Ways to Save for a Down Payment
For first-time home buyers, there is usually one thing that people are most concerned about when considering home ownership; the down payment. With the real estate market being in great condition, low mortgage rates becoming the norm and the FHA announcing that it will lower its annual premiums, now might be the perfect time for you to buy. An FHA loan can give you one of the lowest down payments on the market, but you’ll still need to save a large amount of money first. Here are some tips we think will help you get there faster:1. Lower your monthly expenses. We all have our vices. We love to go out to eat, grab a daily coffee on the go, spend that bonus check on electronics or shop until we drop. Cutting down on these luxuries is the first step towards saving money. The easiest way to slash your monthly expenses is to start cooking at home more often, limit your shopping, and even lower your rent. Rent is probably your largest expense, so downsizing your home or finding a roommate might be the right thing for you. These small changes can make a BIG difference when you are trying to save for a home. 2. Make it automatic. When you don’t see the money, you don’t even know it’s gone! Setting up an automatic deposit can be a great addition to your slush fund. Have your employer or bank set up an account that takes a certain amount of money from your checking account or percentage of your paycheck and deposit it into your savings automatically each month. 3. Boost your savings by doing what you’re good at. This can be as easy as turning a hobby into a part time job. Although you may not think you should be getting money for your skills, someone out there wants to pay you. Are you crafty? Start selling your work. Are you good at golf or tennis? Start giving lessons. You can also find random short term jobs such as waiting tables or cleaning houses. 4. Put your savings to work. Once you get a good chuck of money saved, it may be a good idea to look into low risk investments. Things such as CDs, Money Markets and High-Yield Savings Accounts can be a great option. Decide when you hope to buy, and look into the different options in that time frame. Whether you are ready now, or in the future, we want to be a resource for you. Contact us today if you have any questions about Down Payments and...
read moreFHA Mortgage Premium Insurance is Reduced
As of January 26, 2015 the FHA has reduced the annual Mortgage Premium Insurance (MIP) from 1.35% to .85%. What does this mean for you? This .5% reduction will make home ownership affordable for more people. Monthly payments will be lowered. And this discount is available for both purchases and refinance* transactions with 30 year terms.** For example, a home buyer with a base mortgage of $150,000 would save $62.50/month on their monthly mortgage payment. HUD estimates these lower premiums will save more than two million FHA homeowners an average of $900 annually and spur 250,000 new home buyers to purchase their first home over the next three years. Contact us today for information regarding FHA’s new annual mortgage insurance premiums. *Except for streamline refinances of FHA loans with case numbers on your before May 30, 2009 and Hawaiian Homelands Loans. **Amortization of 15 years will have standard rate. ...
read moreThe Truth About Mortgage Underwriting
The world is awash in inaccurate sound bites related to mortgage credit. We spoke with numerous industry executives and identified three truths that need to be clarified: 1. Low income buyers actually have it easy. Buyers with poor credit and low income are finding it quite easy to buy a home below the FHA limit. 2. Many affluent buyers find it very difficult. Automated underwriting prevents many highly qualified borrowers, especially affluent retirees, self-employed, or commissioned salespeople from getting a mortgage because their income situation does not fit squarely in the credit box. 3. Industry executives are unintentionally preventing a recovery. Mortgage industry executives lobbying for the good old days where FHA limits were higher, fees were lower, and documentation was easier need to stop whining because they look very unreasonable to regulators and politicians who are not sympathetic. Our purpose here is to shed some light on what is actually happening—- because if there were clarity around this, we would have… Click here to read more Twitter...
read more30-Year Fixed Mortgage Rates Hold Steady
30-Year Fixed Mortgage Rates Hold Steady Mortgage rates for 30-year fixed mortgages remained unchanged this week, with the current rate borrowers were quoted on Zillow Mortgages at 4.05 percent, up from 4.03 percent at this same time last week. The 30-year fixed mortgage rate hovered between 4.02 and 4.08 percent for the majority of the week, dropping below 4 percent on Friday before rising to the current rate this morning. “Last week rates dipped slightly after bank instability in Portugal triggered concerns about the broader European economy,” said Erin Lantz, vice president of mortgages at Zillow. “This week we expect rate activity to remain somewhat subdued amid ongoing international uncertainty.” Additionally, the 15-year fixed mortgage rate this morning was 3.03 percent and for 5/1 ARMs, the rate was 2.79 percent……………Read the full story. Twitter...
read more5 Tips for Millennial Home Buyers
5 Tips for Millennial Home Buyers In previous generations, many people bought ‘starter’ homes while in their 20s or 30s. The world moved at a much slower pace then. People tended to stay put in the cities where they grew up. They wanted ‘roots’ and the status that homeownership afforded. But times have definitely changed. In the next generation of real estate, we’re a much more mobile society. Millennials, Generations X and Y don’t necessarily want to be tied down by roots. They want the freedom to travel, or to take that new job, whether it’s in Chicago, Los Angeles, or Dubai. Homeownership doesn’t have the same status to them that it had to earlier generations. And, they’ve heard the horror stories of home ownership from those who bought during the market high only to see their home values plummet during the recession. But there are still many who want to be homeowners. And, the approach is different now, then it may have been a generation ago. If you’re in your 20s or 30s today and considering buying a home vs. renting, here are some things to consider……..Read the full story. Twitter...
read moreOwners who borrowed on equity face jolt
Owners who borrowed on equity face jolt During the housing bubble, people didn’t just live in their homes — they used them as their personal ATMs. Exploding real estate values gave millions of Americans the motivation to borrow against their home. They would take out home equity lines of credit, or HELOCs, meaning they could get cash for their equity. Between 2004 and 2007, more than 325,000 San Diegans took out home equity lines of credit, totaling around $40 billion, real estate tracker DataQuick reports. Borrowers make interest-only payments on the loan for 10 years. After that, the line of credit converts to a mortgage and must be paid back — typically at a higher interest rate. Had home values kept rising, paying back the loans might have been easy, through a refinance or another line of credit. Today, however, many who bought during the housing bubble are just glad their homes have regained their original value, which plummeted during the Great Recession. Their equity disappeared, but the lines of credit remained. Now the bills from that first wave of HELOCs, taken out in 2004, are coming due. Homeowners must start paying on both interest and principal on the outstanding balance, and often at higher interest rates of 5 or 6 percent………. Read the full story. Twitter...
read moreVacation home market heats up
Vacation home market heats up More Americans felt rich enough to invest in vacation homes last year as the economy continued its recovery! Annual sales jumped nearly 30% to 717,000 homes, according to the National Association of Realtors. Vacation home sales represented 13% of the total market, their highest share since 2006. The median price rose to $168,700, up 12.5% from a year earlier. The sales were spurred by a strong stock market, according to Lawrence Yun, chief economist for the National Association of Realtors. The S&P 500 piled up a whopping 30% return in 2013, its best performance in 16 years. That provided investors with the funds and the confidence to purchase recreational property. Read the full story. Twitter...
read moreHousing’s a poor investment. Buy anyway
Housing’s a poor investment. Buy anyway I was raised to believe that renting amounted to throwing my money away. Buying a home, on the other hand, was an investment — and a safe one. That was before the biggest housing-market bubble in U.S. history began to collapse, tossing trillions of dollars in wealth out the window. Nine years later, values in San Diego County still haven’t fully recovered, particularly if you take inflation into account. In fact, prices have to climb an additional 50 percent before they regain the peak reached in November 2005. This means a whole lot of people have lost equity. However, values are up 29 percent from a bottom reached two years ago. So the market is coming back, just like it did over three lesser downturns since 1980. This suggests buyer confidence is returning. In all likelihood, most people have great reasons that have nothing to do with money, from bigger kitchens to freedom from cranky landlords. Read the full story. Twitter...
read moreSome advice if your home’s underwater
Some advice if your home’s underwater Q: What advice do you have for San Diegans who are still underwater on their homes? Share Photo Reddit ✉ Murtaza Baxamusa — Gerald McClard / Union-Tribune staff -Murtaza Baxamusa, directs planning and development for the Family Housing Corporation, of the San Diego Building Trades in Mission Valley: San Diego’s housing market is less distressed than other metros, as demonstrated by falling foreclosure rates, low foreclosure starts, and price resiliency. With last-year’s price increases, the leftover underwater mortgages were likely purchased at the peak of the bubble. I would guess that most homeowners in these underwater mortgages have been in their homes for less than 10 years. Decisions on home purchases are typically made as long-term investments that break even in 8-12 years. Therefore, if you can afford it, I would recommend staying put for a year or two. Read the full story. Twitter...
read moreExisting Home Sales Report vs the New Home Sales
Existing Home Sales Report vs the New Home Sales Each month, real estate agents and brokers get two reports back to back: The Existing Home Sales Report and the New Home Sales Report. While they sound like they are pretty much the same they are indeed drastically different. The Existing Home Sales Report derives it’s figures and data from The National Association of Realtors. It’s based on exactly what you might think it is, the number of existing homes sold over a given period of time. Existing home sales account for roughly 85% of all home sales. The New Home Sales Report doesn’t come from N.A.R. – it comes from the builders themselves. It’s what we call a fuzzy number. It’s actually the number of initial sales contracts signed over a period of time. A contract is fine, but here’s where the fuzzy comes in. When will those houses be completed? When will the buyers move in? How many of those contracts go to completion (as in a funded loan)? Would you believe 30 to 40 % of those contracts will drop out? That’s Financial Fuzzy-ness. How many in the Existing Home Sales report will drop out? Zero. They are real and hard numbers. They are actual completed sales. See the difference? Then there are the incentives. Read the full story. Twitter...
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