All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Homeowners, For Sellers, General, Move-Up Buyers

Stop Wondering What Your Budget Is & Get Pre-Approved!

Stop Wondering What Your Budget Is & Get Pre-Approved! | Simplifying The Market

In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show that you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are not in an incredibly competitive market, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential homebuyers overestimate the down payment and credit scores necessary to qualify for a mortgage. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so today.

 

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Homeowners, For Sellers, Move-Up Buyers

Young First-Time Buyers Are Saving for Their Dream Homes

Young First-Time Buyers Are Saving for Their Dream Homes | Simplifying The Market

Young buyers (Millennials & Gen Z) have waited longer than previous generations to enter the housing market for their first home. However, this hasn’t stopped them from dreaming about the home they will eventually buy. Many spend hours searching listings and building Pinterest boards of their favorite home features.

According to a survey from Open Listings, 70% of single renters are more likely to spend their Sunday nights swiping through house listings than dating profiles.

All that time window shopping has led 45% of millennials to expect the first home they buy to be their “dream home”! They are willing to wait longer, save more for a larger down payment, and are pickier about the listings they want to tour and the features that they want to see in their first home.

Waiting a little longer to buy a home than their parents or grandparents did has also helped young buyers become more established in their careers prior to making such a large purchase. Lawrence Yun, NAR’s Chief Economist, recently commented,

“Older millennials are now entering the prime earning stages of their careers, and the size and costs of homes they purchase reflect this. Their choices are falling more in line with their Gen X and boomer counterparts.”

In some areas of the country, high competition in the starter home market forces young buyers to wait longer. The extra money they save during that time opens their search to bigger, more expensive homes.

If this trend continues, older millennials will skip the starter home altogether, going straight to a trade-up or premium home instead.

Bottom Line

If you are one of the many young renters planning on buying your first home soon, let’s get together to help determine what type of home will best suit your present and future needs.

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Homeowners, For Sellers, General, Interest Rates, Move-Up Buyers

3 Things to Know in the Housing Market Today!

3 Things to Know in the Housing Market Today! | Simplifying The Market

A lot is happening in the world, and it’s having a direct impact on the housing market. The reality is this: some of it is positive and some of it may be negative. Some we just don’t know yet.

The following three areas of the housing market are critical to understand: interest rates, building materials, and the outlook for an economic slowdown.

1. Interest Rates

One of the most important things to consider when buying a home is the interest rate you will be charged to borrow the money. In our recent post we posed the question, “Are Low Interest Rates Here To Stay?” The latest information from Freddie Mac makes it appear they are. We are currently at a 21-month low in interest rates.3 Things to Know in the Housing Market Today! | Simplifying The Market

2. Building Materials

Talk of tariffs could also affect the housing market. According to a recent article, the National Association of Home Builders reports that as much as $10 billion in goods imported from China are used in homebuilding. Depending on the outcome of the tariff and trade discussions between several countries, there could be as much as a 25% boost in the cost of building materials.

3. Economic Slowdown

In a prior blog post on this topic, we began the year with many economic leaders thinking we could expect a recession in late 2019 or early 2020. As spring approached, we reported that economists had started to push that projection past 2020.  Now, three leading surveys indicate that it may begin in the next eighteen months.3 Things to Know in the Housing Market Today! | Simplifying The Market

Bottom Line

We are in a strong housing market. Wages are increasing, home prices are appreciating, and mortgage rates are the lowest they have been in 21 months.  Whether you are thinking of buying or selling, it’s a great time to be in the market.

 

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Homeowners, For Sellers, General, Move-Up Buyers

Renting or Owning, What Is Better for You?

¬Renting or Owning, What Is Better for You? | Simplifying The Market

In a real estate market where home prices are rising, many have begun to reexamine the idea of buying a home, choosing instead, to rent for a while. But often, there is a dilemma: should you keep paying rent, knowing that rent is rising too, or should you lock in your housing cost and buy a home?

Let’s look at both scenarios and analyze the pros and cons of each:

Renting

With the housing market crash in 2008, many homeowners lost their homes and became renters. According to Iproperty Management, “the number of households renting their home … rose from 31.2% of households in 2006 to 36.6% in 2016”.

Some choose to rent because it is more convenient for their lifestyle. Those whose job requires frequent moves need the flexibility that a 6-12 month lease agreement gives them so they can move to their next assignment!

Many renters believe that renting is cheaper because they do not have to pay for maintenance and repairs. (Not true! Landlords work those expenses into your rent and other fees). Another reason many rent is that they feel like they cannot afford the down payment and closing costs required to buy a house, due to their inability to save much after paying their monthly expenses.

That can be true! Nearly 1 in 4 renters spend at least half their household income on rent. In 2017 the “severely” burdened renters’ rate was 24.7% with 24.9% reporting they were “moderately” burdened.

Renting also brings some financial disadvantages. Homeowners can take advantage of tax deductions that let them claim their property taxes and mortgage interest. Additionally, there is a big risk that your rent will go up every time you renew your lease, as we know the median asking rent has been increased steadily since 1988!Renting or Owning, What Is Better for You? | Simplifying The MarketOne of the major challenges with renting is that you don’t have a space to call your own. When you rent, you are paying your landlord’s mortgage, and therefore they are the beneficiaries of the equity gained from paying that mortgage.

Now let’s explore the other side: Homeownership

In the past, we have mentioned the many financial and non-financial benefits of becoming a homeowner. So, let’s just focus on the one big difference between renting and owning, the ability to lock in your housing cost!

Assuming you will have a fixed-rate mortgage, your costs are predictable! You will know exactly what your mortgage payment will be for the next 15-30 years. The homeownership rate in 2018 was 64.4%, and has been on the rise. Those households locked in their housing cost rather than wait for their landlord to raise their rent again!

What are the disadvantages of owning a home? Well, it is a long-term financial commitment! It is not easy to pack quickly and move. You will need time and good planning to do it in a short amount of time.

You need to save your money! Getting a mortgage requires a down payment, closing costs, and moving expenses. Again, that will require some savings and planning!

Unless you have a homeowner’s association (HOA) (and you pay an HOA fee) or a home warranty, you will be responsible for maintenance and taking care of the home. This may range anywhere from regular landscaping to major repairs.

Bottom Line

Like everything in life, there are pros and cons. What is better for you depends on your situation! If you are interested in becoming a homeowner and want to discuss the pros and cons, let’s get together to help you review your current situation and answer any questions you may have!

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom

 

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Homeowners, For Sellers, General, Move-Up Buyers

2 Myths Holding Back Home Buyers

2 Myths Holding Back Home Buyers | Simplifying The Market

Freddie Mac recently released a report entitled, “Perceptions of Down Payment Consumer Research.”Their research revealed that,

“For many prospective homebuyers, saving for a down payment is the largest barrier to achieving the goal of homeownership. Part of the challenge for those planning to purchase a home is their perception of how much they will need to save for the down payment…

…Based on our recent survey of individuals planning to purchase a home in the next three years, nearly a third think they need to put more than 20% down.”

Myth #1: “I Need a 20% Down Payment”

Buyers often overestimate the funds needed to qualify for a home loan. According to the same report:

22% of renters and 31% of homeowners believe lenders require 20% or more of a home’s sale price as a down payment for a typical mortgage today. And,

“If a 20% down payment was required, 70% of those who were planning to buy a home in the next three years said it would delay them from purchasing and nearly 30% indicated they would never be able to afford a home.”  

While many believe at least 20% down is necessary to buy the home of their dreams, they do not realize programs are available which permit as little as 3%. Many renters may actually be able to enter the housing market sooner than they ever imagined!

Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

Many either don’t know or are misinformed concerning the FICO® score necessary to qualify, believing a ‘good’ credit score is 780 or higher.

To debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.2 Myths Holding Back Home Buyers | Simplifying The MarketAs indicated in the chart above, 52.4% of approved mortgages had a credit score of 600-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom