Sunrise Homes & Renovations, Inc.

Down Payment Assistance Programs May Make Homeownership More Affordable

by

Down Payment Assistance Programs May Make Homeownership More AffordableThere are many people who are currently looking to purchase a home while interest rates are relatively low; however, there are many homeowners who feel like they do not have a strong level of financial understanding when it comes to the process of purchasing a home.

If homeowners don’t have the financial knowledge base to effectively evaluate their options, they might have trouble figuring out what they can truly afford. For example, how much money do homeowners need to save for a down payment? There are a lot of down payment assistance programs available at local, state, and regional levels.

Resources Are Available For First Time Homebuyers

There are many down payment assistance programs that have been made available specifically for first-time homebuyers. Many people who are buying a home for the first time might not be able to put 20 percent down when lenders ask for it. That is why down payment assistance programs might be able to help homebuyers bridge the gap between what they have and what they need. At the same time, there are other programs available as well.

There Are Programs Available for Non-First Time Homebuyers As Well

There are also down payment assistance programs that are open to people who aren’t first-time homebuyers as well. For example, many people are thinking about relocating because they work from home. They might want to stretch their money farther and purchase more space. Some rural areas have USDA loans that do not require a down payment. USDA loans might even be available in the suburbs. These loans might be easier for homebuyers who might not have a large chunk of money saved up for a down payment. Reaching out to these down payment assistance programs could be a smart move.

Understand All Options Available For Down Payment Assistance

Ultimately, there are a lot of down payment assistance programs that could make it easier for potential homebuyers to purchase a home. With many homeowners looking to purchase a home now before interest rates rise, it is important to explore all options available. This includes looking at down payment assistance programs that might make it easier for homeowners to afford a home.

A Review Of Government Vs Conventional Mortgages

by

A Review Of Government Vs Conventional MortgagesThere are two broad categories of mortgages. The first is government mortgages, which include USDA, FHA, and VA loans. These loans are backed and insured by the United States government. The other category is conventional mortgages. These are mortgages that are insured by private lenders, such as banks and credit unions. What are the differences between these two loan options?

Government Mortgages

The qualifications for government mortgages are usually more lenient than conventional loans. For example, FHA mortgages are usually backed by the Federal Housing Administration. FHA loans could be a smart option for borrowers who might not be able to make a large down payment or who are taking out a loan for the first time. In addition, borrowers with higher debt to income ratios and lower credit scores might also be able to qualify for an FHA loan. While it is possible to qualify for an FHA loan with a lower down payment mortgage insurance might still be required.

Another government mortgage is a VA mortgage. This is a mortgage that is insured by the United States government that is available to members of the military. In order to qualify for a VA loan, a Certificate of Eligibility (COE) is required. While VA loans do not charge mortgage insurance, an upfront funding fee could be charged if certain requirements are not met.

Conventional Mortgages

Conventional mortgages refer to home loans that are created and financed by unions, banks, credit unions, and other lenders not associated with the United States government. When compared to government loans, they usually have stricter guidelines. Borrowers seeking a conventional mortgage usually must have a higher credit score, a larger down payment, and a lower debt to income ratio. If borrowers are not able to put 20 percent down, they might be charged private mortgage insurance (PMI); however, some borrowers might be able to negotiate lender-insured PMI if they are willing to accept a higher interest rate.

Speak To A Loan Officer

The right loan for one person might not be the right loan for someone else. Everyone should speak to a loan officer to figure out which type of home loan is right for them. That way, everyone can negotiate favorable terms on a home loan.

Taking A Closer Look At Affordability: Renting And Buying

by

Taking A Closer Look At Affordability: Renting And BuyingThere are many people who are looking at the housing market wondering if now is the time to make the jump from renting to owning. At the same time, is it more affordable to rent a home? Or, is it a smarter move to buy a home? Even though many people like the comfort of renting because it is someone else’s problem if something goes wrong, waiting too long to purchase a home could be costly. Here are a few of the most important points you need to keep in mind when it comes to renting versus buying a home.

Renters Spend A Higher Percentage Of Their Income On Housing

First, renters usually put a higher percentage of their income toward housing than homeowners. When looking at the numbers, people may believe that the percentage is higher for renters purely because people who own homes make more money; however, this is not necessarily the case. People who rent still spend a greater percentage of their monthly income on housing than people who own a home.

Renters Often Have Trouble Investing In Other Assets

One of the major advantages of owning a home is that it is going to appreciate over time. Not only is a house an investment, but because homeowners spend less of their money on housing, they have money to invest in other assets. For example, someone who spends a lot of money on rent might not be able to invest in retirement accounts, such as a 401k. Homeowners are not only building equity in their homes but also investing money elsewhere.

Rent Goes Up While Mortgages Stay The Same

A lot of homeowners decide to take out a 30-year fixed mortgage, which means that their mortgage payments are going to stay the same throughout the life of the loan. Renters are more vulnerable to cost increases. Whenever someone renews a lease, rent payments usually go up. Therefore, this projects vastly different economic futures for homeowners versus renters. With a home loan, the only expenses that might go up are taxes and insurance. In contrast, renters are subject to the supply and demand laws of the rental market.

Now might be the time to make the jump to homeownership.

Where Is The Housing Market Going Next?

by

Where Is The Housing Market Going Next?There are many people wondering where the housing market is going next. While interest rates might be low, attracting a lot of buyers, there are some potential homeowners who are concerned about the current demand in the housing market. This could be driving up home prices, causing some people to pause. Furthermore, some people might be hesitant to sell because they are worried they might have a hard time finding a new home in the current market.

What do the experts have to say?

Homes Might Start To Sell Faster

As the weather begins to warm up, the traditional moving season is unfolding. A lot of people like to wait until the late spring and early summer to move because they are worried about pulling their kids out of school. Therefore, there is a great chance that homes may sell faster between now and the middle of the summer.

The Impact Of The Pandemic

During the past year, a lot of sellers have been hesitant to list their homes because they were concerned about their personal safety. They wanted to expose themselves to as few people as possible. Now that many people are getting vaccinated, some experts believe that sellers might be more open to selling their homes now. As a result, more inventory could come on the market, helping to deal with the demand.

Competition Could Start To Ease Up With New Home Construction

Another trend that many experts are looking at involves new home construction. During the pandemic, global supply chains were strained, making it hard for construction workers to get the materials they needed to build new homes. Now that many businesses are starting to open up again, it is possible that new home construction could start to catch up with current demand. This might also help to ease competition among buyers, adding to the supply.

The Future Of The Housing Market Is Bright

Regardless, the future of the housing market is bright for buyers and sellers alike. Right now, there are a lot of people who are looking for homes, which is great for sellers. As more inventory arrives on the market, buyers will have more options available as well.

Do You Have Enough Of A Down Payment Saved Up?

by

Do You Have Enough Of A Down Payment Saved Up?If you are planning on purchasing a home in the near future, you need to make sure you have enough money saved up. While there are a lot of expenses that go along with purchasing a home, the biggest expense is the down payment.

The common belief is that people have to put 20 percent down; however, even if you don’t have 20 percent saved up, you might still be able to purchase a home. It will depend on whether you can get a lender to provide a loan that is greater than 80 percent of the purchase price of a home. If you have a strong credit history, you may be able to get one.

Getting A Loan With Less Than 20 Percent Down

First, many lenders realize that many people do not have enough money saved up to put down 20 percent. After all, this could be tens of thousands of dollars.  Although some people might be able to get a loan with only 10 percent down, those with outstanding credit might even qualify for a larger loan. There are certain people, such as veterans, who might have other options outside of conventional loans that might open other doors. If you are looking to get a home loan for less than 20 percent down, you will want to check all of your options.

How To Get A Loan For Less Than 20 Percent Down

Particularly if you are a first-time homebuyer, you might not know how to get a loan for less than 20 percent down. First, you need to have a strong credit score. If the lender is giving you a larger loan, they will want to make sure you can pay it back. Having a strong credit score can prove this to them. You may want to check your credit report ahead of time to correct any inaccuracies.

Second, you need to take a look at your debt to income ratio. If you have a lot of debt, consider paying this down before applying for a home loan.

Finally, trust an experienced lender to guide you through the process. You might be able to get a home loan for less than 20 percent down.

Deciding Whether To Move or Refinance: Which Is The Better Option?

by

Deciding Whether To Move or Refinance: Which Is The Better Option?There are a lot of people who are wondering if now is the right time to move or refinance their current home loan. With interest rates still favorable, a lot of homeowners have the potential to save a lot of money if they are able to secure a home loan with a lower interest rate. There are two ways homeowners can secure a home loan with a lower interest rate. The first is to refinance. The second is to move. Which option is better? There are a few key points to keep in mind.

Taking A Closer Look At Refinancing

There are a lot of homeowners who have an abundance of equity currently built up in their homes, making this a great time to refinance. With a refinance, there are multiple options available. Some homeowners might refinance to access the equity in their homes, allowing them to complete a project. Some homeowners might refinance in an effort to pay off their home loan sooner. If homeowners are trying to access more equity, or are trying to shorten the term of the loan, then refinancing might be the smart move.

Looking At The Option Of Moving

The other option is to get a new home loan entirely by moving. This is an attractive option for homeowners who might have a dream house they would like to move to. In particular, any homeowner who currently has a home loan with a high interest rate should consider moving into their dream home now. Because mortgage rates are low right now, this is a chance for homeowners to move into a larger house while keeping their mortgage payments the same or less by obtaining a lower interest rate.

Every Situation Is Different

In the end, every situation is different. Because interest rates right now are so low, now could be the time for homeowners to consider moving or refinancing. Switching to a home loan with a lower interest rate could save tens of thousands of dollars over the life of the loan. Anyone with questions or concerns should reach out to a professional for help.