One More Time…You DO NOT Need 20% Down

A recent survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less and the number has increased through the first quarter of the year as shown by the graph below:

2. FICO Scores

The survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower:

Bottom Line

If you are a prospective purchaser who is ‘ready’ and ‘willing’ to buy but not sure if you are also ‘able’, sit down with someone who can help you understand your true options.

The J Team Fort Lauderdale is committed to helping you buy a home, Contact The J Team Fort Lauderdale today at 954-235-3589 and schedule your Home Buyers Consultation today!

Search Fort Lauderdale Homes for Sale at http://JTeamFL.com

Debunking Some Myths about Mortgage Availability

There seems to be a growing chasm between what the public believes to be need and what is actually needed to qualify for a residential home loan.

A recent survey by Ipsos reported that:

• Two-thirds of those surveyed believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780.
• Consumers overestimate the down payment funds needed to qualify for a home loan, with 36 percent thinking a 20 percent down payment is always required.

However, according to American Enterprise Institute's International Center on Housing Risk’s May First-Time Buyer Mortgage Risk Index (FBMRI), reality is far from perception. The report reveals:

• 70% of first-time buyer mortgages had a combined loan-to-value ratio of 95% or higher
• About 20% of first-time buyers taking out mortgages had a FICO score below 660
• 25% had total debt-to-income ratios above 43 percent
• The median first-time buyer with an agency mortgage made a down payment of only 3 percent, or $7200 in dollar terms.
• The median FICO score for first-time buyers with agency mortgages was 705
• For first-time buyers with FHA-insured loans, the median FICO score was only 672

These numbers contradict the frequent claims that first-time buyers face difficulties in obtaining mortgages.

Bottom Line

Stephen Oliner, co-director of AEI’s International Center on Housing Risk explained the reality of the situation.

“One hears all the time that first-time buyers have limited access to mortgage debt.  But this isn’t true. Many first-time buyers with low FICO scores and little money down are buying homes every month.”

Contact The J Team Fort Lauderdale Today and schedule your Home Buyers Consultation at 954-235-3589!  We will go over the home buying process, conduct a needs anaylsis and help you speak to a mortgage lender about getting pre-approved.

Search Fort Lauderdale Homes For Sale at http://JTeamFL.com

Homeownership as an Investment: The Role of Price Appreciation

We recently posted on the results from the latest Home Price Expectation Survey(HPES) showing where residential home prices are headed over the next five years. Today, we want to show you what the results of the report could mean to you.

A good portion of every family’s wealth comes from the equity in the home they live in. As the value of their home (an asset) increases so does their equity. Let’s look at a possible case scenario based on the latest HPES.

Here is a chart showing the survey’s projections on annual appreciation over the next five years:

We then looked at the five-year impact this would have on the equity of a family that purchased a home in January for $250,000:

Their family wealth (based on increased equity) would increase by $47,772 over those five years.

Bottom Line

If you don’t yet own, perhaps you should be thinking about purchasing. If you already own, maybe it’s time to move up to enjoy your dream home and also ride the increase in equity of the larger asset.

Contact The J Team Fort Lauderdale and schedule your Home Buyers Consultation today!  954-235-3589 

Search Fort Lauderdale Homes For Sale Online now at http://JTeamFL.com

Does Homeownership Make Sense Financially?

By The KCM Crew

Everyone knows the social advantages of home ownership. However, some question the financial benefits of owning a home. Three recent studies shed some light on the issue.

RealtyTrac recently released a report comparing home price appreciation to wage growth over the last two years. The study revealed that home price appreciation has outpaced wage growth in 76% of U.S. housing markets during that time period. By how much? Here is a graph showing their findings:

And we all know the importance of home appreciation in determining the net wealth of most American families. Merrill Lynch just issued a report covering the issue. Their findings are shown here:

It obviously makes financial sense to be a homeowner.

But, does it make sense to buy now?

The survey company Pulsenomics just issued their findings on the cost of owning versus the cost of renting. They compared historical averages to the cost you can expect to pay today.

The cost of buying is far below historical averages. Renting is another story.

Contact The J Team Fort Lauderdale today!  We are committed to helping you buy in today's Real Estate Market here in Fort Lauderdale.  Search Fort Lauderdale Homes now at http://JTeamFL.com

Freddie Mac’s New 3% Down Program

By The KCM Crew

Today, Freddie Mac is scheduled to start buying mortgages with down payments of only three percent – the first time down payments have been this low on Freddie Mac loans in nearly five years. The program is called Freddie Mac Home Possible Advantage^SM.

In a recent Executive Perspectives, Dave Lowman EVP, Single-Family Business Freddie Mac, explained the potential impact this program will have on the housing market:

“There's a new reason Realtors and lenders may expect more qualified borrowers at the closing table during this spring's home buying season. In addition to low mortgage rates and rising job growth, the down payment hurdle is starting to shrink for creditworthy borrowers, including first-time homebuyers.” 

And the mortgage industry agrees with Mr. Lowman. In a recent survey of mortgage originators by the National Association of Realtors(NAR), it was revealed that most loan officers believe the move to a lower down payment will increase access to mortgage credit. Here are that survey’s findings:

Bottom Line

Many potential buyers are “ready and willing” to buy a home but have been afraid they may not be “able” because of a lack of adequate savings for a down payment. Check with a local real estate or mortgage professional to understand what the new rules may mean to you.

Contact The J Team Fort Lauderdale today at 954.235.3589 to schedule your home buyers consultation!  Search Fort Lauderdale Homes instantly at http://JTeamFL.com

Don’t Get Caught in the ‘Renter’s Trap’

By The KCM Crew

There are many benefits to homeownership, one of top ones, is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.

The National Association of Realtors (NAR) just released their findings of a studyin which they studied “income growth, housing costs and changes in the share of renter and owner-occupied households over the past five years in metropolitan statistical areas throughout the US.”

Don’t Become Trapped

The study revealed that over the last five years, a typical rent rose 15%, while the income of renters grew by only 11%. If you are currently renting, this disparity in growth could get you caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment.

The top 5 markets where renters have seen the highest increase in rents since 2009 are:

• New York, NY (50.7%)
• Seattle, WA (32.4%)
• San Jose, CA (25.6%)
• Denver, CO (24.1%)
• St. Louis, MO (22.3%)

Homebuyers, who were able to purchase their home over the same five-year period and lock in their housing costs, were able to grow their net worth as home values have increased and their mortgage balances have gone down.

Know Your Options

Perhaps you have already saved enough to buy your first home. HousingWire reported that analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment. 

It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

According to Freddie Mac:

“Depending on their credit history and other factors, many borrowers can expect to make a down payment of about 5 to 10%. And new 3% down financing options for qualified borrowers could mean a down payment as little as $6,000 for a $200,000 home.”

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.

Contact The J Team Fort Lauderdale for your home buyers consultation!  We will educate you about the buying process, provide tips on qualifying for a mortgage and solutions to financial issues holding you back such as school loan debt and credit issues!  Contact The J Team Fort Lauderdale today at 954-235-3589!

Search Fort Lauderdale Homes now at http://JteamFL.com

The Difference Between A Home’s Cost vs. Price

by The KCM Crew

As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first time or repeat buyer, you must not be concerned only about price but also about the ‘long term cost’ of the home.

Let us explain.

There are many factors that influence the ‘cost’ of a home. Two of the major ones are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.

What will happen in 2015?

A nationwide panel of over one hundred economists, real estate experts and investment & market strategists project that home values will appreciate by almost 4% by the end of 2015.

Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30-year fixed mortgage rate will appreciate to 4.5% by the end of 2015.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

Contact The J Team Fort Lauderdale at Keller Williams Realty today and schedule your free Home Buyers Consultation.  We will educate you about the home buying process, help you get qualified with a mortgage and conduct a needs analysis to help you find the right home for you!  Call The J Team Fort Lauderdale today at 954.235.3589 or to search Fort Lauderdale Homes now visit www.JTeamFL.com

5 Reasons to Hire a Real Estate Professional

5 Reasons to Hire a Real Estate Professional

By The KCM Crew


Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.
The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened due to the projections of higher mortgage interest rates & home prices as the market continues to recover. 

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $208,000 compared to $235,000 among agent-assisted home sales.”
Get the most out of your transaction by hiring a professional.  

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?
Dave Ramsey, the financial guru advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

Contact The J Team Fort Lauderdale at Keller Williams Realty today!  954.235.3589

Want to search for Fort Lauderdale Homes for sale now?  Visit www.JTeamFL.com

4 Reasons to Buy Before Spring!

By The KCM Crew

The holiday season is behind us, time to focus on what exciting new experiences 2015 can bring! If you are planning on becoming a homeowner, or moving up to the home of your dreams in 2015, here are four great reasons to consider buying a home now, instead of waiting until spring.

1. Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 15.1% (most pessimistic) and 32.8% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense. 

2. Mortgage Interest Rates Are Projected to Increase

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of 2015.

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way You are Paying a Mortgage

As a paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Schedule your personal Buyers Consultation with The J Team Fort Lauderdale today!  First half of the consultation will educate you about the buying process today and second half wil be focused on your needs to understand what you are looking for.  Then we help you search Fort Lauderdale Homes and set you up on a Buyers Instant Notification system to alert you the second a home with your criteria becomes available!  Contact The J Team Fort Lauderdale today at 954-235-3589!

Start your search for Fort Lauderdale Homes on our website www.JTeamSellsFortLauderdale.com

7 Must-Dos for First-Time Homebuyers

RISMedia

Seven Must-Dos for First-Time Homebuyers

(MCT)—Buying your first home can be nerve-wracking. As a first-time homebuyer, you will navigate a process that might include uncertainty, excitement, confusion and frustration.

But preparation and knowledge can help you stay on the right track. Here are seven steps that can improve your chances of having a good homebuying experience.

Know Your Credit
If you think you may want to buy a home in the near future, your first step — and perhaps the most important one — is to watch your credit. Familiarize yourself with your credit history and make sure all the information in your credit reports is accurate.

“The very first thing you need to do is to find out what your credit is and what’s being reported about your credit,” says Pava Leyrer, director of training for Northern Mortgage Services in Grandville, Mich.

This will give you enough time to deal with any reporting errors on your report or improve your credit before you are ready to buy, Leyrer explains.

If all looks good, keep it up and don’t max out your credit cards at the furniture store after you sign a contract for the home.

Hire a Good Team
Buying a home for the first time is supposed to be fun, but it’s actually hard work, and at some point during this process you will feel overwhelmed. You’ll need to be surrounded by professionals who know what they are doing so they can guide you and provide answers to your questions.

“Formulate a good team to help you,” says Rafael Castellanos, an attorney and managing director at Expert Title Insurance in New York. “You don’t want someone who is going to pressure you to buy the one or two exclusive listings that they have.”

Find an experienced real estate agent, a reputable mortgage professional and a real estate attorney if you can.

“You cannot have an inexperienced buyer and an inexperienced agent,” says Patty Da Silva, owner of Green Realty Properties in Davie, Fla. “Who you hire is truly one of the most important things.”

Get Preapproved for a Mortgage
Homebuying does not begin with home searching — unless you are sitting on a pile of cash and won’t need a mortgage. Otherwise, make sure you get a preapproval from a lender before you even begin hunting for a home.

And make sure it’s a true preapproval and not just a prequalification, Da Silva says. Some lenders will tell you that you prequalify for the loan based on the income and credit information you have provided. That’s not good enough for most sellers today.

With a real preapproval, the lender will verify your income documentation and not just check your credit.

“Have your finances really ready,” Da Silva says.

Determine A Budget and Stick to It
Don’t wait until you are shopping for a house to find out how much home you can afford.

Determine your budget and the monthly payments you can afford and qualify for early in the process.

Most importantly, stick to the plan.

“When you fall in love with a house, all common sense goes out the window,” Leyrer says. “Make sure you know what’s going to fit your budget and stay in control.”

Picking your Team of Professionals is very Important!  The J Team with Keller Williams Fort Lauderdale offers a monthly Home Buyers Seminar to help educate and empower anyone looking to Buy a Home!  We have A Real Estate Consultant, Mortgage, Title, Inspections and Insurance all there to answer questions and help you learn what is involved in the Buying process.  Our next session is Saturday November 8, 2014 from 12:00PM to 1:00PM at Keller Williams Realty 3696 N Federal Hwy Suite 101, Ft. Lauderdale, FL 33308!