Looking back on recent lending history we are reminded of irresponsible lending and buyers getting in over there head. Now many banks are requiring high credit scores and more money down. Have no fear, a program that has been around for years can still put homebuyers in houses for next to nothing. Mortgages insured by the Federal Housing Administration allow borrowers to get approved with down payments as little as 3.5%, without high credit scores.

Some people still think you need to have 20% down to purchase a home! Did you know you can purchase a home with 3.5% down? A majority of buyers utilize the FHA 3.5% down loan. Also there are zero down programs that we will discuss in next week’s “buying zero down” blog.

Still, FHA-insured mortgages are far less risky than the subprime mortgages that lenders originated before the housing bust. FHA-insured mortgages require documentation and proof that the borrowers are capable of making the monthly payments. (Most subprime mortgages didn’t require such proof.)

I remember being at a seminar last year, where the real estate economist was talking about the different generations of home buyers. The economist noted that the younger generations have the monthly income for making a mortgage payment but often times don’t have enough saved up for the down payment. This makes sense as most of this buying pool is just getting out of college and are using their savings to pay off student loans. Not all debt is a bad thing.

The best part is you can be gifted the funds from a family member. The person providing the gift will have to provide a gift letter and their funds will have to be sourced. The provider will have to show where the money came from by supplying copies of withdrawal slips and bank statements.

Let’s use a simple example… say you are looking in the Renton market for a house. In September the average price of single family homes that sold was $351,000. With 3.5% down and a 4.25% interest rate, your payment would be $1995.34. (Includes taxes and insurance, taxes estimated as $3500 a year and insurance $438.75.) That’s a lot less than you expect right?

Interest rates are at record lows, MSN Money just posted an article that they should be increasing back toward the 5% mark in the near future. Home prices are also at a low, making now is a great time to purchase a home. Visit www.tylerfreed.com to start your home buying journey.

Seattle Real Estate Tyler Freed

Realtors See a Decade of Dramatic Developments

NAR takes a look back at the many changes that have occurred over the past 10 years

NAR News Release
January 5, 2010
HousingZone
Washington, D.C. — At the beginning of the 21st century, most home buyers had never viewed a home online; the three top home sale marketing methods were yard signs, newspaper ads and open houses; and nearly nine out of 10 buyers financed their purchase with a fixed-rate, 30-year mortgage. What a difference a decade makes.

“The real estate industry has seen tremendous change and evolution over the past decade,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “As the first, best source for real estate information, Realtors® have not only anticipated and adapted to the evolving needs of their clients and customers, but also have influenced industry trends and innovations that will carry us into the future.”

In 1999, buyers who went online in search for a home were in the minority – only 37 percent of buyers used the Internet in their home search, according to data from the NAR Profile of Home Buyers and Sellers. Today, 90 percent of buyers are searching online, and the real estate industry has responded. Sites like Realtor.com, which attracts nearly 12 million total visits every month, have evolved to gives today’s buyers what they want – not just property listings, but multiple photos, online videos, mapping features, and comprehensive neighborhood information, as well.

Median home values over the past decade have increased more than 25 percent, from $137,600 in November 1999 to $172,600 in November 2009 (the most recent existing-home data available). Fewer people are buying detached, single family homes – 82 percent in 1999 compared to 78 percent in 2009 – but more people are buying homes in suburban neighborhoods – 46 percent in 1999 compared to 54 percent today.

Buyers themselves have also changed. A smaller proportion of married couples are buying homes these days; while married couples comprised 68 percent of all home purchases at the beginning of this century, they represent 60 percent of all buyers today. Single men and women have made up the difference – single men purchased 10 percent of all homes last year, compared to only 7 percent 10 years ago. Single women now represent more than one-fifth of all home buyers – 21 percent, up from 15 percent in 1999.

Other things haven’t changed. The median age for home buyers last year was 39, just as it was in 1999. Neighborhood quality, affordability, and convenience to work and school have consistently been top priorities for both past and present buyers. And eight out of 10 recently surveyed consumers believe that owning a home is an investment in their future.

“Realtors® have been around for more than 100 years, but one constant during that time has been the persistence of homeownership as the American Dream,” said Golder. “As the first decade of this century comes to a close, NAR stands ready to meet the many challenges and opportunities that lie ahead by helping our Realtor® members better serve their clients and communities and ensuring that those dreams of homeownership remain possible for all who want to achieve it.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

advertisement

© 2010, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

Seattle Real Estate Tyler Freed

Realtors predict fate of home prices in 2010
Realtors believe that home prices are stabilizing and will continue to do so in 2010, according to a recent HomeGain survey.
Hannah Schroder, HousingZone Contributing Editor
December 11, 2009
HousingZone
Realtors believe that home prices are stabilizing and will continue to do so in 2010, according to a recent HomeGain survey of nearly 1,000 U.S. real estate agents and brokers. The majority also believe the first-time home buyer tax credit is spurring sales and is contributing factor to home prices stabilizing.

What does this mean for the housing market?
• Sellers are still a tough bunch as they continue to disagree with realtors, even more than before—the percentage of homeowners that believe that their homes should be listed 10-20 percent higher than what their realtors recommend continues to rise (41 percent in Q4 survey), as does the percent of home sellers that believe their homes are worth more than their realtor’s recommended listing price (76 percent in Q4 survey).

• While sellers think home prices are heading up, buyers think home prices are heading down. Realtors must educate both parties toward meeting in the middle.

• The first time homebuyers credit has and will spur sales. Twenty-one percent of realtors said half of their transactions involved a first time homebuyer. However, realtors question whether that spike will continue once the credit expires later next year and additional inventory hits the market.

• Home trends continue to vary by market—home buyers and sellers are more likely to see an increase in housing values in the West and a decrease in the Southeast.

© 2009, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

Seattle Real Estate Tyler Freed

Inspection Perfection Helps Home Buyers with HUD 203K Program

Share and Enjoy:

Seattle Real Estate Tyler Freed