First-Time Homebuyers Finding That They Don’t Need A Large Down Payment

Many would-be buyers think that in order to make their dream of homeownership a reality, they need to have 20 percent of the home’s purchase price to put down as a down payment. But, that’s just not true. The truth is, the vast majority of first-time buyers are buying their homes with significantly less.

According to Genworth Mortgage Insurance’s recent First-Time Homebuyer Market Report, a whopping 80 percent of first-time homebuyers (473,000) used a low down payment mortgage product to buy their home, in just the third quarter of 2019 alone.

In fact, the majority of low down payment mortgages go to first-time buyers (for example, in 2018, 88 percent of purchase loans with a 3 percent to 5 percent down payment went to first-time buyers—as did more than half (53 percent) of the 5 percent to 10 percent down payment loans).

The Takeaway:

What does this mean for you? If you’ve been waiting to buy your first home until you have a 20 percent down payment in the bank, you might be able to become a homeowner with a much lower down payment than you think.

Worried About Qualifying For A Mortgage? It May Be Easier For You Right Now

Buying a home is a big purchase and most buyers rely on a mortgage in order to pay for one.
So, there’s good news for would-be homeowners…

New data from the Mortgage Bankers Association shows that qualifying for a mortgage has gotten easier for many buyers over the past few months.

The MBA’s Mortgage Credit Availability Index, which measures the availability of mortgages, rose 2.1 percent in November—an increase that signifies loosening credit standards. This is the third straight month of increases in the index—and according to MBA’s associate vice president of economic and industry forecasting, Joel Kan, that trend is expected to continue into the new year.

“Expanding credit availability will continue to support active levels in mortgage lending, even as refinance activity starts to level off,” Kan said in a recent article on The Mortgage Reports.

The Takeaway:

What does this mean for you? If you’ve been dreaming about buying a home but have a less-than-perfect credit history, these loosening credit standards could make it easier to qualify for a mortgage—and make your dreams of homeownership a reality.

Freddie Mac Predicts Strong Real Estate Market In 2020 and 2021

                                           

2020 is here—and it looks like this year is going to be a strong one for the real estate market.

In a recent article outlining their market forecast, Freddie Mac projected an overall optimistic view for the real estate market in 2020, and into 2021. “With low interest rates, modest inflation and a solid labor market, the U.S. housing market continues to show strength. Our forecast is for the U.S. housing market to maintain momentum over the next two years,” they write in the article.

Some of their market projections include:

  • Interest rates for 30-year fixed-rate mortgages will drop slightly, from 4 percent in 2019 to 3.8 percent in 2020
  • Home sales will hit 6 million in 2019—but continue to rise, hitting a projected 6.1 million in 2020 and 6.2 million in 2021
  • Home price growth will slow, from 3.2 percent in 2019 to 2.9 percent in 2020 and 2.1 percent in 2021

The Takeaway:

What does this mean for you? It looks like a strong real estate market which is good for both buyers and sellers—so no matter what kind of real estate move you’re considering, 2020 and 2021 are projected to be great years.

Thinking About Buying A Home? Improve Your Credit Score With These Tips

Your credit score plays a key role in the homebuying process. Having a high credit score can help you score a lower interest rate on your mortgage—which can save you tens of thousands of dollars over the course of your loan.

But if you have a less-than-perfect credit score, there’s no reason to panic! There are steps you can take to increase your credit score—and snag the lower interest rates that come along with it.

A recent article from Apartment Therapy outlined five key strategies to improving your credit score, including:

  • Paying your bills on time, all the time;
  • Keeping credit card balances low;
  • Auditing your credit report on a regular basis (and correcting any mistakes);
  • Limiting hard inquiries; and
  • Giving your score time to grow

The Takeaway:

Bottom line? If you make these five strategies a rule, your credit score will improve—and you’ll be able to save money on your mortgage as a result.

January Expected To Be An Active Time For Homebuyers To Start Looking

The temperatures may be dropping outside—but for house hunters, things are just about to start heating up.

recent analysis from realtor.com found that while most people believe spring to be the hottest season for homebuyers, house hunters are starting their search earlier in the year—and January has become one of the most active times of the year for potential buyers on the market for a new home.

20 out of the 100 largest metros in the US saw their highest number of listing views online in January 2019 (based on average monthly views per listing on realtor.com 2015 to 2019)—compared to just three in 2018. And according to the realtor.com team, this trend is poised to continue in January 2020.

“As shoppers modify their strategies for navigating a housing market that has become more competitive due to rising prices and low inventory, the search for a home is beginning earlier and earlier,” said realtor.com® Senior Economist George Ratiu in the analysis’ press release. “With housing inventory across the U.S. expected to reach record lows in 2020, we expect to see this trend continue into the new year.”

The Takeaway:

So, what does this mean for you? If you’re thinking about buying a home in 2020, don’t wait until spring to start your search—because as it turns out, January is the perfect season for house hunting! And, if you’re thinking about selling, it’s not a bad idea to get your house on the market before the actual Spring market.