As you set out on your homebuying journey, you likely have a plan in place, and you’re working on saving for your purchase. But do you know how much you actually need for your down payment?
If you think you have to put 20% down, you may have set your goal based on a common misconception. Freddie Macsays:
“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”
Unless specified by your loan type or lender, it’s typically not required to put 20% down. According to the Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. It may sound surprising, but today, that number is only 13%. And it’s even lower for first-time homebuyers, whose median down payment is only 7%(see graph below):
What Does This Mean for You?
While a down payment of 20% or more does have benefits, the typical buyer is putting far less down. That’s good news for you because it means you could be closer to your homebuying dream than you realize.
If you’re interested in learning more about low down payment options, there are several places to go. There are programs for qualified buyers with down payments as low as 3.5%. There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants.
To understand your options, you need to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like downpaymentresource.com. Be sure to also work with a real estate advisor from the start to learn what you may qualify for in the homebuying process.
Bottom Line
Remember: a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect to start the conversation and explore your down payment options.
As we move into 2022, both buyers and sellers are wondering, what’s next? Will there be more homes available to buy? Will prices keep climbing? How high will mortgage rates go? For the answer to those questions and more, we turn to the experts. Here’s a look at what they say we can expect in 2022.
Odeta Kushi, Deputy Chief Economist, First American:
“Consensus forecasts put rates at about 3.7% by the end of next year. So, that’s still historically low, but certainly higher than they are today.”
“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.”
Lawrence Yun, Chief Economist, National Association of Realtors (NAR):
“With more housing inventory to hit the market, the intense multiple offers will start to ease. Home prices will continue to rise but at a slower pace.”
George Ratiu, Manager of Economic Research, realtor.com:
“We also expect a growing number of homeowners to bring properties to market, taking some pressure off high prices and offering buyers more options.”
“Strong demographic demand will continue to act as the wind in the housing market’s sails.”
What Does This Mean for Buyers?
Hope is on the horizon for 2022. You should see your options grow as more homes are listed and some of the peak intensity of buyer competition starts to ease. Just remember, rising rates and prices are a great motivator for you to find the home of your dreams sooner rather than later so you can buy while today’s affordability is still in your favor.
What Does This Mean for Sellers?
Make no mistake – this sellers’ market will remain in 2022 as home prices are projected to continue climbing, just at a more moderate pace. Selling your house while buyer demand is so high will truly put you in the driver’s seat. But don’t wait too long. With more listings projected to become available, your ideal window of opportunity to stand out from the crowd won’t last forever. Work with an agent who knows your local market and current inventory conditions to ensure you have the support you need to make an educated and informed decision about selling in the coming year.
Bottom Line
If you’re thinking of buying or selling, 2022 may be your year. Let’s connect to discuss your goals and the unique opportunities you have in today’s housing market.
As a buyer in a sellers’ market, sometimes it can feel like you’re stuck between a rock and a hard place. When you’re ready to make an offer on a home, remember these five easy tips to help you rise above the competition.
1. Know Your Budget
Knowing your budget and what you can afford is critical to your success as a homebuyer. The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. As Freddie Mac puts it:
“This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.”
Showing sellers you’re serious can give you a competitive edge, and it helps you act quickly when you’ve found your perfect home.
2. Be Ready To Move Fast
Homes are selling quickly in today’s competitive housing market. According to the Existing Home Sales Reportfrom the National Association of Realtors (NAR):
“Eighty-three percent of homes sold in November 2021 were on the market for less than a month.”
When houses are selling this fast, staying on top of the market and moving quickly are key. Your agent can help you put together and submit your best offer as soon as you find the home you want to buy.
3. Lean on a Real Estate Professional
No matter what the housing market looks like, rely on a trusted real estate advisor. As Freddie Mac also notes:
“The success of your homebuying journey largely depends on the company you keep. . . . Be sure to select experienced, trusted professionals who will help you make informed decisions and avoid any pitfalls.”
Agents are experts in the local real estate market. They have insight into what’s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller needs can help your offer stand out.
4. Make a Strong, but Fair Offer
According to the latest Realtors Confidence Indexfrom NAR, 40% of offers today are above the list price. In such a competitive market, emotions and prices can run high. Having an agent to help you submit a strong, yet fair offer is critical in these situations. Your agent can help you understand the market value of the home and recent sales trends in the area.
5. Be a Flexible Negotiator
When putting together an offer, your trusted real estate advisor will help you consider which levers you can pull, including contract contingencies (conditions you set that the seller must meet for the purchase to be finalized). Of course, there are certain contingencies you don’t want to give up. Freddie Mac explains:
“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”
Bottom Line
Today’s competitive landscape makes it more important than ever to make a strong offer on a home. Let’s connect to make sure you rise to the top along the way.
Once you’ve found your dream home and applied for a mortgage, there are some key things to keep in mind before you close. It’s exciting to start thinking about moving in and decorating your new place, but before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.
Here’s a list of things you shouldn’t do after applying for a mortgage. They’re all important to know – or simply just good reminders – for the process.
1. Don’t Deposit Cash into Your Bank Accounts Before Speaking with Your Bank or Lender.
Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
2. Don’t Make Any Large Purchases Like a New Car or Furniture for Your Home.
New debt comes with new monthly obligations. New obligations create new qualifications. People with new debt have higher debt-to-income ratios. Since higher ratios make for riskier loans, qualified borrowers may end up no longer qualifying for their mortgage.
3. Don’t Co-Sign Other Loans for Anyone.
When you co-sign, you’re obligated. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.
4. Don’t Change Bank Accounts.
Remember, lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.
5. Don’t Apply for New Credit.
It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be impacted. Lower credit scores can determine your interest rate and possibly even your eligibility for approval.
6. Don’t Close Any Credit Accounts.
Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants of your score.
Bottom Line
Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. The best plan is to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.
Here’s the Oregonian/OregonLive’s 2021 edition of the most viewed listings according to web traffic data provided by Realtor.com:
84 W. Duane St. in Astoria in Clatsop County sold for $244,000 on Dec. 10, 2021.Kati Perry/eXp Realty
Movie location:84 W. Duane St. in Astoria sold for $244,000 on Dec. 10, 2021. The fixer-upper with views of the Columbia River was a location in the 1986 movie “Short Circuit.”
The 1889 farmhouse in Clatsop County has two bedrooms, two bathrooms and 1,938square feet of living space. The 7,405-square-foot lot is surrounded by natural privacy, said listing agent Kati Perry of eXp Realty.
“This gem is waiting for its new owners to complete the remodel process and make this beauty their own,” added Perry, who sold the property “as is,” with the seller refusing to make any fixes or improvements.
80644 Highway 101 in Cannon Beach in Clatsop County sold for $4,995,000 on Sept. 29, 2021. Dirk Hmura/Jessica Corcoran/Eleete Real Estate
The contemporary-style house in Clatsop County was built in 2013 at a cost of more than $6 million, according to listing agent Dirk Hmura of Eleete Real Estate.
Bora Architecture & Interiors designed the glass, slab stone and steel structure to connect to its one-acre setting with access to the beach.
The contemporary house with a daylight basement, built in 1979 on 0.36 acres in Jackson County, has two living rooms, four bedrooms, 2.5 bathrooms and 3,144 square feet of living space.
“This home is a great fixer with lots of potential,” said listing agent Bradley Farrell of Coldwell Banker Cutting Edge. “This house will not finance due to foundation issues.”
84154 Lorane Highway in Eugene in Lane County last sold for $100,000 in 2017.Todd Cranmer/Eugene’s Alternative
The insulated, reinforced concrete monolithic dome, built in 2009 on 3.78 acres of sloped and wooded land in Lane County, has one bedroom, one bathroom and 855 square feet of living space.
“Cash offers only. Buyer to do due diligence,” stated the listing.
3860 W. Prospect Ave. in Hood River is for sale by owner at $1.5 million.Realtor.com
The towering modern mansion, built in 2001 on 9.74 gated acres in Multnomah County, was designed by architect Ned Vaivoda, formerly of Thompson Vaivoda & Architects, now TVA Architects.
Three levels of steel and concrete rise from the ground against a ridge. The front of the house has split Travertine walls, reflecting the original owner’s profession as Portland’s leading stone importer.
The back of the dwelling has expansive glass panels. The design offers views of the Cascade mountains while maintaining privacy on the land that borders Forest Park.
The residence has five fireplaces, an indoor pool, sound-proof music room, four bedrooms, 5.5 bathrooms and 11,363 square feet of living space. There is also a guest apartment over the six-car garage.
“A masterpiece of light and design, this architecturally significant Pacific Northwest contemporary house is filled with incredible statements, offering the perfect balance between function and form,” said listing agent Suzann Baricevic Murphy of (W)here, Inc.
1500 Northshore Road in Lake Oswego was listed for $11.5 million.Realtor.com
The waterfront mansion on the lip of Oswego Lake was built in 2006 on 0.66 acres in Clackamas County.
The three-level mansion has a basalt rock exterior and copper-framed windows. Inside are five bedrooms, six bathrooms, three powder rooms and 13,462 square feet of living space.
Two boat lifts can be accessed from inside the residence.
A covered outdoor entertainment area includes a built-in grill and fireplace. Two waterfalls and an infinity pool are part of the landscaping.
2909 S.W. Upper Dr. in Portland Heights sold for $351,500 on March 26, 2021.Lorna Murray/RE/MAX Equity Group
