Financial Fundamentals for First-Time Homebuyers

Are you prepping to buy your first home? If so, one of the steps you should take early on is making sure you’re financially ready for your purchase. Here are just a few of the financial fundamentals you’ll need to focus on as you set out to buy a home.

Build Your Credit

Your credit is one element that helps determine which home loan you’ll qualify for. It also impacts your mortgage interest rate. While there are many factors that go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.

So how do you make sure your credit is in the best shape possible when it’s time to buy? A recent article from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include:Tracking your credit and disputing any errors that show up on your reports.

Paying your bills on time. This includes making loan payments and paying down any open lines of credit.

Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able can help.

Automate Your Savings for Your House Fund

You might also be wondering how you can achieve your down payment savings goals. Bankrate provides buyers with a number of tips to help you save, including searching for down payment assistance programs and ways you can save more, faster. As the article says:

“One of the best ways to save for anything — including a down payment — is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.”

Get Pre-Approved

As you prepare for your purchase, you’ll also need to have a good grasp on your budget and how much you’ll be able to borrow for your home loan. That’s where the pre-approval process comes in.

Pre-approval from a lender lets you know how much money you can borrow for your home loan. And having that knowledge, plus an understanding of your savings, can help you decide on your target price range for a house.

From there, you can start browsing for houses online and see what’s available in your area in that general price point. This can help you really understand your options so you can start to picture your future home.

For Customized Advice, Build a Team of Professionals

Finally, the best way to make you’re prepared for your purchase is to connect with trusted real estate professionals. Having expert advisors in the industry will help you make strong decisions throughout the homebuying process based on your specific goals, finances, and situation. They know the market and can guide you toward the home of your dreams.

Bottom Line

If you’re ready to get the homebuying process started, let’s connect so you can begin to build your team of professionals today.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - eXp Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
We Go to Extremes to Fulfill Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017, 2018,2019,2020,& 2021 Recognition of Excellence Award Winner SDAR

Is it Time to Move into a Single-Story Home?

Once the kids have left the nest, you may be wondering what to do with all of the extra space in your home. Chances are, you don’t need four bedrooms anymore, and it may be a great time to sell your house and downsize, maybe even into a single-story home. You’ve likely gained significant equity if you’ve lived in your home for a while, so making a move while demand for your current house is high could be your best step forward toward the retirement goals you set out to achieve several years ago.

The dilemma, though, is where to go next. A big concern for many homeowners who are ready to sell is finding a home to move into, given today’s lack of houses available for sale. There is, however, some good news: the number of single-family 1-story homes being built today is on the rise, improving your odds of finding the right home for your changing needs. In a recent article, The National Association of Home Builders (NAHB) explains:

“Nationwide, the share of new homes with two or more stories fell from 53% in 2018 to 52% in 2019, while the share of new homes with one story grew from 47% to 48%.”

Here’s a map showing the breakdown of newly constructed homes being built by region, and the percentage of 1-story and 2-story homes in that mix:

What are the benefits of buying a one-story home?

Still not sure about buying a single-story home? An article from Home Talk covers several advantages of switching from two floors to one:

1. Energy Efficient

“It is easier to heat and cool a single-story house [than] it would be to regulate the temperatures of a multi-story house.”

Most single-story homes only need one heating or cooling unit, and they typically stay cooler than a two-story home, both of which can lead to significant savings.

2. Easier to Maintain

“Doing a general cleaning in a single story requires less effort and you will be able to see all areas that need cleaning and the areas are easily accessible.”

Cleaning and maintenance of a single-story home can take less time and effort, and better upkeep helps improve the overall value of the home.

3. Accessible for Everyone

“A single-story house can be accessed by anyone, whether they are young children or the senior citizens.”

If you’re looking for a house that provides a safe and easily accessible environment at any age, a single-story home may be optimal.

4. Good Resell Potential

“When buying a single-story house, you should consider the resale value should you think of reselling it in case of a circumstance that can happen. Look at the growth rate of that area. Due to the high demand of these types of houses it is [easy] to resell them and depending on the growth rate of an area, it increases in value significantly.”

Single-story homes have a lot of benefits and are often in higher demand. This bodes well for future resale opportunities.

Bottom Line

There are many benefits to downsizing into a one-story home. Doing so while demand for your current house is high might make it easier than ever to make a move. Let’s connect if you’re ready to purchase the single-story home you need while homes are so affordable today.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - eXp Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
We Go to Extremes to Fulfill Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017, 2018,& 2019 Recognition of Excellence Award Winner SDAR

Buying a Home: Do You Know the Lingo?

Some Highlights:

Buying a home can be intimidating if you’re not familiar with the terms used throughout the process.
To point you in the right direction, here’s a list of some of the most common language you’ll hear when buying a home.

The best way to ensure your home-buying process is a positive one is to find a real estate professional who will guide you through every aspect of the transaction with ‘the heart of a teacher.’

Looking to Buy, Sell, or Invest? Contact:

David Demangos - Keller Williams Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017 & 2018 Recognition of Excellence Award Winner SDAR

Buying a House This Year? This Should Be Your 1st Step!

In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show that you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are not in an incredibly competitive market, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

Capacity: Your current and future ability to make your payments
Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash

Collateral: The home, or type of home, that you would like to purchase

Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential homebuyers overestimate the down payment and credit scores necessary to qualify for a mortgage. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so today.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - Keller Williams Realty
Cell: 858.232.8410 | Realtor® BRE# 01905183
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017,& 2018 Recognition of Excellence Award Winner SDAR

Excited About Buying A Home This Year? Here’s What to Watch

As we kick off the new year, many families have made resolutions to enter the housing market in 2019. Whether you are thinking of finally ditching your landlord and buying your first home or selling your starter house to move into your forever home, there are two pieces of the real estate puzzle you need to watch carefully: interest rates & inventory.
Interest Rates

Mortgage interest rates had been on the rise for much of 2018, but they made a welcome reversal at the end of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.94% in November before falling to 4.62% for a 30-year fixed rate mortgage last week. Despite the recent drop, interest rates are projected to reach 5% in 2019.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows the impact that rising interest rates would have if you planned to purchase a $400,000 home while keeping your principal and interest payments between $2,020-$2,050 a month.



With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000).
Inventory

A ‘normal’ real estate market requires there to be a 6-month supply of homes for sale in order for prices to increase only with inflation. According to the National Association of Realtors (NAR), listing inventory is currently at a 3.9-month supply (still well below the 6-months needed), which has put upward pressure on home prices. Home prices have increased year-over-year for the last 81 straight months.

The inventory of homes for sale in the real estate market had been on a steady decline and experienced year-over-year drops for 36 straight months (from July 2015 to May 2018), but we are starting to see a shift in inventory over the last six months.

The chart below shows the change in housing supply over the last 12 months compared to the previous 12 months. As you can see, since June, inventory levels have started to increase as compared to the same time last year.



This is a trend to watch as we move further into the new year. If we continue to see an increase in homes for sale, we could start moving further away from a seller’s market and closer to a normal market.

Bottom Line

If you are planning to enter the housing market, either as a buyer or a seller, let’s get together to discuss the changes in mortgage interest rates and inventory and what they could mean for you

Looking to Buy, Sell, or Invest? Contact:

David Demangos - Keller Williams Realty
Cell: 858.232.8410 | Realtor® BRE# 01905183
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017 & 2018 Recognition of Excellence Award Winner SDAR

First-Time Home Buyers Continue to Put Down Less Than 6%!

According to the Realtors Confidence Index from the National Association of Realtors, 61% of first-time homebuyers purchased their homes with down payments below 6% in 2017.

Many potential homebuyers believe that a 20% down payment is necessary to buy a home and have disqualified themselves without even trying, but in March, 71% of first-time buyers and 54% of all buyers put less than 20% down.

Ralph McLaughlin, Chief Economist and Founder of Veritas Urbis Economics, recently shed light on why buyer demand has remained strong,

“The fact that we now have four consecutive quarters where owner households increased while renters households fell is a strong sign households are making the switch from renting to buying.

Households under 35 – which represent the largest potential pool of new homeowners in the U.S. – have shown some of the largest gains. While they only make up a third of all homebuyers, the steady uptick in their homeownership rate over the past year suggests their enormous purchasing power may be finally coming to [the] housing market.”

It’s no surprise that with rents rising, more and more first-time buyers are taking advantage of low-down-payment mortgage options to secure their monthly housing costs and finally attain their dream homes.

Bottom Line

If you are one of the many first-time buyers unsure of whether or not they would qualify for a low-down payment mortgage, let’s get together and set you on your path to homeownership!

Looking to Buy, Sell, or Invest? Contact:

David Demangos - Keller Williams Realty
Cell: 858.232.8410 | Realtor® BRE# 01905183
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016 & 2017 Recognition of Excellence Award Winner SDAR

Is Your First Home Within Your Grasp Now?

Some Highlights:

According to the US Census Bureau, ‘millennials’ are defined as 18-36-year-olds.

According to NAR’s latest Profile of Home Buyers & Sellers, the median age of all first-time home buyers is 32.

More and more ‘old millennials’ (25-36) are realizing that homeownership is within their grasp now!

Looking to Buy, Sell, or Invest? Contact:

David Demangos - Keller Williams Realty
Cell: 858.232.8410 | Realtor® BRE# 01905183
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016 & 2017 Recognition of Excellence Award Winner SDAR