Hope Leitner, Realtor®, CRS

There is a little-known mortgage program that could provide the vehicle for the right person to get into a home.   If a person sells their home to another for less than the fair market value, the difference in the appraised value and the sales price is considered a gift of equity for the buyer. FHA requires that borrowers receive gifts of equity only from family members transferring title to the borrower.   An appraisal is required to determine the value of the home.   The sales price is subtracted from the appraised value to determine the equity to be gifted.   If a home appraises for $300,000 when the owner will sell it for $250,000, the gift is $50,000. The gift is applied to the down payment.   In this example, the borrower would have to qualify for a $250,000 mortgage which would require private mortgage insurance because a 20% down payment on a $300,000 home would be $60,000.   If the buyer had an additional $10,000 in cash to put down, the PMI ...

It may be natural for first-time buyers to be unsure of the process of buying a home because they haven't been through it before but even repeat buyers need to know changes that have taken place since the financial housing crisis. The steps in the home buying process are predictable and generally follow the same pattern.   It certainly makes the move stay on schedule when you know all the different things that must be done to get to the closing. In the initial interview with your real estate professional, you share the things you want and need in a home, discuss available financing and learn how your agent can represent you in the transaction. The pre-approval step is essential for anyone using a mortgage to purchase a home to assure that they're looking at the right price of homes and so they'll know what they can qualify for and what the interest will be. Even with lower than normal inventory, it is difficult to stay up-to-date with the homes current...

It's been said that if you can find a home that has most of what you want, you should go ahead and purchase it.   Many first-time buyers are using everything they have for a down payment and closing costs and would have to "live" with the less than perfect home until they can save the money to make the changes. The FHA 203(k) mortgage allows a borrower to purchase a home and provides additional funds for improvements to be made.   These types of renovations can include kitchen and bathroom remodels, flooring, plumbing, heating and air conditioning systems, additions and other things. The benefit to the buyer is that they have the opportunity to consider a home that needs repairs and might have been unacceptable without a program like this.   Being a FHA loan, a minimal down payment is required, fair interest rates and generous qualifying requirements. The 203(k) Streamline can be used for cosmetic improvements, appliances and minor remodeling up to $35,000 in cost. ...

Recently, multiple headlines have been written asserting that homeownership is less affordable today than at any other time in the last decade. Though the headlines are accurate, they lack context and lead too many Americans to believe that they can’t partake in a major part of the American Dream – owning a home . In 2008, the housing market crashed and home values fell by as much as 60% in certain markets. This was the major trigger to the Great Recession we experienced from 2008 to 2010. To come back from that recession, mortgage interest rates were pushed down to levels that were never seen before. For the last ten years, you could purchase a home at a dramatically discounted price and attain a mortgage at a historically low mortgage rate. Affordability skyrocketed. Now that home values have returned to where they should be, and mortgage rates are beginning to increase, it is less affordable to own a home than it was over the last ten years. However, what is not being report...

Some Highlights: •The Veterans Administration (VA) Home Loan is a benefit that is available to more than 22 million veterans & 2 million active duty service members which helps them achieve their dreams of homeownership. •In 2017, $189 billion was loaned to veterans and their families through the program. •VA Purchase Loans are on the rise in 46 out of 50 states and Washington, DC.

Urban Institute recently released a report entitled, “Barriers to Accessing Homeownership: Down Payment, Credit, and Affordability,” which revealed that, “Consumers often think they need to put more money down to purchase a home than is actually required. In a 2017 survey, 68% of renters cited saving for a down payment as an obstacle to homeownership. Thirty-nine percent of renters believe that more than 20% is needed for a down payment and many renters are unaware of low–down payment programs.” Myth #1: “I Need a 20% Down Payment” Buyers often overestimate the down payment funds needed to qualify for a home loan. According to the same report: “Most potential homebuyers are largely unaware that there are low-down payment and no-down payment assistance programs available at the local, state, and federal levels to help eligible borrowers secure an affordable down payment.” These numbers do not differ much between non-owners and homeowners. For example, “30% of homeowners and 3...

Finding the right home is still the biggest challenge buyers are faced with in today's market as is shown in the latest Confidence Index Survey.   Assuming the buyers find the "right" home with determination, perseverance and the help of a real estate professional, 88% of all transactions last year required financing to get the buyer's address on the home.   93% of first-time buyers needed financing. Pre-approval is an essential step that needs to be handled before buyers begin searching for a home.   The benefits to the buyer fall into the category of confidence. PRE-APPROVAL GIVES YOU CONFIDENCE Knowing the amount you can borrow   the mortgage amount decreases as interest rates rise Looking at the right priced homes price, size, amenities, location Comparing and identifying the best loan rate, term, type Uncover issues early that could affect the most favorable loan terms time to cure possible problems Bar...