What Do You Know About Down Payments?

How Much Do You Know About Down Payments?

Whether you’ve owned a home before, or you’re ready to jump into homeownership for the first time, there are always a lot of questions swirling around about what is truly required for a down payment, and how to best source down payment assistance. Let’s tackle these two today.

1. How much do you really need for a down payment?

How Much Do You Know About Down Payments? | Keeping Current Matters

There is a long-standing misconception about down payment requirements. A survey from Fannie Maeshows only 17% of consumers know the minimum options are actually between 1 – 5% of the purchase price and 40% don’t know how much they need at all.There are many mortgage loans available that require as little as 3% down for first-time buyers, and some ask for only 3.5% down from repeat buyers. There are even loans available for Veterans that provide 0% down payment options too.

We’ve mentioned recently that you don’t need to come up with a 20% down payment to buy, and we’ve also shared how quickly you can save for a 3% or 10% down payment, depending on where you live. If you’re planning to put down just 3%, the research shows it may be possible in most states to have enough saved for a down payment in less than a year. That puts homeownership in a much closer reach for many potential buyers, maybe even you!

2. How can I get help with my down payment?

Regardless of the loans available, many buyers still need assistance with a down payment. The great news is, there are a lot of ways to tap into down payment assistance options. Here are just a couple of them:

Assistance from Family Members

The National Association of Realtors (NAR) said, “a third of recent first-time buyers received down payment assistance from family members.” They also mentioned, “the average net worth of those aged 75 and over stands at $264,800…They just might offer the boost the next generation needs to become homeowners.

That means one of the ways to find help with a down payment is to accept a gift from a family member. If this is an option for you, make sure you talk to your loan officer before you accept the money, to ensure you document the process the way it is required by your loan. This way, it will be received properly and you can still potentially qualify.

Down Payment Assistance Programs

The reality is, not everyone has a loved one or a family member who can provide help with a down payment. There are, however, more than 2,500 down payment assistance programs available (by local areas like city, county, or neighborhood), and some of them are even specifically for first-time buyers.

The gap, as mentioned in the same survey, is “only 23% of consumers are familiar with low down payment programs.”

That’s why it is so important to get familiar with these options by doing your homework before you plan to buy a home. Determine what is available in the area where you ultimately want to live, so you have all the details you need to take advantage of the down payment assistance option that is best for your family.

Bottom Line

If buying a home is one of your long-term goals, you may be able to get there sooner than you think by tapping into one of the many down payment assistance programs available. Let’s connect you with one of my preferred lenders who specialize in these programs.

Chat with New Avenue Realty Group at 972-813-9788 or atfowler@kw.com.

Article from Keeping Current Matters.

Mid-Year Housing Update: What You Need to Know!

Shifting trends and industry-leading research are pointing toward some valuable projections about the status of the housing market for the rest of the year.

If you’re thinking of buying or selling, or if you just want to know what experts are saying is on the horizon, here are the top three things to put on your radar as we head into the coming months:

  1. Home prices are appreciating at a more normal rate: Home prices have been appreciating for about ten years now. Experts at the Home Price Expectation Survey, Mortgage Bankers Association, Freddie Mac, and Fannie Mae are forecasting continued growththroughout the next year, although it should be leveling-off to normal appreciation (3.6%), as we move into 2020.
  2. Interest rates are low: Over the past 30 years, the average mortgage rate in the United States has been 8.27%, and rates even peaked as high as 18% in the 1980s. Today, at 3.81%, the rate is considerably lower than the historical 30-year average. Although experts predict it may climb into the low 4% range in the near future, that’s still remarkably lower than our running average, suggesting a great time to get more for your money over the life of your loan.
  3. An impending recession does notmean there will be a housing crash: Although expert research studies such as those found in the Duke Survey of American CFOs and the National Association of Business Economics, are pointing toward a recession beginning within the next 18 months, a potential recession isn’t expected to be driven by the housing industry. That means we likely won’t experience a devastating housing crash like the country felt in 2008. Expert financial analyst Morgan Housel tweeted:

“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”

In fact, during 3 of the 5 last U.S. recessions, housing prices actually appreciated:

Mid-Year Housing Market Update: Three Things to Know Today | Keeping Current Matters

Bottom Line

With prices appreciating and low interest rates available, it’s a perfect time to buy or sell a home. Reach out to New Avenue Realty Group of Keller Williams to see how you can take the next step in the exciting journey of homeownership.

📞 972-813-9788

📧 atfowler@newavenuerealty.com

📆 atfowlerrealtor.appointy.com

Do You Believe That Homeownership is An Investment?

The Federal Reserve Bank (The Fed) recently released their 2019 Survey of Consumer Expectations Housing Survey. The survey reported that 65% of Americans believe homeownership is a good financial investment. Since 2014, the percentage has increased by over nine percent.Americans' Powerful Belief in Homeownership as an Investment | Keeping Current MattersThe Fed’s survey also showed that when the results are broken down by age, education, income, or region of the country, more than 55% of Americans in each category see homeownership as a good investment.

This coincides with a recent Gallup survey of Americans which revealed that real estate was their number one choice for the best long-term investment when compared to stocks, savings accounts or gold.

Bottom Line

Americans’ belief in residential real estate as a good financial investment continues to grow as the housing market returns to normalcy.

A Touch of Gold Master Bedroom Reveal

It’s been almost two years since I’ve moved into my home and finally I have set my sights on completing my master bedroom. Since the beginning, I’ve said that this room would be my touch of gold. I started buying things that had gold in it. For the most part, I was happy with my bedroom.

Accenting my bedroom with gold pieces and using dark colors to bring out the contrasts.
BEFORE

However, I needed a focal point. I thought about wallpaper. I bought this one roll from Target and just never got started. I thought about wood wall plank that got stuck to my wall with the samples. I felt defeated. I put the project on the backburner to flip homes instead.

It wasn’t until one day I was following Instagrammers, @angelarosehome and @philip_or_flop, that I discovered wainscoting. I was hooked and watching them tranform their homes as a DIY, I knew it was perfect for my bedroom. I actually did my first project at an investment property. It was super easy and fun. However, my master bedroom is 13 feet by 17 feet with 9 feet ceilings. I knew I wasn’t taking on that task by myself.

Hence a random night on Facebook marketplace, I discover Modern Wainscoting. It was the best thing ever and I was hooked. I followed the page AND found him on Instagram @modernwainscoting. I knew this would be my final decision maker on my master bedroom. Watch my bedroom transform and find details on items.

After painting the wall in Caviar by Sherwin Williams.
Started with the borders then went to the middle.
Created the rectangles in the inside.
Accent Wall with Wainscoting is Complete.
AFTER.

Accesories from Charter Furniture & At Home Stores. Lamp source listed below.

Tufted Blue Stools – Tuesday Morning

These may or may not be nightstands but I absolutely loved them. They have outlets and USB plugs on the back making them super useful.

Nightstand – Power Outlet Chest

I’m a huge advocate of storage. I place extra blankets and pillows in a decorative wire basket from Target.

View more items of the bedroom and where to purchase them at below:

Antique Round Mirror – Purchased from At Home (find similar ones here)

Antique Mirror Accessories – At Home Stores (it was a collection from 2018)

LampsDark Glass with Brass Detail Large Lamp Base Black

Lamp ShadeProject 62 Lampshade

Pillows – HomeGoods

Coverlet & ShamsWest Elm

Fur Blanket – Tuesday Morning

Where do I like to shop for home furnishings? Target is one of my favorite places along with HomeGoods, At Home Stores, Tuesday Morning, and Wayfair for budget goods. You can even save 25% online when you shop at Target and pick up from the store. There are a few more items that I need to make this room complete (chandelier, chaise lounge, side board, wall decor). Follow me on Instagram to see more as I update my home.

Disclosure: The links in this post contain affiliate links and I will receive a small commission if you make a purchase after clicking on my link.

Let’s Talk DFW Real Estate!

Move from renter to homeowner.

The time is here and you want to buy a home. There are so many people who are excited from moving from renter to homeowner throughout every year. However, with the Dallas-Fort Worth metroplex growing each and everyday, how do you decide on where to live?

For some people, the close proximity to work is important. For others, the close proximity to things outside of work is more important. I’ve actually had clients that had to live near Target. As a Target fanatic myself, I couldn’t blame them. After searching any and everywhere, they gave up the dream to buy a home near a Target. However, guess what? We found them a home in their price range ACROSS from a Target. LOOK AT GOD!

Now let’s talk a little more in depth on where to go. Many times we love where we rent or we hate it. Do you know the cost of homes where you live? Here is the chance to see where you can buy. One rule of thumb I tend to tell people is that you can either afford 2 times your monthly salary or four times your monthly salary. Why so? Well, when you purchase a home, a lender qualifies you based on your debt to income ratio.

Debt to Income Ratio

debt-to-income, or DTI, ratio is derived by dividing your monthlydebt payments by your monthly gross income. The ratio is expressed as a percentage, and lenders use it to determine how well you manage monthly debts — and if you can afford to repay a loan.

Here’s a simple two-step formula for calculating your DTI ratio.

  1. Add up all of your monthly debts. These payments may include:
    • Monthly mortgage or rent payment
    • Minimum credit card payments
    • Auto, student or personal loan payments
    • Monthly alimony or child support payments
    • Any other debt payments that show on your credit report
  2. Divide the sum of your monthly debts by your monthly gross income (your take-home pay before taxes and other monthly deductions).
  3. Convert the figure into a percentage and that is your DTI ratio.

Keep in mind that other monthly bills and financial obligations — utilities, groceries, insurance premiums, healthcare expenses, daycare, etc. — are not part of this calculation. Your lender isn’t going to factor these budget items into their decision on how much money to lend you. Keep in mind that just because you qualify for a $300,000 mortgage, that doesn’t mean you can actually afford the monthly payment that comes with it when considering your entire budget. – Excerpted from Bankrate.com

Your debt to income ratio (DTI) will determine which loan program makes sense for you as well. If you have a higher DTI, you may work best with a FHA loan as they have higher DTI qualifications up to 56.9%. If you are at 50% or below, you may qualify to do a conventional loan. If your DTI, exceeds any of these numbers, you may be asked to pay off some things to get where you need to be to get qualified.

Mortgages are NOT like rental qualifications. Rental qualifications are based on your monthly gross income being 3 times the monthly rent. A mortgage lender looks at ALL of your debt reported on your credit report. Let’s use an example for DTI qualifications.

EXAMPLE:

Gross Income – $48,000 salary = $4000 per month

Debt: Car Note – $350; Student Loans – $200, Credit Card 1 – $55; Credit Card 2 – $75; Personal Loan – $100. These are all based on monhtly payments NOT the overall payment. The total debt in this situation is $780/month. Now let’s say that the mortgage payment on said home would be $1800. That would bring your total monthly debt up to $2580. Would the lender qualify you for that home? Well, let’s see. Divide $2580/4000. That equals 65% of debt to income. Now, the lender may not qualify you for a home that would cost $1800/month. However, you may can get qualified for a home that cost $1450/month. Want to spend a little more? Your next option would be to eliminate some of the debt. In this example, to get the home that cost $1800, you’d need to eliminate $350 of debt. Where would that be from?

I tell clients that the way they could afford more house would be to either eliminate some debt, increase income, put down more money on the home, or all of the above.

Cost of Homes in DFW

As you can see, the average price of homes in DFW have increased 2.9% from May 2018 to May 2019 to $330,766. This isn’t to say that all homes in DFW are $330,766 but on average the home sales are.

How do you find which areas fit more of your budget? Consider the average sales prices of area. Let’s break it down within counties.

Some of the top places that my clients are moving to are the following: Aubrey, Forney/Heartland, Celina, and McKinney. Check out the prices of those areas below:

Buyer’s Market or Seller’s Market

The month’s of inventory determine whether we are in a buyer’s market or a seller’s market. If there is 6 months of more of inventory, we are in a buyer’s market. That means there is a home out there for at least two buyers. Homes aren’t scarce and the options are there. If we have less than 6 months of inventory, we are in a seller’s market. That means inventory is tight and you are more than likely to see multiple offers.

If we go back and compare those cities that we just looked at (Aubrey, Celina, McKinney, and Forney), you will see what type of market these areas are in. Each city will have different stats which is why it is best to get very specific on 3-4 areas.

If we look at DFW as a whole, you will see that the overall metroplex is still in a seller’s market with 3.4 months of inventory which is up 17.2% from May 2018.

This is just the basics of a buyer’s consultation with New Avenue Realty Group. We help clients get from curiosity to possibility. Let’s get you into your new avenue in the metroplex. Book an appointment with me at atfowlerrealtor.appointy.com.

Renting Vs Owning, What Is Better For You?

Do you choose to rent or own?

When asked anything in real estate, I always like to give a list of pros and cons. As a Realtor, my job is to help you find the home that best fits what your needs are in the basis of the financial means that you have. We analyze those things based on a one-on-one conversation that we have from the consultation.

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 or Owning, What Is Better for You? | Keeping Current Matters

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!

One 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 paymentclosing 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, contact me at 972-813-9788 or atfowler@NewAvenueRealty.com so that I can help you review your current situation!

7 Easy Ways to Increase Your Curb Appeal

If you’re preparing to sell your home, curb appeal should be a priority. When someone is walking by or coming to your open house, the outside of your home is the first thing they will see. If there is no curb appeal, potential buyers may never even set foot in your home. Instead of ignoring your home’s outdoor appearance, consider making some budget-friendly changes that can add appeal to your home without breaking the bank. 

1. Landscape Your Walkway

Create a smooth transition from the street to your front door. A clear path will allow a potential buyer’s eye to look straight to your home, rather than stopping to concentrate on unkept landscaping. Clean your walkway and create groupings of mid-size shrubby and florals close to the road and by your front door.

2. Hang a Wreath

Adding a wreath to your front door is a simple way to make your home look more welcoming. Consider a DIY wreath that is easy to create and cost-friendly.

3. Treat Your Lawn Better

Consistent upkeep is the best way to save money when it comes to your front lawn. You should apply a weed-and-feed treatment to your lawn as often as needed to supply the necessary nutrients while also killing off any weeds. Be sure to provide proper maintenance to your lawn mower and keep your mower blade sharp.

4. Add Porch Appeal

If you have a front porch, add an affordable outdoor furniture set. This can create an inviting space that will make potential buyers want to try it out!

5. Consider Color Accents

If your door or shutters need a fresh paint job, consider finding an accent color that will help your house pop. It doesn’t have to be extreme, just enough to catch the eye of a potential buyer. Be sure to test your paint color alongside your siding or brick before fully committing.

6. Restore Your Driveway

Your driveway can be a major eyesore if it isn’t taken care of. Fill any holes or cracks in your asphalt and apply a fresh sealer. A driveway that looks new is sure to help your curb appeal.

7. Power Wash Your Home

Sometimes, all your home needs is a good cleaning. If you don’t own power washer, rent one from your local home improvement store and take a weekend to power wash your entire exterior. Even if your home is relatively new, a deep cleaning can make it look like a new build. 

How to Put Your Housing Cost to Work for You!

There has been a lot written about the benefits of homeownership. One benefit that continues to rise to the top is the added wealth homeowners gain simply by paying their mortgage while their home increases in value over time.

The National Association of Realtors (NAR) recently broke down the equity gained from price appreciation and principal payments in their Economists Outlook Blog. Homeowners who purchased their homes five years ago have already gained almost $80,000 in equity over that time with 80% of the gains coming from price appreciation.

For a homeowner who purchased their home 30 years ago, they have gained nearly $250,000 in equity with 70% coming from price increases. The full results can be seen in the chart below.

How to Put Your Housing Cost to Work for You | Keeping Current Matters

According to the Home Price Expectation Survey, a family who purchased a median priced home this January can expect to gain more than $42,000 over the next five years simply from price appreciation alone.

Bottom Line

Your home is one of the only investments you can live inside as you pay it off over time. If you are ready to use your housing costs to build wealth, contact New Avenue Realty Group to determine how to make your dream a reality.

📞 972.813.9788

📧 atfowler@newavenuerealty.com

📆 atfowlerrealtor.appointy.com

Do 46 Millenials Know They Are Mortgage Ready?

Many have written about the millennial generation and whether or not they, as a whole, believe in homeownership as part of attaining the American Dream.

Millennials have taken longer to obtain traditional milestones than the generations before them, such as getting married, having kids, and buying a home. However, that does not mean that they do not still aspire to achieve those things.

History shows that people tend to buy their first home around age 30. Nearly 5 million millennials will turn 30 in the next two years. This will continue to fuel demand for housing.

This is also one of the many reasons why the millennial homeownership rate has continued to grow over the past few years. 48.4% of Americans between the ages of 30-34 now own a home.

There are over 46 million millennials (33% of the generation) who are considered “Mortgage Ready”, meaning they meet the qualifications to be approved for a mortgage today!

  • a FICO Score ≥ 620
  • a Back-End Debt to Income Ratio ≤ 25%
  • no Foreclosures or Bankruptcies in the last 7 years
  • no severe delinquencies in 1 year

Rob Chrane, CEO of Down Payment Resource, commented on the findings of the report,

“We now know there are millions of buyers with the income & credit necessary to qualify to buy a home. The biggest question is:

Do they know it? …Unfortunately, many renters don’t investigate homeownership simply because they don’t believe it’s an option.”

The good news is that more and more millennials are realizing that they can afford a home now. Even so, more can be done to increase awareness of low down payment programs to attract even more of this generation.

New data from realtor.com shows that in December, millennials accounted for 42% of all new home loans originated in the month. This is more than any other generation.

Bottom Line

If you are one of the many millennials who may be “Mortgage Ready” but are unsure what your next steps should be, contact New Avenue Realty. We can help guide you on your path to homeownership.

📧 info@newavenuerealty.com

📞 972-813-9788

📆 atfowlerrealtor.appointy.com

Refresh Your Space for Spring!

When the seasons change or I’m feening for a new change in my home, I’m always looking for new pieces for my home. Today, I took my talents to Target. I love shopping with Target on Sundays because the new Cartwheel deals hit on that day. What is even special is that Target has spring deals online that can save me up to 40% on select deals.

Check out some of my new Target finds:

Target’s Project 62 has teamed up with Leanne Ford to bring new lighting for a limited time.

Target’s Project 62 has teamed up with Leanne Ford to bring new lighting for a limited time.

Pillows are my favorite way to update my space.

Plus, if you shop online, you can save up to 25% on home items + an extra 15% on rugs and lighting with code March. Valid 3/3-3/9. Click the link below to shop Target. Remember, orders $35+ have free shipping too.

SHOP TARGET WITH DREA

Disclaimer: The links contain affiliate links and will result in a commission for purchases.