Five Ways to Come Up with a Down Payment

Coming up with a hefty down payment can be intimidating, but with a little work and ingenuity you can do it. Here are a few ideas for coming up with the needed cash:

1. Down-Payment Assistance Programs
Many states offer down-payment assistance programs. You must go through an application process and qualify based on income and credit, but if you do qualify, these programs are amazing. Typically you will receive a grant for the amount of your down payment; it’s basically free money from the government to encourage responsible citizens to buy their first home.

2. Try to Qualify for an FHA Loan
If you qualify, an FHA loan can make first-time home ownership much easier. FHA-backed loans typically offer more manageable down payments (as little as 3.5 percent compared to the 10-30 percent required for conventional home loans). These loans are subject to credit requirements but sometimes less stringent ones than other loans.

3. Help from Family
If your parents or other relatives are in a financial position to help you purchase your first home, they may be happy to do so. Approach the conversation with a gracious and humble mind frame and don’t expect a specific outcome. Emphasize that you are ready to become a homeowner and begin solidifying your financial future, but that you don’t have enough cash on hand for a down payment.

Perhaps you are planning to get married in the near future. Instead of asking your parents to help you pay for the wedding, ask for help with a down payment—a smaller, more modest wedding may be well worth becoming a homeowner. As long as the gift is less than $13,000 (or $26,000 for a couple), you shouldn’t have to pay income taxes on it, either.

4. Boost Your Income
Instead of looking at your current income and thinking that saving a chunk of money is impossible, ask yourself how you can earn more money. Options include freelancing on the side or getting a job on the weekends working retail or at a restaurant. No matter how you choose to boost your income, the main goal is to continue living on your old income while putting away any extra money.

5. Borrow from Your IRA
While taking out a loan from your retirement account is generally frowned upon and penalized with taxes and early-withdrawal fees, one exception is borrowing from your IRA specifically for a down payment on a house. If you qualify, you can borrow up to $10,000 penalty-free toward a real estate purchase.

Are you thinking about purchasing a home and looking for advice on where to start? Give me a call at (626) 252-0839,  we will sit down and draft out a plan for your specific situation, whether it be buying something this month or 6-12 months down the line, its important to have knowledge and tools available to you. Let me help! 

Are you wondering what your home would sell for in today’s market? Click HERE for a free estimate! 

For a more in depth consultation please contact us directly at (626) 252-0839

4 WAYS EMOTIONS CAN INTERFERE WITH HOUSE HUNTING

Buying a home is an exciting, emotional, and stressful project. Whether you have purchased a home before or are preparing to buy your first one, you don’t want to let your emotions make the decision for you. The following are pitfalls that can be costly, and you’ll want to avoid them.

1. Love at First Sight
Don’t fall in love with the first house you see and determine to buy it no matter what. You could end up overpaying for the property. Or, after the sale, you may discover costly repairs that will negate any profit from a future resale. Many real estate agents insist their clients look at a few houses before entering into a contract because they have witnessed buyer remorse when clients insist on buying the first or second home they see.

2. Always Looking for a Better Deal
These buyers are just the opposite of the love-at-first-sight crowd. They think there is always a better deal than the one they just saw, or they hope the price will drop on some of the homes they have liked. While it is possible, it is highly unlikely. If you pass up a good deal just because you think the owner is going to drop the price later on, you are giving another buyer the chance to snatch it up. If a home has all you want, is in the right neighborhood, and is priced well, you better buy it before it’s gone.

3. Paying Too Much for the “Perfect” Home
It is highly unlikely there is any such thing as a perfect home, but sometimes buyers believe they have found one. When this happens the buyer acts on their emotions because they will do anything to get that house. When you buy a home, you always need to know you can resell it without losing any money. Unfortunately, when people find what they believe is the perfect home, they will often bid high to ensure their offer is accepted and in the process may overextend themselves financially.

4. Unrealistic Offers
The opposite of the overpayer is the low bidder. There is a big difference between negotiating a price with a seller and offering an unrealistically low price. Discuss this with your agent before you wind up alienating the seller and possibly the chance to buy the property. Making a realistic bid that is good for you and the seller is the answer to getting the property you want.

Shopping with your emotions rarely yields a good deal. Listen to your real estate agent’s suggestions, look at several homes, and then make your decision. Once you have your home, don’t look back. Enjoy this home and make improvements. You will be one step closer to your dream home.

Are you thinking about purchasing a home and looking for advise on where to start? Give me a call at (626) 252-0839,  we will sit down and draft out a plan for your specific situation, whether it be buying something this month or 6-12 months down the line, its important to have the tools available to you. Let me help! 

Are you wondering what your home would sell for in today’s market? Click HERE for a free estimate! 

For a more in depth consultation please contact us directly at (626) 252-0839

The National Housing Market: Low Inventory, Higher Prices

Every major region of the country saw existing-home sales climb in March. The large gains posted in the Northeast and Midwest helped sales climb 1.5 percent higher than a year ago. Buyers in these regions overcame inventory woes and affordability issues to make their home purchases. On the supply side, there were 1.98 million existing homes for sale at the end of March; at the current sales pace, this represents a 4.5-month supply. Inventory was 5.9 percent higher than a month ago but 1.5 percent lower than a year ago, when housing inventory stood at 2.01 million. This lack of inventory helped drive home prices up. In March, the median existing-home price for all housing types reached $222,700, a rise of 5.7 percent year over year. For the past 49 consecutive months, median prices have seen year-over-year gains, making home affordability a growing concern for buyers.

The Starter Market
First-time buyers accounted for 30 percent of all buyers in March, a figure that is unchanged from both a month ago and a year ago. For all of 2015, the share of first-time buyers in the market was also at 30 percent. According to Lawrence Yun, chief economist of the National Association of Realtors, “With rents steadily rising and average fixed rates well below 4 percent, qualified first-time buyers should be more active participants than what they are right now.” Unfortunately, the same barriers to market entry that stymied first-time buyers in the past are still in place—affordability issues and low availability of starter homes on the market.

The Money-Making Market
Investors are another group who managed to maintain their share of the housing market. All-cash sales remained the same from February to March, accounting for 25 percent of all transactions, up 1 percent from a year ago. Individual investors are behind many of the all-cash sales; in March, 66 percent of them paid for their investments with cash. Of all the homes sold in March, 14 percent were purchased by individual investors, a 4 percent decline from a month ago but unchanged from a year ago.

Regional Home Sales

Northeast: Existing-home sales’ annual rate: 700,000, an increase of 11.1 percent. Sales are 7.7 percent higher than March 2015.

Midwest: Existing-home sales’ annual rate: 1.23 million, an increase of 9.8 percent. Sales are 0.8 percent higher than March 2015.

South: Existing-home sales’ annual rate: 2.25 million, an increase of 2.7 percent. Sales are 2.3 percent higher than March 2015.

West: Existing-home sales’ annual rate: 1.15 million, an increase of 1.8 percent. Sales are 2.5 percent lower than March 2015.

1-626-252-0839 Sell While the Market is HOTT!  What’s Your Home Worth? Find out Now! 

If you’ve been thinking about selling your home, chances are that you’re excited about the possibility of moving and starting a new chapter of your life. Simply deciding to sell your home isn’t enough, though. The process of putting your home on the market can be overwhelming and time-consuming, so before you try to sell your property, you need to ask yourself a few questions. Being honest with yourself and with the people around you will help you have a more positive selling experience when you’re ready to move. 

PREQUALIFIED VERSUS PREAPPROVED

If you are planning on buying a home in the next year, there are a few things you should do before you start looking: decide on the neighborhood that will provide you with good schools and a reasonable commute to work; get your credit reports and confirm all the information is accurate; and learn the difference between pre-qualified and pre-approved mortgage loans.

What Does Pre-qualified Mean?
The first thing you need to know is that being pre-qualified for a mortgage does not guarantee you will get one. When a lender sits down to talk to a prospective buyer, they will ask questions about the buyer’s credit, assets, and income. It’s important to note that no verification of income and assets takes place and no credit check is run. Pre-qualification is based solely on the information you provide to the lender, and it does not mean you will secure a loan.

What Does Pre-approval Mean?
When you are pre-approved by a lender, it means your credit check has been approved and your income and assets have been verified. The lender has made the decision to lend you a certain amount of money to purchase a home. The real estate agent and the seller know you can buy the house if you like it. A pre-approval letter from the lender defines how large a mortgage you are approved for. There is usually a time frame, such as 120 days, to use the pre-approval for the purchase of a home.

To Get Pre-approved You Will Need:

  • At least two years of W-2 forms, several weeks of current pay stubs that provide year-to-date income, two most recent tax returns, plus, proof of bonuses, alimony, and any other earned money.

  • Bank and investment account statements, which provide proof of assets that can cover the down payment and closing costs. If you receive money from family to use for your down payment, you will need a gift letter stating no loan is involved.

  • A credit score of 740 or higher to get the lowest interest rates. If your score is lower, you will have to pay more in interest or possibly make a larger down payment. FHA loans require a minimum of a 620 credit score.

  • A copy of your driver’s license and Social Security number. You will also have to sign a release form allowing the lender to pull your credit report. You may be asked to provide additional paperwork if you have any specific circumstances that can affect your loan.

A pre-approval letter is what you need to get before you go house shopping. Do your preparation work before approaching a lender. Be cooperative, answer all the questions you are asked, and provide requested documents promptly. Once you have your pre-approval, it’s time to find your new home.

1-626-252-0839 Sell While the Market is HOTT!  What’s Your Home Worth? Find out Now! 

If you’ve been thinking about selling your home, chances are that you’re excited about the possibility of moving and starting a new chapter of your life. Simply deciding to sell your home isn’t enough, though. The process of putting your home on the market can be overwhelming and time-consuming, so before you try to sell your property, you need to ask yourself a few questions. Being honest with yourself and with the people around you will help you have a more positive selling experience when you’re ready to move. 

Small Gains in the National Housing Market

Freddie Mac’s Multi-Indicator Market Index (MiMi) analyzes home-purchase applications, payment-to-income ratios, employment figures, and the number of on-time mortgage payments in markets across the country to determine the stability of the housing market. All of these indicators point to a slight improvement in the housing market as it heads into the busy spring season. January’s national MiMi value reached 82.7; while this isn’t as impressive as the all-time high MiMi value of 121.7, it is still a 40 percent improvement over the MiMi’s all-time low back in October 2010. January’s MiMi saw a three-month increase of 1.46 percent. Year-over-year values showed greater gains, with a 7.57 percent climb.

National Pending Home Sales
The Pending Home Sales Index, an indicator based on contract signings, reached 109.1 in February, a 3.5 percent increase from the downwardly revised 105.4 in January. This is a 0.7 percent improvement from February 2015’s index of 108.3. The index has seen year-over-year gains for the past 18 months, yet this last gain was the smallest of the lot.

Regional Pending Home Sales
In the Northeast, the Pending Home Sales Index fell 0.2 percent; it is still 12.6 percent higher than February 2015. The Midwest saw the index climb an impressive 11.4 percent month over month and 2.5 percent year over year. The index rose 2.1 percent and 0.7 percent in the South and the West, respectively. Compared to February 2015, the index dropped 0.4 percent in the South and 6.2 percent in the West.?

Future Predictions
Economists with the National Association of Realtors predict that existing-home sales will reach 5.38 million this year—up 2.4 percent from 2015. The national median existing-home price should also climb between 4 and 5 percent. In comparison, 2015 saw existing-home sales rise 6.3 percent, with home prices increasing 6.8 percent.

1-626-252-0839 Sell While the Market is HOTT!

What’s Your Home Worth? Find out Now!

 

If you’ve been thinking about selling your home, chances are that you’re excited about the possibility of moving and starting a new chapter of your life. Simply deciding to sell your home isn’t enough, though. The process of putting your home on the market can be overwhelming and time-consuming, so before you try to sell your property, you need to ask yourself a few questions. Being honest with yourself and with the people around you will help you have a more positive selling experience when you’re ready to move.

Housing Outlook Stays Bright as Economic Forecast Darkens

forecastWhile the outlook for overall economic growth is darkening, the housing market is expected to keep up its momentum in 2016, according to Freddie Mac’s April 2016 Economic Outlook released on Friday.

Freddie Mac downwardly revised its forecast for Q1 GDP growth from 1.8 percent down to 1.1 percent. The “advance” estimate for GDP growth in the first quarter will be released by the Bureau of Economic Analysis (BEA) on Thursday, April 28. The GDP grew at an annual rate of just 0.6 percent in the first quarter of 2015 but then shot up to 3.9 percent for Q2; for the third and fourth quarter, the real GDP grew at rates of 2.0 percent and 1.4 percent, respectively.

The first quarter for the last few years has been punctuated by slow economic growth. While some of this can be attributed to seasonality, Ten-X (then Auction.com) Chief Economist Peter Muoio said that last year’s dismal GDP showing in the first quarter could be attributed to the brutal winter which slowed economic activity, labor disagreements at a bunch of the West Coast ports that really slowed the flow of cargo in Q1, and low oil prices (though this was partially offset by lower gas prices which put more money in consumers’ pockets).

“We’ve revised down our forecast for economic growth to reflect the recent data for the first quarter, but our outlook for the balance of the year remains modestly optimistic for the economy,” Freddie Mac Chief Economist Sean Becketti said. “However, we maintain our positive view on housing. In fact, the declines in long-term interest rates that accompanied much of the recent news should increase mortgage market activity, particularly refinance.”

On the positive side, Freddie Mac expects the unemployment rate will fall back below 5 percent for 2016 and 2017 (last month it ticked back up to 5.0 percent after hovering at 4.9 percent for a couple of months). Reduced slack in the labor market will push wage gains above inflation, although the gains are expected to be only modest, according to Freddie Mac.

While the economic forecast for Q1 has grown darker, the forecast looks bright for housing in 2016, however.

“We expect housing to be an engine of growth,” Freddie Mac stated in the report. “Construction activity will pick up as we enter the spring and summer months, and rising home values will bolster consumers and help support renewed confidence in the remaining months of this year.”

Freddie Mac

Low mortgage rates have boosted refinance activity in the housing market during Q1. The 30-year fixed mortgage rate averaged 3.7 percent for the first quarter, which drove an increase for the 1-4 single-family originations estimate for 2016 up by $50 billion up to $1.7 billion. Rates are expected to bump up, however, and average 4 percent over the full year of 2016, according to Freddie Mac. House prices are expected to appreciate by 4.8 percent over 2016 and 3.5 percent for 2017; homeowner equity is expected to rise as a result of the home price appreciation, which could mean more refinance opportunities.

The low mortgage rates combined with solid job growth are expected to make 2016 the strongest year for home sales since the pre-crisis year of 2006 despite the persistently tight inventory of for-sale homes, according to Freddie Mac.

“Sales were slow in the first quarter, but trends in mortgage purchase applications remain robust and we expect home sales to accelerate throughout the second quarter of 2016 as we approach peak homebuying season,” Freddie Mac said.

1-626-252-0839 Sell While the Market is HOTT!

What’s Your Home Worth? Find out Now!

If you’ve been thinking about selling your home, chances are that you’re excited about the possibility of moving and starting a new chapter of your life. Simply deciding to sell your home isn’t enough, though. The process of putting your home on the market can be overwhelming and time-consuming, so before you try to sell your property, you need to ask yourself a few questions. Being honest with yourself and with the people around you will help you have a more positive selling experience when you’re ready to move.

Click here to view the entire Freddie Mac Economic Outlook for April 2016.

About Author: Brian Honea

Brian Honea
Brian Honea’s writing and editing career spans 14 years across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master’s degree from Amberton University in Garland.

How’s the Market??? Snapshot for March 2016- Real Estate Market Trends

Here is this month’s How’s the Market??? Snapshot. If you saw last month’s Snapshot you will notice that our local real estate trends show median prices are still creeping up, its just taking a little longer for homes to sell! If Hows the market imageyou would like more detailed information about how much your home is now worth after the Real Estate Crash, send me an email, text, or call me. I’ll be more than happy to provide you with a Free, no obligation report of what its worth and things you can do to improve the value of your home.

I hope you will find the following snapshot of local Real Estate inventory interesting. The table represents aggregated values based on MLS data for the specified date.

Housing Inventory Snapshot March 31, 2016
Average List Price 30 Days Trend Median List Price 30 Days Trend Average DOM: active 30 Days Trend Number of Listings
Los Angeles County, CA
Single Family under $1M $577,104 4.57% $559,000 5.67% 65 -7 7002
Single Family over $1M $3,601,488 -0.92% $2,095,000 0.29% 87 -7 4791
Condo/Townhome under $600K $390,169 0.84% $389,000 0.26% 61 -3 1849
Condo/Townhome over $600K $1,277,128 -0.52% $899,000 0.01% 61 -3 1294
Riverside County, CA
Single Family under $500K $334,726 1.41% $339,000 1.50% 82 -3 5718
Single Family over $500K $1,594,716 0.22% $930,000 1.09% 102 -5 5765
Condo/Townhome under $300K $205,773 -0.39% $212,000 -1.17% 117 9 1233
Condo/Townhome over $300K $569,457 5.95% $469,000 4.45% 93 3 1411
San Bernardino County, CA
Single Family under $500K $290,247 1.31% $288,000 2.86% 93 -5 4314
Single Family over $500K $1,772,663 -0.24% $988,800 2.47% 96 -11 3420
Condo/Townhome under $300K $205,067 2.97% $225,000 4.65% 75 -7 228
Condo/Townhome over $300K $696,569 7.37% $599,000 9.01% 44 -3 622
Orange County, CA
Single Family under $1M $755,087 3.26% $749,000 3.47% 61 -7 4133
Single Family over $1M $3,562,601 -2.19% $2,288,000 -0.31% 97 -12 2555
Condo/Townhome under $600K $406,851 0.48% $412,000 0.49% 57 -3 1271
Condo/Townhome over $600K $1,034,862 -3.03% $848,500 2.86% 56 -3 810
If you know someone who is considering buying or selling a home, please give me a call. I will provide professional & courteous service along with knowledgeable guidance through the process.
Sincerely,
Yesenia E. Ruvalcaba-Garcia, Broker
Realtor®/HUD REO & Listing Specialist
Direct (626) 252-0839
Office (626) 917-6200 ext. 14
Cell Phone (626) 252-0839
Fax (626) 209-8318
CalBRE License Number: 01293970
yeseniaruvalcaba@aol.com
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New Century Realtors