Uncommon Knowledge
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Data from research organizations and aging advocacy groups is clear: More older Americans want to age in place in their own homes, as opposed to living in dedicated care facilities.
To get a better grasp on this preference, Chicago-based National Public Radio (NPR) affiliate station WBEZ recently featured a dedicated aging-in-place segment. WBEZ spoke with experts and community members about why more older Americans are opting to remain in their homes as they grow older.
The preference to age in place is rooted in emotion and familiarity that’s likely to be lost by moving to another environment, according to Margaret LaRaviere, deputy commissioner of senior services with the Chicago Department of Family Support Services.
“Studies have found and supported that if you ask the senior where they would like to be, they want to age within [their homes and] communities,” she said. “[They want to be among] neighbors that they’ve known for years [and in] areas that are familiar to them. When you look at aging outside the home in a senior retirement facility, it can range anywhere from $4,000 to $12,000 [per month].”
These costs only increase if, for example, a resident of a senior housing facility needs memory care support to deal with cognitive challenges, like dementia or Alzheimer’s disease, LaRaviere said. This pushes dedicated care facilities out of financial reach for many American seniors and their families, she added.
Mary Mitchell, a columnist and the director of culture and community engagement for the Chicago Sun-Times, recently wrote a column about aging-in-place dynamics in the Chicago community. She described her own aging-in-place experience in a recent column as well as on the radio segment.
“I made the move because [a] three-story house was too much for me to handle,” she said. “[It was] a lot of house and a lot of stairs to climb from basement to attic, so that’s one reason I just needed to make a change. But the thing that was also on my mind when I moved out of that house was that this house is perfect for a young family.”
This made her believe that it was time to “move on,” but the journey was a very emotional one for her.
“I packed up knowing that I was putting stuff in storage, I was giving stuff away [and] I was moving into a smaller space,” she said. “And it was very important for me to really embrace this as my forever place, and I have no intention of moving from there to another place.”
But data can only go so far when taking stock of seniors’ preferences, and Mitchell explained the emotional dynamics of such a choice more deeply.
“I was sad; it was like a part of me,” she said. “This was my home for 30 years. I knew every nook and cranny and every window, [and it] was a lovely community. I knew my neighbors, I knew the people who work at the stores and all of that. It’s familiarity, and I think as I get older, I crave familiar places and familiar spaces.”
Source: housingwire.com
A strong U.S. economy will be a boon for the housing market, Mortgage Bankers Association’s (MBA) chief economist said on Thursday, as it will buoy demand and as inflation continues to fall, mortgage rates will decline as well making home loans more affordable for buyers.
The U.S. economy accelerated at a faster-than-expected clip in the fourth quarter of 2023 at 3.3 percent, the Commerce Department’s Bureau of Economic Analysis revealed on Thursday.
Meanwhile, the personal consumption expenditures (PCE) price index—the Federal Reserve’s preferred measurement of inflation’s progress—jumped by 1.7 percent during the quarter. Core PCE, which excludes the often volatile food and energy prices, increased by 2 percent.
These dynamics bode well for the housing market that has been struggling under the weight of record-high mortgage rates, sparked in part by the Fed’s hiking of rate at the most aggressive clip since the 1980s to fight soaring inflation.
The Fed’s funds rate currently sits at 5.25 to 5.5 percent—the highest they have been in two decades—and policymakers have signaled that they will slash rates should inflation come down to their 2 percent target.
But an economy that may avoid a recession as inflation moderates without the Fed’s tight monetary policy doing too much damage to the jobs market would help the housing sector.
“Stronger economic growth will benefit the housing market, keeping demand robust,” Mike Fratantoni, MBA’s chief economist, said in a statement shared with Newsweek. “Moreover, today’s report also showed further reductions in inflation, which will enable the Federal Reserve to cut rates later this year—as they have been hinting.”
Mortgage rates ticked up slightly for the week ending January 25, Freddie Mac said on Thursday, with the 30-year fixed rate averaging 6.69 percent.
“The 30-year fixed-rate has remained within a very narrow range over the last month, settling in at 6.69% this week,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
Rates look to have stabilized, Khater suggested, encouraging buyers to jump off the fence.
“Despite persistent inventory challenges, we anticipate a busier spring homebuying season than 2023, with home prices continuing to increase at a steady pace,” he said.
A slowdown in rates could have a negative impact on home buyers, some analysts say.
A decline in the cost of home loans would encourage more purchases, and this increase in demand will spark competition at a time when there is a limited supply of homes for sale.
More buyers who can afford mortgages entering the market will push up prices, analysts from Goldman Sachs said this week.
The investment bank’s experts project prices to soar by 5 percent in 2024, a marked revision from their earlier expectation of a 2 percent jump. That trend will continue through next year when prices are forecast to increase by nearly 4 percent, which is also a change from a previously estimated increase of close to 3 percent.
Amid the price increases, Goldman Sachs analysts anticipate that rates will fall to 6.63 percent for the year. This drop in rates from the near 8 percent highs of November 2023, will make house loans more affordable, sparking more demand for properties.
“We have very low inventory of houses for sale, which is generally supportive of prices, along with generally stable demand that is coming from things like household formation,” Roger Ashworth, senior strategist on the structured credit team at Goldman Sachs, said this week.
On Thursday, new home sales climbed up by 8 percent in December, according to government data, while prices declined to two-year lows. The fall in prices and a rise in sales was partly due to builders offering inducements to buyers, according to Yelena Maleyev, a senior economist at KPMG.
“Builders have pivoted to building smaller homes and offering more discounts and concessions, such as mortgage rate buydowns, to bring in buyers sidelined by rising mortgage rates,” she said in a note shared with Newsweek.
But the data from the U.S. Census Bureau also showed that inventory of newly built homes fell last month after going up the previous months. There were 453,000 houses available for sale at the end of December, which accounts for 8.2 months’ worth of supply.
This constituted a 3.5 percent decline from the same time a year ago, Maleyev pointed out.
The lack of inventory also comes at a time when the used homes market has struggled. Sales are down in that segment amid a lack of supply of homes as sellers are reluctant to give up their low rates for new home loans hovering in the mid-6 percent.
This lack of supply will be key to how prices shake out and the outlook for the year is not encouraging.
“If mortgage rates fall below 6 [percent] in 2024, more owners will feel comfortable listing their homes for sale, alleviating some of the shortages, but not enough to close the supply gap,” Maleyev said.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
When it comes to home design, we’ve all decorated with a trend or two that we wish we could forget (anyone remember pistachio-colored kitchens?). But we’ve also discovered trends that have turned into classic finishes that are here to stay. (Looking at you, marble!) With that said, while trends come and go, it’s always fun to forecast what’s going to be hot in the new year. And as with the “never dress in a trend from head-to-toe” fashion rule, the same applies to home decor. It’s never wise to outfit an entire house in them, but sprinkle in a trend here and there for an updated look. From embracing bold hues to incorporating textured wallpapers, 2024 looks to be a colorful year. Four designers weigh in on what you’re sure to see inside beautiful homes around Dallas this year.
More and more, new home builds and renovations are including a spot for a working pantry, which is a larger walk-in version with storage and prep space. “Adding countertops, outlets and space to prep in pantries bring an added layer of function to the home and can help achieve a mess-free kitchen space while entertaining,” says Hayden Dendy, designer for BRNS Design, a multidisciplinary architecture and design firm.
Designer Kara Adam, owner of Kara Adam Interiors, is also urging her clients to consider adding a working pantry to their floor plans. Not only is it practical, but it’s another opportunity to have fun with design. “Pantries are no longer a closet with white shelves,” she says. “They are gorgeous and they’re functional. Design them with pretty countertops, tile and wallpaper, or paint them a fun color. They are truly treated as a room now, not just a closet. This will be budgeted into more and more of my clients’ projects.” She suggests storing appliances that take up space in the kitchen such as coffee makers, blenders and toasters. “They can also be plumbed with a sink or ice machine. Basically all of the things that are noisy or unattractive, so that your kitchen remains a pretty space,” she says.
“This year we are going to see homeowners being more adventurous with color,” says Danielle Frazier, co-owner and principal designer of interior design studio Twilly & Fig. “When you saw the trends go towards gray and neutrals and cooler tones, people lost that richness and connection to color. They are starting to feel that void and want to be more playful with color.” Within that, Frazier notes that spaces will continue to see monochromatic use of color, particularly with moody hues. She says she’s seeing an increase in purple spaces, as well. “We just did a living room in a grayish plum that is really rich. It’s a color you don’t hear a lot about now, but you’ll start to see it more,” she says. She suggests trying Benjamin Moore’s “Hazy Lilac” as a way to introduce the trending palette. Aside from the walls, Frazier also notes that homeowners are starting to ask for colorful pieces like rugs, sofas and wallpaper as well. “I think people are willing to take a risk with color on more investment pieces than they have in the past,” she says.
Adam agrees that the neutral all-white look is starting to fade. “In 2024, few people are going to ask for that,” she says. “People want a cozier environment rich in color. Even formal spaces are looking less formal because of the rich color. It draws you in and makes a space scream ‘come hang out in here,’” she says.
As the neutral palette starts to fade, so does the matchy-matchy interior that looks more like a catalogue than a personalized lived-in space. “Our clients are craving an element in their design and in their homes that have a soulfulness to them,” Frazier says. “For instance, we’ve been designing a kitchen with custom handmade tiles on the backsplash. We’re finding that people are wanting to add depth, character and personality through handmade pieces and antiques.” She suggests shopping estate sales and local antique stores for hidden gems or planning a road trip to one of Round Top’s antique show weeks for one-of-a-kind finds.
“We always encourage and push clients to embrace the unexpected,” adds Adam. “Mixing a contemporary piece with an antique will make an environment that is pleasing to the eye.”She also urges clients to purchase art, which personalizes a home even more. She suggest that her clients buy works that speaks to them, rather than what “matches” their interiors. “Your home is an expression of you,” she says. “Art is very subjective. And, it’s not just decoration anymore. It’s a statement.”
“Bars are huge right now,” says Adam. “We have some homes with multiple bars. And much like how powder baths are the jewel box of the home, that’s how bars are going to be too. They will be extremely layered, rich in colors and accessories, and usually have unique countertops.” And thanks to the playful powder bath aesthetic that has been trending for some time, homeowners are craving more of that layered look throughout the home, which is where a bold bar comes in. “It used to be that we’d go into these beautiful, airy light homes and they’ve had this wild powder bath, but now you’re seeing that personality throughout the home,” she says.
Cheers to the new home bar: How to create a modern, multifunctional space
And on that note, Frazier is seeing an increase in beverage centers, which encompasses every drink throughout the day, from breakfast to cocktail hour. “In the past a beverage center was maybe just a coffee bar or a cocktail bar, but now people want them to be multipurposeful, a place where they can make their morning coffee or tea, make a smoothie bowl after a workout or pour a beverage after work.” Most of these areas include a beverage fridge or fridge drawers, a built-in pullout trash can, a wine fridge, a sink, and cabinets for blenders, coffee pots or tea kettles. “It depends on the person, of course, but they are designed for how they want it to function,” she says.
Homes built in the last decade mostly feature open-concept floor plans, which usually include an open family room, kitchen and breakfast nook. But Adam is hoping to design cozier spaces in the next year. “No one wants to relax in their family room when they are sitting on the sofa and behind them is the kitchen,” she says. Dirty dishes, a pot of soup on the stove or clutter on the countertops does not create for a relaxing space. “Creating separation is good for your mental health,” she says. “You can step away from it and go back and clean it up later.” Plus, when a space is large and open, there is no breaking point for a designer to do something playful and fun on the walls or molding. “When it’s one huge space, it’s a lot harder to upholster or lacquer a wall,” she explains.
Her clients are also asking for game rooms. “We can’t do enough of them,” she says. “We are redoing spaces so that people can have a mahjong room. In our home we have a table built for mahjong, but when it’s not set up for that, we always have a puzzle out, too. Work on a puzzle for 20 minutes and it’s good for your brain and it slows things down. Then you can go back to running around or going to carpool,” she says.
Wallpaper has been trending for some years now, and it’s still holding strong in 2024, especially selections that boast texture, bold patterns and fabric. “In 2023, we launched our first wallpaper collection with Ever Atelier, Ever X Yates, and it led us to experiment with wall coverings in new ways. For example, new construction ceilings are typically much taller nowadays, and implementing wallpaper can help weigh it down and feel more proportional,” says Bryan Yates, principal designer of Yates Desygn. “In addition, we are currently framing three panels of a de Gournay print to work as a 9-foot-by-9-foot piece of art and create a more significant moment in a client’s dining space rather than using traditional panels as a series.”
Adam notes that adding the right wallpaper to a space helps to evoke a mood, too. “People are wanting texture as opposed to a super flat, quiet space. For instance, when you’re having a dinner party in a dining room covered in cool silk wallpaper, it makes people want to stay. We want our clients to have dinner parties that go on all night,” she says.
Source: dallasnews.com
Fewer homes in the U.S. were bought by investors in the first three quarters of last year, according to a Realtor.com report.
Deterred by high prices and mortgage rates, investor purchases fell 32.9% year-to-date in September compared to the previous year. Investor purchases also fell more than overall U.S. sales, which dropped 25% year over year during the same timeframe, according to the report released Wednesday.
Realtor.com analyzed U.S. deed records from January 2000 to September 2023 to determine the number of investor sales vs. purchases nationally and in U.S. metro markets.
More: Amazon’s Seattle Birthplace, a House Jeff Bezos Rented for $890 Month, Hits the Market
From January to September, investors were behind an average 10.8% of homes sales each month, down from 12% for the same period in 2022 but still higher than pre-pandemic levels. The peak share of investor purchases was 13.1% in February 2022.
“While widespread unaffordability hampered home-buyer activity in 2023, it cut more deeply into investor activity as investors saw less opportunity and their share of home purchases declined from the previous year’s levels,” said Hannah Jones, a Realtor.com research data analyst, in the report. “Despite investor activity falling from 2022 highs, the market remains appealing to investors, who continue to make a higher share of overall purchases than was common before the pandemic.”
Southern metropolitan areas experienced the greatest share of investor activity, at 12.1%, and the biggest year-over-year, at 2.9 percentage points. The Midwest followed, with investors accounting for 10.5% of sales, down 0.9 percentage points. The Northeast was the only region in which, on average, metros saw an increase in investor share of activity (8%, up 0.6 percentage points).
The report also showed that fewer investors presented all-cash offers, as market competitiveness continued to soften. The share of investors who paid in cash in the first three quarters was 60.2%, down from 64.3% during the same time period in 2022.
More: Roughly 60,000 U.K. Homeowners Can No Longer Claim to Be ‘Property Millionaires’ as Values Fall
As a result, there was a clear shift from large investors toward small investors in real estate investment transactions. The decline in cash offers created a greater opportunity for smaller investors to compete, as they are less likely than larger investors to have access to large amounts of capital. From January to September, 67.6% of investor purchases were by small investors, up from 54.1% during the same time in 2022. In 91 of the top 100 markets, small investors increased their share of investor purchases, following the national trend.
Miami was noted as being the highest-priced market on the list of areas with high investor share. With 5.9% of its listing viewership from overseas during the third quarter this might suggest that international investors are willing to pay more than the average U.S. property investor.
Mansion Global is owned by Dow Jones. Both Dow Jones and realtor.com are owned by News Corp.
MANSION GLOBAL BOUTIQUE: Warmth is In, Stark Minimalism is Out: 2024’s Hottest Design Trends
Source: mansionglobal.com
Columbus’s housing market is a dynamic landscape with various trends and factors influencing residents’ choices. From affordable neighborhoods to luxury living options, this article delves into the overall market trends, neighborhood insights, market dynamics and renting scenarios in the Arch City.
The Columbus, Ohio, housing market exhibits a diverse range of trends, catering to individuals with varying preferences and budget constraints. Let’s take a deeper dive into Columbus real estate.
Columbus’s real estate market is categorized as “somewhat competitive”. On average, homes typically sell close to the listed price and enter pending status within approximately 39 days. Alternatively, certain homes may sell for approximately 2% above the list price and enter pending status in around 26 days.
In December 2023, Columbus witnessed a 6.0% increase in home prices compared to the previous year, with a median selling price of $265K. The average time homes spent on the market in Columbus was 43 days, slightly less than the 46 days recorded last year. The number of homes sold in December this year was 731, a decrease from the 820 sold in the same period last year.
The dynamics of the Columbus housing market are influenced by many factors, including economic conditions, job opportunities and urban development initiatives. These factors fluctuate between the varying Columbus neighborhoods. Home prices, buyer demand and overall Columbus housing market trends are dependent on the individual neighborhoods.
The rental market in Columbus offers a diverse array of options, featuring varying prices and living experiences depending on the specific neighborhood. Let’s delve into the current status of the rental market in Columbus.
Columbus has experienced fluctuating rent prices, just as other large US cities have as well. Fifth by Northwest stands out with an average 1-bedroom apartment rent of $1,772, which is a 79% rise in rent YoY.
Areas like Northwest Columbus and Northern Lights saw a small change of 4-5%, raising their one-bedroom options to $1,427 and $965, respectively. Conversely, affordable options are available in Easton and Northeast Columbus, where average 1-bedroom rents are down 3%, bringing rent to $1,511.
In Columbus, the most affordable neighborhoods for renting a one-bedroom apartment include Forest Park East, with an average rent of $720, and Hyde Park, where the average rent is $749. Old North Columbus also offers competitive rental prices at around $750 on average.
For those searching for similarly priced options, North Linden and Indianola Terrace are worth considering, with one-bedroom apartments typically renting for $750 and $800 respectively. These neighborhoods provide more economical living options compared to the Columbus city average of $1,410 for a one-bedroom apartment, catering to budget-conscious renters seeking value and convenience.
Whether individuals are arriving in search of new opportunities or departing for different horizons, tracking these migration patterns contributes to a comprehensive understanding of the Columbus housing dynamics. According to Redfin market data gathered Oct 2023 – Dec 2023, 23% of Columbus homebuyers searched to move out of Columbus, while 77% looked to stay within the metropolitan area.
In Columbus, some of the more luxurious neighborhoods include Weinland Park, where the average rent for a one-bedroom apartment is approximately $1,802, and Dennison Place, with an average rent of $1,790.
For those looking for slightly less expensive options, Tuttle West and the Brewery District are attractive, with average rents for one-bedroom apartments at $1,740 and $1,695, respectively. These neighborhoods offer rental prices that are above the city average of $1,410 for a one-bedroom apartment in Columbus, yet they are known for their unique amenities and desirable locations.
Taxes play a significant role in the overall cost of living in any city. Columbus, Ohio’s minimum combined sales tax rate is 7.5%. This is the total of state and county sales tax rates.
Columbus’ housing market is full of diverse options, catering to a wide range of preferences and budgets. Whether you’re drawn to the affordability of specific neighborhoods or the luxury living options in the city’s busy and popular districts, this guide will assist you in making informed decisions in the pursuit of a home in the Arch City.
With a focused and persistent approach in your hunt for your perfect place, you’ll undoubtedly discover the right one in a remarkably short time.
Source: rent.com
Your first home has served you well, but now you’re ready to move on. What can you expect as a second-time homebuyer? Whether it’s been years or decades since you bought your home, you’ll find some aspects of the home buying process similar and others quite different.
With this guide, you’ll dive into the world of second-time home buying so you can feel confident taking the next step in your homeownership journey.
So, who exactly is a second-time homebuyer? A second-time homebuyer is someone who has previously owned a home and is purchasing another one. They may be moving with the desire to upsize, downsize, relocate or enhance their lifestyle. Or they may be interested in buying an investment property or vacation home.
Second-time homebuyers enjoy several advantages, including the following:
It’s important to note that not all previous homeowners are considered second-time homebuyers. If you’re applying for a conventional loan, you could qualify as a first-time homebuyer if you meet the following criteria:
First-time homebuyer status could give you access to certain programs that offer closing cost aid, down payment assistance, tax benefits and other types of support.
If you currently have a Federal Housing Administration (FHA) loan, you may be able to take out another FHA loan for a new primary residence.
The mortgage process for a second-time homebuyer generally follows the same steps as a first-time homebuyer. As with your first mortgage, a lender will evaluate the following during the underwriting process:
However, if you haven’t applied for a mortgage within the last 15 years, you may notice some differences:
While most mortgages require a down payment, you may qualify for a zero-down payment VA loan if you’re a veteran, service member or military family. With a VA loan, there are:
Already have a VA loan for your first home? As long as your new home will be your primary residence, you may be eligible for another VA purchase loan.
Keep in mind that the less you put down, the greater your monthly mortgage payment will be, and you’ll be paying more in interest over the long term.
While it is common to sell your current home and buy your new one simultaneously, you may choose to do one transaction before the other.
Most people choose to sell before buying, which offers the following benefits:
There are a few drawbacks to be aware of, including:
If you choose to buy your new home before selling your current one, you will:
Some of the disadvantages of taking this route include:
Whether you sell or buy first, you’ll need to get your current home market-ready. Here are some best practices and tips for home-selling success.
Research the housing market. The housing market plays a significant role in the home-selling process. It impacts your pricing strategy, potential time on the market, competition and negotiating power.
For example, in a buyer’s market, homes tend to remain listed for longer and may sell at a lower price. This is great for you as a buyer but not as a seller. You’ll want to price your house competitively, make necessary repairs and stage your home to attract buyers. You may also need to offer buyer incentives, such as paying for some closing costs.
On the other hand, during a seller’s market, strong demand for homes can create bidding-war conditions. You may attract eager buyers willing to pay a premium for your home. Plus, you may sell quickly, providing the down payment funds to purchase your new home soon.
Find a reputable and licensed real estate agent. While you may have used a real estate agent to find your first home, hiring one to sell your current house is a good idea. Selling a home involves many moving parts, and a real estate agent can guide you through the process. They are knowledgeable about market conditions, marketing, negotiating and the steps required to achieve a positive outcome.
Locate a lender. Secure an experienced lender that can help you with your mortgage once you’re ready to purchase a new home. You’ll want to find one that offers a range of loans and competitive rates, as well as a written commitment to lend you a specific amount of money, subject to certain conditions. This type of certification, such as a Pennymac BuyerReady Certification,* demonstrates that you are a serious buyer and can give you the confidence that you’ll be able to obtain the funding you need.
Deep clean, declutter and stage your home. Present your home in its best light by deep cleaning, decluttering and staging. These three steps enhance the visual appeal of your home, create a welcoming atmosphere and allow buyers to envision their belongings in the space.
Make repairs and updates. Potential buyers will be looking for a home in good condition. Make sure your exterior and landscaping are well maintained. Fix broken fixtures, give walls a fresh coat of paint and verify your plumbing, HVAC and electrical systems are all working properly. Consider getting a home inspection before putting your home on the market to identify priority projects. Your real estate agent is also an excellent resource for determining which repairs and updates you should focus on.
The second-time home buying and mortgage process is similar to that of a first-time homebuyer. You’ll need to:
But while the process is basically the same, some other factors, such as those below, may have changed and will influence your next home purchase.
As you navigate the second-time buying process, take into account the following financial considerations:
Shifted market conditions. The real estate market might have changed dramatically since your first home purchase. For example, if you purchased your current home in a buyer’s market, you perhaps had a lot of options and negotiating power. If it’s a seller’s market now, you might encounter tight inventory. Listed homes will sell rapidly, and you may need to be prepared to pay more and forego contingencies to get the home you want.
Your financial situation. How has your financial status evolved over the years? Has your income increased? What expenses do you have now that you didn’t have when you bought your home? Your current financial health will play a role in what loans you will qualify for.
Mortgage underwriting changes. Over the past 15 years, mortgage qualifications have become more stringent and interest rates may have changed significantly. However, if your financial circumstances have improved, you may have increased financing opportunities.
As a second-time homebuyer, you can take advantage of all that equity you have built over the years and put it toward your new home. After closing, you’ll receive the proceeds from your home sale minus any outstanding mortgage balances and transaction costs. You can use those proceeds, as well as any additional savings, for a down payment.
While there are many programs to help first-time homebuyers, there are some that assist individuals in purchasing their second home. Visit the U.S. Department of Housing and Urban Development (HUD) or a local government website to explore options in your area. And remember, if you meet first-time homebuyer criteria, don’t rule out first-time homebuyer programs.
In terms of mortgages, second-time homebuyers have numerous options, including conventional, FHA and VA loans. A Pennymac Loan Expert can help you compare loans and work with you to find the one that best fits your needs.
The main differences between first-time and second-time home buying are typically related to mortgage considerations, market conditions and experience.
As a second-time homebuyer, you will not be eligible for grants and other initiatives that aim to assist first-time buyers in obtaining down payment funds. This means that you will likely need some down payment. If you are selling your home, you can use the sale proceeds for your down payment.
Today’s stricter underwriting practices, including more stringent credit standards, are aimed at protecting consumers and the housing market. However, individuals with credit challenges may find it more difficult to qualify for a favorable home loan.
You can leverage your prior experience as a second-time homebuyer. You’ve been through the home buying and mortgage process and may be familiar with the documentation required and the timeline involved. And while the process and market have evolved over the years, your knowledge can equip you with valuable insights and confidence throughout the journey.
Check out these FAQs for answers to some of the most common questions that second-time homebuyers have about mortgages.
Yes, Federal Housing Administration (FHA) loans are available to qualified homebuyers who wish to put less than 20% down on their home purchase. Income, debt and credit history requirements are more flexible than conventional mortgages.
FHA loans are also a great option for borrowers who may want to put more than 20% down. They allow for a 580 credit score, whereas conventional loan pricing gets expensive the lower the credit score is.
Common requirements for second-time homebuyers depend on the type of loan, but a lender will consider your credit score, income, debt and down payment when evaluating your mortgage application.
Yes, Federal Housing Administration (FHA) loans and VA loans are available to second-time buyers. States and local governments may also offer programs to help second-time homebuyers. Check the U.S. Department of Housing and Urban Development website or your local government website to explore available options in your area.
Moving to your next home is exciting, but being prepared before diving into the home-selling and buying process is essential. Reach out to a Pennymac Loan Expert who will help guide you through the mortgage process, answer your questions and discuss a variety of competitive rates and loan options.
*As long as the sales price does not exceed the appraised home value.
**Customers with a Pennymac BuyerReady Certification prior to locking any Pennymac purchase loan get $1,000 applied as a discount off total closing costs and/or principal curtailment, subject to investor guidelines. Excludes Jumbo, refinance, third-party and in-process loans. Offer subject to change or cancellation without notice.
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Source: pennymac.com
“Home prices are likely stabilizing as well, so smart homebuyers will get in on the market ASAP, as the average monthly mortgage payment is not going to get that much cheaper in the months ahead.” Alicia Huey, chairman of the National Association of Home Builders, pointed out the role of scarce existing home inventory and … [Read more…]
MoMo Productions/ Getty Images; Illustration by Austin Courregé/Bankrate
Portions of this article were drafted using an in-house natural language generation platform. The article was reviewed, fact-checked and edited by our editorial staff.
A VA loan is a great option for you if you’re a qualifying active-duty military personnel or veteran. They often have more relaxed financial requirements than conventional loans, requiring no down payment or private mortgage insurance. They also typically have lower interest rates than FHA and conventional loans.
Here’s a breakdown of what VA loans are, how they work and how you can get one.
A VA loan is a loan guaranteed by the U.S. Department of Veterans Affairs (VA). That’s not to say the VA provides these loans. Instead, mortgage lenders offer VA loans, knowing that the government guarantees them. This makes lenders more confident in lending, often offering a VA loan with a lower interest rate than a conventional mortgage.
The VA doesn’t officially set a credit score requirement for these loans. Instead, it leaves this up to the lender, with lenders requiring anywhere from a 580 to 640 minimum score. VA loans don’t require a down payment, which can make homeownership more attainable for those who qualify because you’ll need less money upfront.
Getting a VA loan is similar to securing a conventional loan.
Basically, you fill out paperwork from the VA that verifies your eligibility for the program. You also receive what’s known as your entitlement, which is the dollar amount guaranteed on each VA loan. While VA loans technically have no loan limit, lenders might be willing to loan up to four times the amount of your entitlement.
You can get a VA loan with no money down and, unlike other loans, you won’t have to pay for mortgage insurance. That’s because the government guarantees your loan. However, you’ll need to pay a funding fee, which costs a certain percentage of the loan total. This fee keeps the program functioning so future veterans and service members can use it.
VA loan type | Description |
---|---|
VA mortgage | Allows qualified service members to purchase a home with no minimum down payment. |
VA construction loan | Eligible service members can use this loan to build the home of their dreams. |
VA rate-term refinance | Allows service members without an existing VA loan to change their loan term or secure a lower interest rate. |
VA cash-out refinance | Allows service members to swap their conventional mortgage with a VA loan, with an option to turn home equity into cash if needed. |
IRRRL loan | Allows service members to replace a VA mortgage with a VA Interest Rate Reduction Refinance Loan (IRRRL), which can offer lower interest rates. It can also be used to change from an adjustable-rate loan to a fixed-rate loan. |
VA rehab and refinance | Can be used by service members to finance the cost of improvements made to the home. |
VA jumbo loan | Allows service members to finance a home with a sales price exceeding the conforming loan limits. |
Native American loan | Available to Native American veterans to help them purchase, build, improve or refinance a home located on federal trust land. |
The VA sets service requirements for active-duty military personnel and veterans to qualify for a VA loan. You can check the full eligibility requirements on the VA’s website, but the basics are:
The first step in applying for a VA loan is getting a VA Certificate of Eligibility (COE). This certificate shows the lender that you meet the VA loan requirements for eligibility.
You can get a VA loan Certificate of Eligibility by applying through your eBenefits portal online or applying through your lender.
To apply, you need to provide some data based on your current status. Veterans need to provide a DD Form 214, and active-duty service members need a signed statement of service. A statement of service should include:
Different requirements may apply for National Guard or Reserve members, as well as surviving spouses. You can find more information through the VA’s benefits website, or by speaking to a qualified lender.
You should also keep these VA loan requirements and rules in mind:
It’s also possible to use home loan benefits after bankruptcy, as long as sufficient time has passed, typically two years after filing for Chapter 7 bankruptcy or 12 months after Chapter 13 bankruptcy.
For those who are eligible, VA loans have many benefits, but they also have drawbacks to consider.
Some of the key advantages of VA loans include:
Despite the many benefits, VA loans also have a few downsides to consider:
After you’ve obtained your COE and are ready to apply, there are a few steps you need to take:
If you’re struggling with your VA loan, there’s extra help available. The VA can help you negotiate with your lender if you can’t make payments. With the help of the VA, it’s possible to avoid foreclosure through loan modification or other repayment plans. Call 877-827-3702 if you need help.
If you’re purchasing a loan that costs more than $144,000, the bonus entitlement can be used.
Down payment | First-time use | Subsequent use |
---|---|---|
0%-5% | 2.15% | 3.30% |
5%-9.99% | 1.50% | 1.50% |
10% or more | 1.25% | 1.25% |
So, while a VA loan down payment isn’t required, it can save you money to make a down payment.
Quick note: Disabled veterans who receive disability benefits are exempt from the VA funding fee.
Also, it’s possible to wrap your VA closing costs into the loan amount. However, that increases how much you need to borrow and can cost you more.
Source: bankrate.com
(Bloomberg) — A gauge of pending US existing-home sales rebounded sharply in December to a five-month high, suggesting the recent drop in mortgage rates is helping to stabilize the resale market.
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The National Association of Realtors’ index of contract signings increased 8.3% to 77.3 after holding at a record low a month earlier, according to data out Friday. Last month’s advance — the largest since mid-2020 — exceeded all estimates in a Bloomberg survey of economists.
“The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices,” Lawrence Yun, NAR’s chief economist, said in a statement. “Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand.”
While 30-year fixed mortgage rates remain below 7%, a sustained decline is needed to encourage more homeowners to list homes that are financed at much lower levels. Until that develops, a limited inventory of previously owned homes will make it difficult for the resale market to rapidly gain traction.
A lack of listings have also worked to keep existing-home prices elevated. At the same time, builders have been filling the void with new construction. The number of new houses for sale at the end of 2023 rose to a more than one-year high, helping push those prices down.
The pending-home sales report is a leading indicator of existing-home sales given houses typically go under contract a month or two before they’re sold. Those sales are expected to increase 13% this year, according to NAR’s economic outlook. They slumped 18.7% in 2023.
The NAR’s report showed the index of contract signings for existing homes jumped nearly 12% in the South, the biggest US housing market. That was the largest advance since June 2020. Pending sales also surged 14% in the West and climbed 5.6% in the Midwest.
–With assistance from Kristy Scheuble.
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Source: finance.yahoo.com
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While there is no minimum requirement, most lenders prefer a credit score of 620 or above.
A VA home loan is a mortgage backed by the Department of Veterans Affairs (VA) for service members, veterans, and their families. The purpose of VA loans is to help veterans purchase homes with lower interest rates and better terms. While VA loans are typically easier to get approval for than conventional loans, private lenders still have certain requirements you must meet. One of these requirements is typically a good credit score.
However, the demands and sacrifices of military service can make maintaining a strong credit score a challenge. Read on to learn how to get a VA loan with bad credit.
Table of Contents:
The VA doesn’t set a minimum credit score requirement because the organization doesn’t provide home loans. However, the lenders that issue the loans will often have credit standards prospective borrowers must meet. VA lenders generally look for a minimum credit score of 620. For comparison, conventional lenders also typically require a 620 credit score.
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This requirement is flexible, and some VA lenders may approve borrowers with scores as low as 580.
Since there isn’t a minimum credit score requirement, other factors may help you secure a loan—even if your credit score is less than stellar. Known as compensating factors, these are financial strengths that counteract weaknesses in your application. According to the VA, compensating factors include the following:
In addition to your credit score, lenders typically have other financial requirements that help them determine if a borrower can qualify for a loan. Here’s an overview:
These requirements are set by lenders, not the VA, so they may be flexible.
You can still qualify for a VA loan even after filing for bankruptcy or foreclosure, though you may be subject to a waiting period before you’re eligible. Here’s an overview of how to get a loan after foreclosure or bankruptcy.
To qualify for a VA loan, you must meet the eligibility requirements from the Department of Veterans Affairs (VA). Below are the minimum active-duty requirements:
Note that those who have been dishonorably discharged are not eligible for VA loans. Check out the VA’s eligibility requirements for more information or to see if you qualify. If you meet the requirements, you can request a Certificate of Eligibility (COE) from the VA.
VA loans provide many benefits you would not get with other loan types. These advantages include:
There are different VA loan types to consider depending on your needs. Here’s an overview of each option to help you decide which loan type is right.
You can use a VA purchase loan to improve, buy, or build a home. While no down payment is required, putting money up front might help your chances of approval if you have low credit. Keep in mind that poor credit will likely result in a higher interest rate.
The Native American Direct Loan (NADL) is available to Native American veterans or non-Native American veterans who have a Native American spouse. You can use these loans to improve, buy, or build a home on federal trust land.
An interest rate reduction refinance loan (IRRRL) allows you to refinance your existing loan to get a lower interest rate and, therefore, reduce your monthly payments. This is a good option for borrowers with low credit scores since it doesn’t require a credit check. Instead, lenders will look at the payment history for your existing loan to determine approval.
A VA cash-out refinance loan allows you to tap into your home’s equity to receive cash. Most lenders require a 620 score or above to qualify. You may need to pay a VA funding fee on a refinance.
Even with a credit score under 620, eligible veterans can still get a VA loan. With a little time and dedication, you can improve your credit and put your VA benefits to use. Below are a few steps you can take to begin raising your credit:
By checking your credit score, you can gauge your chances of getting approved for a VA loan. Get your free credit score today to see where you stand.
Source: credit.com