Buying Your First Home? Simple Tips to Keep the Process Running Smoothly

While buying your first home can be nerve-racking, paying attention to the following items will go a long way toward putting your mind at ease as you make your way through the process.

Get your finances in check. Just because you have money in the bank doesn’t mean you will qualify for a mortgage. Meet with a financial advisor and get a handle on what you can truly afford. If you want to do the numbers yourself, make sure to create a comprehensive list of every possible expense—loans, student debt, monthly expenses, etc.—and don’t rely on your lender to figure out a total for you. Lenders look at your debt-to-income ratio and not necessarily your day-to-day spending habits.

Choose an agent. Buying a new home will likely be one of the biggest decisions of your life, therefore, it’s important to take your time when choosing an agent. Not only do you want someone who is willing to communicate on your terms, you want to be sure your agent knows the neighborhoods you’re interested in. Whether it’s the most experienced agent—or an eager up-and-comer—do your homework before choosing an agent to guide you through the process.

Get pre-qualified. Once you know how much home you can afford, be sure the bank agrees by getting pre-qualified for a loan. While the pre-qualification process is not a guarantee that the lender will offer you funding, it does take into consideration your credit score and income level in order to determine how much the lender might be willing to offer through a mortgage program. The next step is to get a prequalification letter so that when you find your dream home, you can offer proof that you can get the financing to buy it.

Shop for lenders. Mortgage rates are still low, but that doesn’t mean you should jump at the first one that comes along. Compare and contrast at least three to five lenders to find the one that best serves your interests. It’s also important to disclose that you’re a first-time buyer, as it could potentially make a difference in the types of programs a lender offers you.

Seek out first-time homebuyer programs. There are a slew of programs specifically designed to assist first-time homebuyers with benefits such as down-payment assistance and no closing costs. Others offer first-time buyers competitive interest rates that are designed to make borrowing easier. Be sure to understand the various resources that are out there to help you.

To learn more about buying your first home, contact me today.

Weekly Real Estate Market Update

According to the Federal Reserve’s Flow of Funds report released This Week in Real Estate the value of U.S. owner-occupied homes increased to a record of $29.2 trillion in the third quarter of 2019. Home values rise as mortgage rates remain low. Fannie Mae believes the average fixed rate in 2020 will probably be 3.6% and if so, will be the lowest annual average ever recorded in Freddie Mac records going back to 1973. Below are a few highlights from the first full week of 2020…

* U.S. Home Values Rise to Record $29.2 Trillion, Fed Says. The value of all U.S. owner-occupied homes increased to a record $29.2 trillion in the third quarter, according to a Federal Reserve report known as the Flow of Funds. That was a gain of 4.2% from a year earlier, the slowest annualized increase since 2012. The collective value of U.S. homes is now 21% higher than the bubble peak reached in 2006. The Fed’s tally of home values for all U.S. residential real estate, whether occupied by homeowners or not, was $32.9 trillion, the report said.

Full Story… https://www.housingwire.com/articles/u-s-home-values-rise-to-record-fed-says/

* U.S. Mortgage Debt Hits a Record $15.8 Trillion. Outstanding U.S. mortgage debt rose to $15.8 trillion in the third quarter of 2019, according to the Federal Reserve. The biggest chunk of debt was held on homes, at $11.1 trillion, followed by commercial, with $3 trillion of loans, multifamily at $1.6 trillion and farms at $254.1 billion, according to the Fed data. Mortgage debt is rising as U.S. real estate values gain. Low mortgage rates boost real estate prices, and hence the volume of loans, because cheaper financing means buyers qualify for higher-balance mortgages and can bid more for properties they want. The average fixed rate probably will be 3.6% in 2020, which would be the lowest annual average ever recorded in Freddie Mac records going back to 1973.

Full Story… https://www.housingwire.com/articles/u-s-mortgage-debt-hits-a-record-15-8-trillion/

* Homebuying Sentiment Up Sharply From 2018. Fannie Mae’s Home Purchase Sentiment Index (HPSI) finished out the year with little change from November to December, but with a strong increase over the December 2018 version. “The continued strength in the HPSI attests to the intention among consumers to purchase homes. This is consistent with the Fannie Mae forecast for 2020,” said Doug Duncan, Senior Vice President and Chief Economist. “The HPSI hit and remained near an all-time high in 2019, driven by the 16-percentage point year-over-year increase in the share of consumers believing it is a good time to buy. The HPSI’s strength supports our prediction of a healthy housing market in 2020, as well as consumers’ appetite and ability to absorb the expected increase in entry-level inventory.”

Full Story… http://www.mortgagenewsdaily.com/01072020_national_housing_survey.asp

VA, Conventional, FHA, USDA? Which Loan is Right For You?

Whether you’re a first time buyer or a seasoned home buyer, there are several loan options available. I chat with local lender Todd Zimmerman of Finance of America to breakdown the details of some of the more popular loans including FHA, USDA, VA and Conventional loans. Let’s take a quick look!

Call, text, email or contact me on my website and I’ll be happy to help you start your home search. I work with some of the best lenders in the area to make sure you’re taken care of every step of the way. Excellent customer service is at the HEART of what I do!

541-579-9213 / aimeehartwig@bhhsrep.com / aimeehartwigrealestate.com

How to Start the Lending Process

Starting the lending process is the first step to owning a home. Did you know you can buy a home with NO MONEY DOWN? Did you know that starting the lending process is FREE?

I enlist the help of an experienced lender to explain the basics of lending and common misconceptions about the home buying process.

Send me an email, text or give me a call and I will be happy to answer all of your real estate questions and recommend some of my most trusted lenders to get you on the path to homeownership.

*aimeehartwigrealestate.com / 541-579-9213 / aimeehartwig@bhhsrep.com*

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Owning vs Renting

Emotional & Financial Benefits

Owning vs. Renting??? It’s a tough decision, especially if you’re a first time homebuyer. There’s no doubt that homeownership comes with strong emotional benefits. Homes are a place to feel secure, build a future and raise a family. Not to mention, the immense personal satisfaction that comes with homeownership.

Beyond the emotional benefits, there are strong financial reasons to buy a home.

A home generally builds equity over time through the combination of mortgage payments and appreciation.
A portion of your mortgage interest and real estate taxes are tax-deductible.
You may leverage your money – even though your down payment may be 20% of the home’s purchase price, you receive the full value of any appreciation.
In many markets, including ours, the cost of ownership can be less than renting.
You may strengthen your credit with your ongoing and timely mortgage payments.
You may pass on your home to your children.
And, as a homeowner, you are free to renovate, remodel, repair and repaint your property – you’re never dependent on a landlord to get the job done right.

A Cost Analysis

Western Title & Escrow in Eugene recently released a short graphic that compares the costs of renting to buying over a given amount of time.

Photo courtesy of Western Title & Escrow, Eugene, OR

If you buy a $250,000 home with 10% down and an annual interest rate of 3.75%, in 2 years 6 months you will break even. Meaning you will have paid as much in rent as you would have to own the house. After that time, the benefit of ownership exceeds the benefit of renting through the financial gains made from tax deductions and by building equity through increased principal and appreciation.

If you are renting, NOW is the time to consider BUYING. I know the process can be a little scary for first-time buyers, but I’m happy to help you get started. I remember the first house I bought and at the time I didn’t think I would even qualify for a loan based on my income. I was wrong. It’s easier than you think and there are so many great loan options available now. Not to mention, mortgage rates are extremely low. The timing is perfect!

Give me a call, an email or drop me a message on social and I will be happy to recommend some of my favorite and most trusted lenders. Together we will walk you through the process. You have nothing to lose and EVERYTHING to GAIN!

I’m here to help and happy to do it!

541-579-9213 / aimeehartwig@bhhsrep.com / aimeehartwigrealestate.com

Real Estate Market Update

For the first time since at least World War II, mortgage rates and the unemployment rate are below 4-percent. As a result, some economists are predicting home prices will increase at a faster pace over the next 12 months than they have in 2019.

Corelogic says home prices will likely increase by 5.8% through August 2020. That’s a faster pace than the 3.8% seen in August of this year.

First-time homebuyers, Generation Z homebuyers and single female homebuyers are taking full advantage of this fifty-year low…

46-percent of all loans Freddie Mac has purchased this year came from first-time homebuyers, while there has been a 200% and 500% increase in Gen Z and single female homebuyers, respectively.

* Labor Costs Likely to Push Home Prices Higher. In an article in CoreLogic’s Insights blog, Nothaft quotes National Association of Home Builder (NAHB) figures that say about 60 percent of a new home’s sales price reflects the construction costs of the home. The major components of building costs are those associated with purchasing and preparing a lot, acquiring permits and inspections, hiring labor and buying materials. There was a significant price run-up in the two major components of framing, lumber and steel. Labor costs are another matter. Much has been written about the shortage of construction labor. Many workers left the trades during the Great Recession and the industry has had trouble luring young people and especially young women into the field. Vacancies as a percent of construction job are now at the highest level in 18 years and compensation has risen accordingly. It is up 3 percent this year, about double the rate of inflation. Worker retention is an issue as well. Nothaft says rising land and labor costs will probably offset any savings builders might realize from lower lumber prices and overall costs for a new home will continue to rise.

Full Story… http://www.mortgagenewsdaily.com/10092019_residential_construction.asp

* Mortgage Rates Drop Again – And First-Time Homebuyers Take Full Advantage. Mortgage rates dropped again, and according to Freddie Mac, the downward spiral has first-time buyers gaining ground. In fact, of all the loans Freddie Mac has purchased in 2019, 46% came from first-time homebuyers – a two-decade high for the company. According to representatives at online mortgage provider Better.com, the lender has seen a “huge uptick” in first-time homebuyers as well. There’s also been a 200% increase in Generation Z homebuyers (born 1997-2012) and a 500% increase in single female homebuyers aged 30-40. As Sam Khater, Freddie Mac’s chief economist, reported yesterday, “The fifty-year low in the unemployment rate, combined with low mortgage rates, has led to increased homebuyer demand this year. Much of this strength is coming from entry-level buyers.”

Full Story… https://www.forbes.com/sites/alyyale/2019/10/11/mortgage-rates-drop-againand-first-time-homebuyers-take-full-advantage/#4691dbabeb0d

* Where Have All the Affordable Homes Gone? Housing affordability has been a growing concern in the housing ecosystem, but why is it such a problem? While home prices have been steadily rising for many years, Nothaft observed, “We find that lower-priced homes have appreciated much, much more than higher-priced homes.” Since May 2018, prices of homes more than 25% above the median have risen 3%, while homes in the lowest tier, those more than 25% below the median, have risen almost 5.5%. As demand rises on affordable homes, the supply has become increasingly constrained. Nothaft noted, “New construction, while picking up gradually over the last few years, is still well below what it was prior to the housing boom.” The current inventory for homes is tightest in the lowest price tiers, particularly in those between 50 and 100 percent of the median home price. On the affordable housing shortage, Nothaft concluded, “I don’t see that changing any time soon unless we find ways to reduce the cost of producing or delivering lower-priced homes into the marketplace and reducing some of the regulatory costs.” In the meantime, with demand rising on an increasingly scarce product, we can expect prices to continue rising on affordable homes for the foreseeable future.

Full Story… https://www.corelogic.com/blog/2019/10/where-have-all-the-affordable-homes-gone.aspx

AimeeHartwigRealEstate.com
541-579-9213

This Week in Real Estate

September 10th, 2019

Mortgage Rates May Tumble to Record 3.3% by 2019’s End. Fixed mortgage rates could fall to 3.3% by the end of the year as the nation’s economy slows, according to Lawrence Yun, chief economist of the National Association of Realtors. That would put the rate just a smidge below the 3.31% seen in November of 2012 – the lowest average for a 30-year fixed mortgage in Freddie Mac data going back to 1971. “But lower rates may not help with affordability because home prices are re-accelerating higher, easily above the latest wage growth. Housing inventory has recently stopped rising, putting upward pressure on home prices of moderately priced homes,” Yun said. “But there is still a time to get the economy into a higher gear with increased home building of affordable homes and lessening trade tensions.”

Full Story… https://www.housingwire.com/articles/50102-nars-yun-mortgage-rates-may-tumble-to-record-33-by-2019s-end

* A Smaller Share of Prospective Buyers is Actively Looking For a Home. A national poll in the second quarter of 2019 revealed that 12% of adults are thinking about buying a home in the next 12 months. Of that group, 41% are already actively engaged in the process of finding a home to purchase, which is a smaller share than a year earlier, when 50% of prospective buyers were engaged in the search process. This finding suggests that the lower mortgage rate environment of 2019 has not had the expected effect of nudging more people to start looking for a home to buy. Across generations, about 40% of Millennials, Gen X’ers, and Boomer buyers have moved beyond just planning and begun the home search, compared to only 21% of Senior buyers. Geographically, prospective buyers in the Northeast are the most likely to be actively looking for a home (47%), followed by those in the West (43%), and those in the Midwest and South (both 39%). How long are buyers who are actively engaged in the search process hunting for a home? In the second quarter of 2019, 45% had been at it for less than 3 months while the other 55% had been trying to find the right home for 3 months or longer. Those shares were essentially unchanged from a year earlier, when they stood at 46% and 54%, respectively.

Full Story… http://eyeonhousing.org/2019/09/a-smaller-share-of-prospective-buyers-is-actively-looking-for-a-home/

* Residential Construction Spending Drops Further Off 2018 Pace. Construction spending inched up by 0.1 percent in July, to a seasonally adjusted annual rate of $1.289 trillion compared to $1.288 trillion in June. The July figure is 2.7 percent lower than the rate of spending in July 2018. On an unadjusted basis, spending for the month was $119.214 billion and for the year-to-date (YTD) stands at $733.782 billion, down 2.1 percent from the $749.888 billion spent during the first seven months of 2018. Private sector spending on residential spending was at an annual rate of $506.743 billion compared to $503.515 billion in June, an increase of 0.6 percent but down 6.6 percent from the prior July. Single family construction was at a rate of $268.138 billion a 1.4 percent month-over-month gain but a decrease of 8.5 percent on an annual basis. For the YTD, total residential spending has totaled $289.891 billion, $150.219 billion of it on single-family houses. During the same period in 2018 the respective totals were $316.929 billion and $164.529 billion. These represent declines of 8.5 and 8.7 percent.

Full Story… http://www.mortgagenewsdaily.com/09042019_construction_spending.asp

aimeehartwigrealestate.com / 541-579-9213 / aimeehartwig@bhhsrep.com