Tighten that belt and save for a down payment

9 Ways to Save for a Down Payment

9 Ways to Save for a Down Payment

RECBL - Real Estate News

(TNS)-You’ve found the perfect house. Interest rates are still low. There’s just one thing standing between you and your dream home: a down payment.

Don’t abandon your homeownership dreams just yet. Here are nine ways to come up with the cash for your new home.

Pay Off Your Credit Cards
Paying bills will help in your hunt for down payment money. When you carry a credit card balance, the ever-accumulating interest charges mean more of your money goes to the card company each month.

Keep that cash for yourself by cutting your debt load. With the "avalanche" method, you prioritize your debts and pay the most on the one with the highest interest rate. Once that’s paid, shift your focus to the next highest rate and so on. You’ll get the most money-sucking credit card bills out of the way more quickly, freeing up more of your income to go toward building your savings.

Ladder CDs to Boost Savings
Once you have a few extra bucks, put it to work making more money for you. Certificates of deposit are low-risk and relatively accessible. But when interest rates are low, the return isn’t always what a saver hopes. You can maximize the earning power of CDs by opening different certificates at varying maturity dates.

For example, instead of buying one big CD, spread your money into three-month, six-month and one-year certificates. Known as laddering, this gives you flexibility to adjust your savings as rates change. Laddering allows you to lock in when rates are high and when rates are not so good. The process keeps you from being stuck for too long with low earnings.

Use Special Programs
There are many programs for homebuyers struggling to save for a down payment, especially for first-time homebuyers. Borrowers in a wide range of incomes, locales and professional groups may have access to aid from Fannie Mae and Freddie Mac, the government-sponsored offices that buy mortgages and package them as investments. Various nonprofit and community groups also lend a hand to buyers struggling to put money down on a home. And don’t forget about assistance from state agencies.

Tap Your IRA
If you’re looking to buy your first home, let the IRS help. Tax laws allow you to use up to $10,000 in IRA funds as a down payment if you’ve never owned a house. If you’re married and you both are first-time buyers, you each can pull from your retirement accounts, meaning a potential $20,000 down payment.

Even better is the IRS definition of "first-time homebuyer." Technically, you don’t have to be purchasing your very first home. You qualify under the tax rules as long as you (or your spouse) did not own a principal residence at any time during the two years prior to the purchase of the new home. In these instances, Uncle Sam waives the penalty for early withdrawal, but you may owe tax on the money, depending on the type of IRA.

Get a Gift
Aunt Edna always liked you best. Take advantage of that favored family status and ask her to make a present of your down payment. Tax law allows gifts of several thousand dollars a year to be bestowed without tax consequences to either the giver or recipient. The gift-exclusion amount is $14,000 for 2017 and is adjusted annually for inflation. The gift exclusion isn’t limited to relatives. The monetary present can be from anyone, so track down a well-off friend now.

Ask for a Raise
No luck finding a benefactor? Then maybe it’s time to ask your boss for more money. Just make sure you do your homework beforehand and base your request for a salary increase on your accomplishments rather than your needs.

Get a Second Job
Boss turned down your request for a raise? Moonlighting could help you earn the extra money. This option makes the most sense for those who are young and not yet fully established in their professional lives.

Look for Lost Money
Do you have any money stashed somewhere? Around $23.5 billion worth of matured savings bonds remains unredeemed, according to the Treasury Department, ignored by owners and not earning a penny of interest. Make sure your bonds and other investments are still adding to your net worth.

You could also have money languishing in an old bank account somewhere. You can file a claim with the Treasury to claim lost, stolen or destroyed savings bonds, or check the National Association of Unclaimed Property Administrators to see if you have any missing money.

Sell Unwanted Items
You likely have some used furniture you no longer use or old clothes that are no longer in style. Sell it to make a few more bucks to use for your down payment.

You can sell your items on sites like Craigslist, eBay, Facebook and Amazon to turn your trash into someone else’s treasure.

(C)2017 Bankrate.com
Distributed by Tribune Content Agency, LLC

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Why First-Time Homebuyers Are Not Getting In?

Why First-Time Homebuyers Are Not Getting In?

RECBL - Real Estate News

First-time homebuyers are eager to enter the housing market. Getting in the door is another story. First-time homebuyers accounted for 34 percent of sales this year, less than the 35 percent share in 2016 and off an average 39 percent historically, the NAR 2017 Profile of Home Buyers and Sellers shows. First-timers bought costlier, but smaller homes than in 2016, at $190,000 and 1,640 square feet.

The kicker? Many first-timers are in a position to purchase, says NAR Chief Economist Lawrence Yun, but still shut out.

"The dreams of many aspiring first-time buyers were unfortunately dimmed over the past year by persistent inventory shortages, which undercut their ability to become homeowners," Yun says. "With the lower end of the market seeing the worst of the supply crunch, house hunters faced mounting odds in finding their first home. Multiple offers were a common occurrence, investors paying in cash had the upper hand, and prices kept climbing, which yanked homeownership out of reach for countless would-be buyers.

"Solid economic conditions and millennials in their prime buying years should be translating to a lot more sales to first-timers, but the unfortunate reality is that the nation’s homeownership rate will remain suppressed until entry-level supply conditions increase enough to improve overall affordability," says Yun.

Supply is so strained that 42 percent of homebuyers as a whole paid either at or over list price, the Profile shows.

"Many of those in the market to buy a home this year had little room to negotiate," Yun says. "Listings in the affordable price range drew immediate interest, and the winning offer oftentimes had to waive some contingencies or come in at or above asking price to close the deal."

There are factors in favor of first-timers. Homebuyers overall are having an easier time obtaining a mortgage, thanks to lenders loosening standards. Thirty-four percent of first-timers took out a Federal Housing Administration (FHA) loan, up from 33 percent in 2016.

First-timers are also benefitting from the expertise of real estate professionals. Eighty-seven percent of buyers overall relied on a real estate professional in their transaction.

"It’s no surprise a majority of first-time buyers indicated that the top benefits received from their agent were help understanding the buying process (83 percent), pointing out unnoticed property features or faults (60 percent), and negotiating better sales terms (51 percent)," says NAR President Bill Brown. "REALTORS(R) over the past year have helped buyers-and especially first-timers-navigate extremely competitive market conditions where the need to be prepared and act quickly has been paramount to the success of purchasing a home."

There are hurdles. On average, first-timers made a 5 percent down payment, and 25 percent of them reported the most challenging aspect of buying a home was saving for it. The majority of first-timers accumulated a down payment on their own (with 50 percent taking a year or more), while some received a gift from a friend or relative.

Another snag? Forty-one percent of first-timers reported they have student loan debt, with more than half in for at least $25,000. Fifty-five percent of those who reported the down payment as the hardest part of the process point to student debt as an obstacle.

"NAR survey findings on student debt released earlier this fall revealed that an overwhelming majority of millennials with student debt believe its delaying their ability to buy a home, and typically for seven years," Yun says. "Even in markets with a plethora of job opportunities and higher pay, steep rents and home prices make it extremely difficult to put savings aside for a down payment."

The savings and student debt struggle is undercutting not only the opportunity to become a homeowner, but also the opportunity for wealth. Home sellers have realized a median 26 percent ($47,500) since owning their home, the Profile shows, with those owning for just six or seven seeing a median 27 percent return.

For more on demographics, repeat buyers, sellers and more, view the NAR 2017 Profile of Home Buyers and Sellers.

For more information, please visit www.nar.realtor.



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First-Time Homebuyers: Your Time Is Now

First-Time Homebuyers: Your Time Is Now

RECBL - Real Estate News

Fall is for first-timers. If you believe you missed your opportunity for a chance to pick up your first home this past summer, think again.

In this era of investment, the best property investments may be in other cities. Even if you intend to stay close to home, knowing what’s going on in other states might provide a superior return on investment.

As you may have read in my very popular post on US Housing Predictionsfor 2018 to 2020, the US housing market is hot and some cities are hotter than others. No housing crash is forecasted.

Even normally depressed quiet markets are coming to life and beginning to catch investor’s eyes. It’s good news for Michigan, Florida, California, Texas, and New York and even better for real estate investors in 2018.

Scorching hot opportunity in the best cities! Will the hot markets of San Francisco, San Jose, Silicon Valley, Phoenix, and Los Angeles do as well as expected? Those cities with the highest home prices are not your only option. There’s plenty more towns and cities across the nation where you can buy rock bottom and sell high including this list of real estate by zip code. Cities you’ll read about below with lower home prices and rising employment rates may be your best bets for 2017 to 2020.

Seventy of the top 100 largest metropolitan areas see more starter homes on-market in October, November and December, relieving prices 4.8 percent over spring, according to the recently released Trulia Inventory and Price Watch.

The most dramatic shifts-in favor of first-time homebuyers-in prices and supply are out West, in Arizona, California, Colorado and Oregon.

"Housing markets along the West Coast have long been plagued by tight inventory and worsening affordability, but it’s not completely hopeless for would-be homeowners," says Cheryl Young, senior economist at Trulia. "The seasonal swings in listings and prices in the San Francisco Bay Area, Portland, Ore., and even Phoenix, means buyers will likely find more homes for sale at a lower price in the fall and winter months."

Make no mistake: The housing market is still in a squeeze. Entry-level home inventory sank 20.4 percent year-over-year over the summer, while move-up home inventory shrunk 12.5 percent. Even luxury homes were at a shortage, down 2.3 percent. First-time homebuyers were forced to shell out 39.7 percent of their monthly earnings for a starter home.

The change of season, still, could usher in more opportunities.

"Starter homebuyers should begin looking now," Young says. "The fall season provides a great opportunity for finding the right home and neighborhood, thanks to a bump in homes for sale on the market, followed by lower winter prices."

For more information, please visit www.trulia.com.



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7 Millennial First Home Essentials

7 Millennial First Home Essentials

RECBL - Real Estate News

More and more millennials are buying homes, representing around 45 percent of all purchase loans, and most first-time millennial homebuyers are on a limited budget.

While you may not be able to find the perfect home that checks every box on your dream home list, you can find a home you can improve on or add to over time.

As you hunt for your first home and make the big purchasing decision, make sure your checklist of new home essentials includes the following seven musts.

1. Energy-Efficient Features
Not only is energy efficiency trendy, but it also saves you money on your power bill and reduces your carbon footprint. When viewing homes on the market, look for energy-efficient features like double-paned windows, solar panels, attic insulation, LED lighting, and ENERGY STAR appliances. When you move in to your new domicile, invest in the Nest Learning Thermostat, which helps save you money on your energy bill and allows you to control your houses temperature from your phone.

2. An Entertainment Center
Moving from an apartment to a home means more room, so celebrate with an entertainment space. Equip a portion of your living room with a comfy couch, a big screen TV, and a stereo system. Don't forget a TV package and a streaming stick to access your favorite channels, such as HBO and Starz, and streaming services, including Netflix and Hulu. Trust us-your friends will thank you, and your home will be everyone’s favorite hangout.

3. Smoke Alarms and Carbon Monoxide Detectors
A smoke alarm and carbon monoxide detector should be on every level of a house, especially near bedrooms. While walking through homes, check to see if a property has up-to-date smoke alarms and carbon monoxide detectors. You may want to install smart versions, like the Nest Protect, a smoke and carbon monoxide alarm. The system checks its batteries and performs silent tests on a regular basis so you don’t have to.

4. A Home Security System
Burglary rates have been steadily increasing over time, but installing a security system can help you feel safer and protect your new home. If you buy a house that doesn’t have a home security system, you can easily install the necessary equipment with options such as the Scout Home Security System. You can connect a door panel, access sensor, motion sensor, video camera and more, depending on your needs.

5. A Home Improvement Magazine Subscription
Whether you like it or not, owning a home comes with a lot more responsibility than renting. You’ll occasionally spend weekends and afternoon’s fixing something or working on a home project. Even though just about every project type is available on the internet, subscribing to a home improvement magazine, like Better Homes & Gardens, serves as a homeowners initiation to all house-centric projects. Along with tips for home maintenance, you can also find inspiration for your next project in the leaves of these handy prints.

6. Wallpaper
No, were not back in the 1960s. Wallpaper is back and trendier than ever. If you find a home with wallpaper, don’t leave screaming. Depending on the style, you may be able to make it look modern, or, if a room is boring and you aren’t sure how to spruce it up without breaking the bank, try a modern wallpaper trend, such as a marble pattern. If you aren’t sold on the idea, try temporary wallpapers that are easy to remove.

7. Plants
Greenery is one of the biggest home decor trends, so bring the outdoors inside with houseplants. Not only do they clean the air, but they’re also inexpensive ways to decorate a room and brighten up even the darkest of spaces. For a small room, decorate with a tall cactus or fiddle leaf fig tree to make the area look bigger. Don’t have a green thumb? Try a faux plant, which only requires occasional dusting.

These must-haves are just a few to add to your checklist for an ideal dwelling. Think we missed something? Share what other essentials you think should be on every millennials new home list.

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Small Is the New Big: Home Size Preference Shrinks

Small Is the New Big: Home Size PreferenceShrinks

First-time homebuyers are shifting housing industry standards when it comes to home design preferences-and, according to the latest Home Design Trends Survey by the American Institute of Architects (AIA), one of the most significant changes is the end of the era of expansive property and square footage.

Small, simply, is the new big.

"With younger households that are increasingly entering the market looking for more affordable options, home sizes appear to have peaked for this economic cycle," said Kermit Baker, chief economist of the AIA, in a statement on the survey.

Smaller homes are generally more affordable, which is key for many first-time homebuyers squeezed by high home prices and student debt. Small homes, however, are scarce in most housing markets.

Aside from less living space, the architecture professionals surveyed see the following trends taking shape:

·          In-Home Accessibility

·          Single-Floor Plans

·          Open-Concept Layout

·          Informal Spaces

Source: American Institute of Architects (AIA)

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