Are Young Homebuyers Priced Out of the Market? Investigate How to Buy Your First Dream Home in Your 20s

If you’re in your 20s and thinking about buying a house, it’s easy to understand how you could be confused and overwhelmed. According to a study by the National Association of Realtors, people under 35 with student loans are postponing home buying by an average of 8 years. But buying a home while in your 20s is not only a possibility, you’ve got a lot of resources that could make it happen for you. First, we’d like to dispel a few myths about home buying that could have been keeping you out of the home market.

Student loans will prevent you from buying a home

The problem of student loan debt is finally on the national agenda, and lawmakers are seriously discussing reducing the interest on student loans or even forgiving some or all student loan debt. Although this plan is still under discussion, some homebuilders and the majority of states offer home buying assistance programs for people whose student loan debt is preventing them from buying a home.

California offers the CalHFA “My Home” first time homebuyer assistance program which provides down payment and closing cost assistance. CalHFA also works with counties to offer tax credits to make mortgage payments more affordable for first-time homebuyers. A first-time homebuyer is anyone who has not purchased a home during the past three years. So, even if you’ve bought and sold a home before, you could be eligible for one of these programs as long as it hasn’t been during the past three years.

Work on your credit score

These days, you can sign up to monitor your credit score via dozens of apps and financial programs. The majority of credit cards and financial institutions offer free or very low cost credit score monitoring. Learn how your credit score works and work to increase it. Your debt-to-income ratio and credit use ratio will affect your credit score, along with any late payments.

You’ll want to increase your credit score as much as possible: ideally to 660 or better. However, some mortgage programs, including FHA home mortgages, can offer loans to people with credit scores as low as 580.

Work with a knowledgeable realtor and mortgage broker

Everyone is online and connected, and you can shop for homes using your mobile device — even apply for a mortgage. But many home loan programs still work through mortgage brokers. And, not every home for sale is a featured listing on an online home search service. The personal touch still matters — it might matter more than ever these days. You can learn what your alternatives in home buying really are by working with a mortgage and home buying professional.

Sources

https://www.usnews.com/education/blogs/student-loan-ranger/articles/2017-10-11/new-homebuyer-programs-help-student-loan-borrowers

https://www.realtor.com/advice/buy/how-to-buy-a-house-in-your-20s/

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As shown in a new survey from the National Association of Realtors (NAR), home affordability in the United States increased for the second month in a row in August Despite surging prices

Rates Fall For the First Time in Over a Week

Intraday movements in the bond market and mortgage rates are closely followed. Mortgage rates rarely stay the same for more than five business days without decreasing at least once—even if only slightly. Thankfully, we finally saw some movement in rates declining which put an end to that trend (rates hadn’t improved since Monday).

Bonds initially reacted negatively to today’s inflation news (spoiler alert: it’s still high), but they eventually recovered and settled down. The 30-year Treasury bond auction that went better than expected added to the positive response in the bond market and the slight decline of interest rates.

Fed Could Begin ‘Gradual Tapering Process’ by Mid-November

According to the minutes from the central bank’s September meeting released Wednesday, Federal Reserve officials could begin lowering what seems like the never-ending interest rate assistance they’ve been providing to the economy as early as mid-November. Moreover, members believe the Fed is near to completing its economic goals and will soon begin normalizing policy by slowing the pace of its monthly asset purchases.

The Fed would gradually cut the $120 billion in monthly bond purchases, a practice known as tapering. According to the minutes, the central bank would likely begin by eliminating $10 billion in Treasury bonds and $5 billion in mortgage-backed securities each month. The Fed is now buying Treasurys worth at least $80 billion and MBS worth at least $40 billion. Should there be no setbacks, the target date to end the purchases would be mid-2022.

Affordability Improved in August Despite Surging Prices

As shown in a new survey from the National Association of Realtors (NAR), home affordability in the United States increased for the second month in a row in August. The National Association of Realtors’ Housing Affordability Index increased from 150.6 in July to 151.3 in August. However, it was still down from 165.8 in July.

The most affordable region was the Midwest, with an index value of 196.8 (median family income of $86,614 with the qualifying income of $44,016). The least affordable region remained the West, where the index was 114.9 (median family income of $94,372 and the qualifying income of $82,128).

Next week’s potential market-moving reports are:

  • Monday, October 18th – National Association of Home Builders Index
  • Tuesday, October 19th – Housing Starts (SAAR)
  • Wednesday, October 20th – No Report
  • Thursday, October 21st – Initial Jobless Claims, Continuing Jobless Claims, Existing Home Sales
  • Friday, October 22nd – No Report

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at  (800) 216-1047.

Source – https://www.mortgagenewsdaily.com/news/10122021-affordable-housing

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Are You Classified As An Untraditional Borrower? Can You Still Be Granted With a Mortgage Without Any Income or Tax Documentation?

At least 90 percent of the mortgage and financial advice out there is written for traditional 30-year fixed mortgages and conforming loans. You’ll see a lot of advice based on 15-year fixed rate or 30-year fixed-rate mortgages of $200,000 or less. Many fewer articles offer advice on interest-only adjustable rate mortgages (ARMs), different term ARMS, higher debt-to-income ratios (DTI to 50%), or loans with no tax returns or 24-month personal income and business bank statements. If you’re interested in one of these loans, you may not have a lot of internet articles available, but you do have home loans available for you.

What California home loans are available for untraditional borrowers?

If you’re an untraditional borrower in California, you have many choices of home mortgage available. You don’t have to put 20 percent down on a home and submit two or more years of tax returns and months of pay stubs just to qualify for a mortgage.

Depending on the home you want to buy, your income and assets, your credit score, and your debt-to-income ratio, you can qualify for a variety of different 30-year fixed-rate mortgages, 15-year fixed-rate mortgages, and adjustable-rate mortgages (ARMS).

You can apply for untraditional mortgage products including loans with:

  • No tax returns needed
  • CPA P&L statements
  • 12-month business bank statements
  • 24-month business bank statements
  • 3-month bank statements with CPA P&L statements
  • DTI to 50% (Debt-to-Income ratio of 50%)

Jumbo loans up to $15 million may be available for untraditional borrowers. Lenders with flexible underwriting terms are able to provide these mortgage loan products.

How can you access untraditional mortgage products?

This is where a qualified mortgage specialist comes in. They are experienced in working with a variety of different lenders. They have access to loan programs and can work with you to qualify for the loan you need, regardless of how traditional or untraditional your mortgage loan needs and qualifications are. It is much easier for you to access untraditional mortgage and home loan products through a mortgage specialist. You’ll find a lot of online mortgage application portals. If you’re an untraditional borrower and have unique needs, chances are you’ll just get a lot of unwanted emails and phone calls from making an online “one size fits all” mortgage application. Contact an experienced mortgage specialist and work with them to find the mortgage you need to buy the home you want.

Sources

https://www.investopedia.com/terms/n/nontraditionalmortgages.asp

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