it take you to save for a down payment in each state?

Using data from the United States Census Bureau and Zillow, we determined how long it would take, nationwide, for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense.

By determining the percentage of income spent renting a 2-bedroom apartment in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own.

According to the data, residents in Iowa can save for a down payment the quickest in just under 2 years (1.99). Below is a map created using the data for each state:

How Fast Can You Save for a Down Payment? | MyKCM

What if you only needed to save 3%?

What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3% down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years, but becomes attainable in a year or two in many states as shown in the map below.

How Fast Can You Save for a Down Payment? | MyKCM

Bottom Line

Whether you have just started to save for a down payment, or have been saving for years, you may be closer to your dream home than you think! Let’s meet up so I can help you evaluate your ability to buy today.

What can’t I pour down my sink?

Do not pour grease or household cleaners down the drain.  You should take the cleaners to a hazardous collection site.

It is very hard on the sewage pipes to pour oil or grease of any kind down the drain. Even when washed down with hot water, grease will clog the sewer lines. So please properly dispose of your grease by pouring it into a container and sending it to the landfill.

 

Recycling Program

recycling-bin-iconThe City of Huron implemented curbside collection of comingled recyclables in July 2013.  A separate recyclable container (blue with a yellow lid) has been issued to households that participate. To sign-up for a recycling container please contact the Solid Waste Department at 353-8542 or Email

The recycling containers will be picked up by the city each week on the same day that garbage is collected in that neighborhood.  Because the containers and recyclables are light and susceptible to being blown over in the wind, the city asks that containers not be set out for collection unless they are at least one third full.  The city asks that the containers be stored away from the normal collection point so that the city does not tip an empty container.  Remember that when containers are set out for collection, they need to be at least three feet away from each other and three feet away from any other objects (garage, fence, vehicle, etc.) so that the collection arm on the collection vehicle has room to safely operate.

What can be placed in the recycling container?

The following clean and dry materials are comingled in the recycling container:  all clean and dry paper including telephone and paperback books, newspapers, magazines, office paper, flyers and junk mail; corrugated and flat cardboard (like cereal, tissue, dry food and detergent boxes); all clean and dry plastic containers (like soda, juice, cleaning detergent, shampoo, and lotion bottles, milk jugs, margarine, and yogurt tubs) that are marked with the recycling triangle; any plastic lid from a recyclable plastic container – please remove the lids from the containers; all plastic bags including film plastic grocery bags – placed inside a plastic grocery bag; all clean aluminum, tin, metal and bi-metal cans and containers; and all clean aluminum foil and clean aluminum foil pans.

The Recycling Guide provides more information about Huron’s comingled household recyclable collection program.

The Recycling Presentation provides background information about Solid Waste Recycling in Huron.

How do I find out about snow removal procedures?

shoveling-snow_s600x600When the city declares a Snow Alert, parking is prohibited on city streets until the snow is cleared from curb to curb. Usually a Snow Alert is issued once we have received 2” or more of snow; however, alerts are also based on weather conditions such as wind and ice, as well as the amount of additional snow forecasted, and city crews may begin removing snow from emergency routes before the alert is issued. The local news media will announce when a Snow Removal Alert has been declared. Snow Removal brochures are available at City Hall, 239 Wisconsin Ave SW (605) 353-8502. During the winter months snow removal procedures are scrolled on TV Channel 6. You may also call (605) 353-8501 for Snow Removal Updates. City’s snow removal procedures.