With spring on the way, the housing market is likely to remain busy over the next few months.
Our Home Loan Expert Brad Goodenough has the scoop on a wide range of financial happenings and how they affect your goal of owning or refinancing a home.
A few important points if you are looking to buy a home:
- You don’t need to put 20% down (or even 10%)!
- According to the Pew Research Center, a recent study of Millennials conducted by United Wholesale Mortgage showed that 87% of non-homeowning Millenials think they need at least 10% down to buy a home. That is not always true.
- In fact, a recent survey of 800 Redfin real estate agents showed that half of all successful homebuyers in their market typically put down less than 20%.
- What’s more, this study found that in general, 24.2% of successful homebuyers put down 3% to 5%.
- As one real estate agent explains, a down payment isn’t the only indicator of a quality offer. When receiving a down payment, sellers will often consult with the lender to see how confident they are that the loan will be approved. If the lender is confident, the seller will be too.
- Sending an offer letter with your offer to the seller can make a difference as well, as it indicates your commitment in the home – which can help make your offer more attractive regardless of your down payment.
Unless you are prepared to wait, now may be a good time to buy
- While we can’t say for sure what will happen in the future, rates are expected to continue rising in the near future. To optimize your long-term financial outlook, now may be a good time to buy a home if you have been on the fence. It’s likely that at some point, the rising prices will cause homebuying to slow down, leading the prices to level out or decline – but we can’t say when that will happen. The market is still hot today.
- Home prices in the Portland area continued to rise in January, improving upon their record levels.
- The limited supply of homes on the market has helped push prices higher. In Portland, the end of February saw just 3,109 homes on the market, according to RMLS.
- Young, aspiring homebuyers take note – prices are rising fastest among the lowest-priced homes – the ones first-time homebuyers are most often competing for.
If you have an adjustable-rate mortgage
Since the rates just rose (and are expected to continue rising): If you have an adjustable rate mortgage, make sure to plan the increased payments into your budget so you are prepared for the extra payments. Consider refinancing to a fixed rate – it may help you in the long run if rates do in fact continue increasing for the forseeable future.
Loan Limits Just Increased!
Fannie Mae has just increased the Loan Limit on a 30-year mortgage from $417,000 to $424,100. Although this is not a huge dollar increase, it is an important positive signal for homebuyers. If the trend continues, it will continue to allow more people to borrow more money and get better terms on their home loans!
Resources to help you get smarter about housing
- Attend our no-cost Homebuying seminars held monthly at our branches – check our Events calendar for the next one near you.
- Homebuying Financial Life Minutes – learn about homebuying quickly (on average 5-7 minutes) with our interactive, mobile-responsive online learning tool. Learn more about these interactive guides.
- Our No Appraisal Loan could help you close on your home faster if you qualify. It can also help you refinance your existing home loan.
- Contact one of our Home Loan Experts with any questions you may have.
Posted By: Jacob Schnee
About the Author: Jacob joined Unitus as Marketing Specialist in March 2015 and transitioned to Marketing Communications Specialist in March 2017. His experience has spanned hospitality, business development, consulting, and marketing in various industries along the east coast, west coast and in between. When he is not developing internal and external communications for Unitus, he is engaging in recreational fitness, studying personality types and exploring the outdoors with his wife and dog.