divider

Archive


No Cash for a Down Payment? New Mortgage Programs Might Offer Options

/ 0 Comments

Would be home buyers who have been held back from purchasing a home due to a lack of cash for the down payment may be able to see their dreams become a reality, even without a hefty down payment. Both Freddie Mae and Freddie Mac have introduced home mortgage programs that require as little as 3% down payment.

According to an article published by Fox Business, written by Brittany De Lea, “These new products are designed to compete with the low-down-payment options offered by the Federal Housing Administration (FHA), which offers loans for as little as 3.5 percent down for those with a credit score of at least 580.”
Freddie Mae’s program is named Home Ready and applicants can get approved with credit scores as low as 620 . The program allows parents to co-sign, even if they will not reside at the home. The product is geared toward prospective home buyers in with low to moderate income; both first time and repeat home buyers can qualify for a Home Ready Mortgage.
Similarly, Freddie Mac’s program, Home Possible, serves to offer affordable, low down payment loans specifically to “homebuyers in high-cost and underserved communities”. Either first time or repeat home buyers can qualify, even with credit scores as low as 640.
Read the entire article.

 

 

 

 

Photo Credit: frankieleon

Learn More
separator

Why Are More Americans Choosing to Rent instead of Buy Homes?

/ 0 Comments

The debate over why households choose renting over purchasing a home in the United States has been a hot topic lately.  Analysts have indicated the young generation of millennials are not interested in being tied down to home ownership and prefer renting over buying. However, an article published by CNN by Daniel B. Kline, points out that it is not just millennials who are opting to rent instead of making a home purchase.  Kline also notes that the decision to rent may not be a lifestyle choice, but a financially driven decision.

It is true that the number of households renting a home has increased over the past decade; almost by 10 million.  It is also true that 65 percent of household headed by those 35 years old and younger rent their homes.  However, it’s the heads of households aged 35-44 that made the biggest increase over the past decade.  In this age group, “the percentage of renters jumped from 31% in 2006 to 41% in 2016”.   Heads of households between 45-65 renting homes also increased over the past decade.

However, these households may not all be renting based on lifestyle choices.  In fact, research indicates that many who rent homes would actually like to purchase a home someday.  Further, surveys show that 65% of renters indicated that they are renting homes due to circumstances, not purely by choice.  Circumstances such as increased home prices and tougher mortgage standards may be partially to blame.

Read the entire article.

 

 

 

Photo Credit:  Mark Moz

Learn More
separator

How Is Student Debt Affecting Real Estate Trends?

/ 0 Comments

Student debt is a thorn in the side of many college students years after they receive their diploma.  The rising cost of tuition and debates as to whether students should be responsible for paying for their college education have been hot topics for several years.   According to an article published by Bloomberg, written by Chris Bryant, “In the U.S., where aggregate student debt has surged 170 percent in a decade, recent graduates owe $34,000 on average. About 5 percent owe more than $100,000. “

This may not seem like an issue that older generations would be worried about.  Their student loans have long been paid off, they may have even helped finance their children’s college education, leaving them debt free from college loans.  However, as the article points out, this mounting debt is a factor in some negative economic trends that affect many, even older generations.

Because the generation of millennials will be dedicating funds to pay their student loans off, with salaries that have not rebounded from the 2008 recession, their focus will not be on purchasing a home.  They are struggling to set money aside for a down payment.  Missed loan payments for student loans can affect credit scores, making mortgages harder to come by.    As baby boomers look to downsize homes in retirement, it might be difficult to find buyer from the next generation who can afford to purchase it.

Read the entire article.

Learn More
separator

Find Out What You Need to Earn to Live in Some Major U.S. Cities

/ 0 Comments

The real estate market is showing signs of improvement; as a result, more Americans may be entertaining the idea of purchasing a home for the first time or moving to a new area of the U.S.  However, its wise to consider how much money you need to earn in order to afford a home in a specific city.  A recent study released by  HSH.com provides the details about 27 major U.S. cities and what salary is required in order to purchase a home there.

6808984167_891f6b8a30_oAccording to an article published by Realtor.com’s Catey Hill, the study “assumes the buyer has good to excellent credit (and thus would get a mortgage interest rate—depending on location—of around 4%), put down 20% and would be spending no more than 28% of income on principal and interest.”   Even with a significant down payment and a low mortgage rate, one would need to earn an average salary of almost $58,000 per year to afford a home in Chicago, according to the study results.

Topping the list with a salary requirement of almost $148,000 a year, is San Fransiciso, CA. More affordable cities such as Cincinnati, Atlanta and Pittsburgh allow home buyers earning closer to $30,000 to purchase a home.

To find out about other U.S. cities and how much you would need to earn to purchase a home there, read the entire article.

 

 

(more…)

Learn More
separator