How to Save for Your New Home

Here are 6 tips to help you save for your new home!

 Approximately 52% of Americans plan to buy a home in the next five years, according to new report from the American Bankers Association, which leaves 1,825 days to save anywhere from a 3% to 20% down payment.

So, it’s important to start saving now, especially since for many borrowers, the down payment is the biggest obstacle of homeownership

In recognition of American Housing Month, the American Bankers Association Foundation highlighted six tips to help consumers cut costs and start saving.
 
1. Develop a budget and timeline:

Start by determining how much you’ll need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you’ll be ready to transition from renter to homeowner.  

2. Establish a separate savings account:

Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you’ll be less likely to tap into it when you’re tight on cash. If you received a tax refund, consider putting all or a portion into this account.

3. Shop around to reduce major monthly expenses:

It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.

4. Monitor your spending:

With online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings.

5. Look into state and local home-buying programs:

Many states, counties and local governments operate programs for first-time homebuyers. Some programs offer housing discounts, while others provide down payment loans or grants.

6. Celebrate savings milestones:

Saving enough for a down payment can be daunting. To avoid getting discouraged, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000 total, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process.

“A down payment is often the largest single payment a consumer makes in their lifetime and saving for it isn’t easy,” said Corey Carlisle, executive director of the ABA Foundation. “However, with a few changes, consumers can put themselves on track to make their homeownership dream a reality.”
On of the top myths about down payments is that borrowers need to put 20% down.

“Today, a 20% down payment is not required and depending on the buyer’s situation, it may not be optimal. Homeownership programs allow buyers to save on the down payment and retain savings for home maintenance and improvements. Today’s programs include grants, first mortgages with below-market interest rates and annual tax credits,” said Rob Chrane, CEO of Down Payment Resource.

Borrowers have more options now, with the growing popularity of the 3% down that many major lenders have gone to. And, one of the nation's largest nonbank lenders, Quicken Loans, is even offering certain borrowers the opportunity to put only 1% down on a mortgage.*

*Article Courtesy of HousingWire

Affordable Housing Comes to Austin

5 New Affordable Housing Developments in Austin

One of the downsides of Austin’s hot housing market is that it can be difficult for families in lower income brackets to find a house. Fortunately, there are several new affordable housing developments expected to open within the next two years. Here are five new developments to watch for.

Cardinal Point
Cardinal Point is slated to open in 2017 in the Four Points community of west Austin. It will feature 140 units and will be a great place for families, as it is located in the highly-rated Leander Independent School District. Families living at the property will have access to free education, financial stability and health programs right where they live. There will also be a Community Learning Center with after-school and summer learning programs, ESL classes, and fitness classes like Zumba and yoga. 11011 1/2 Four Points Drive, Austin. For more information, contact Foundation Communities at 512-447-2026.

Monarch at Lakeline Station Apartments –
Lakeline Station is scheduled to open in late 2016. It is located in northwest Austin and will feature 141 units. It is expected to open in December 2016. The apartments will be conveniently located near Capital Metro’s Lakeline station. The developer of the project is MGroup Holdings Inc., based in Houston. 9800 block Lake Creek Parkway, Austin. For more information, contact MGroup Holdings at (262) 439-4200.

Windy Ridge
Realtex, in partnership with Generation Housing Development, broke ground in October 2014 on Windy Ridge Apartments. The property features 120 units with one- through three-bedroom options. Also in Leander ISD, amenities include a clubhouse, pool, dog park, covered parking and energy-efficient appliances. 10910 Ranch Road 620 N., Austin. For more information, contact Realtex at 512-306-9206.

Tuckaway Apartments
This $43 million development will be built on a 17.5-acre site in Cedar Park. Tuckaway Apartments will feature a number of amenities including a swimming pool, splash pad, fitness center, business center, dog park, two playgrounds and masonry exteriors. While the site’s current zoning allows for 20 units per acre, or 340 units, Tuckaway would have only 256 units, which would allow for a two-acre public park, more green space and a buffer along Bagdad Road. It is also located in Leander ISD. 1740 Bagdad Rd., Cedar Park. For more information, contact Pedcor Investments at 317.587.0320. 

Aldrich 51
Located in the heart of Austin, Aldrich 51 will be located in the highly desirable Mueller community, a mixed-use community featuring shopping, restaurants and walking trails. Of the development’s 240 units, 85 percent will go to those in need in the community. Working adults can choose from a studio, one, two, and three bedroom unit. The only qualification is that the families earn 30 to 60 percent of the median family incomes in Austin, a range between $32,000 and $41,250 for a family of four. Aldrich 51 is projected to open in June 2017. Units will range from $620 to $1,200 per month. Located at 2604 Aldrich Street, Austin. For more information, contact DMA Companies at 512-328-3232.

Article Courtesy of Austin Relocating Guide

10 Most Common Questions When Buying A Home

• What’s the first step of the home buying process?

• Answer: The Mortgage Pre-Approval.

Unless you are paying cash for a house, you will need to get a mortgage. In order to know how much home you can afford, you will need to get pre-approved for a loan. This is the first-step in the home buying process.

•   How Long Does it Take To Buy a Home?

• Answer: Around 30 days

The timeline for finding a house varies greatly from person to person. Once you find a house and have an accepted offer, it usually takes around 30 days to close.

• What Does A REALTOR® Do?

• Answer: Almost everything.

A REALTOR® is your most valuable asset when buying a home. They will walk you through every part of the home buying process. They will educate and inform you of all your options. They will represent you throughout the transaction and beyond. 

There is a difference between a REALTOR® and a real estate agent; many people do not know this. A REALTOR® is regulated by the National Association of REALTORS® and subscribes to a strict Code of Ethics. A real estate agent does not. It is recommended that you work with a licensed REALTOR® to avoid potential problems.

• How Much Do I Have To Pay a REALTOR® as a Homebuyer?

• Answer: Nothing

In most cases, you do not have to pay your REALTOR® anything to help you purchase a home. The sellers pays their REALTOR® a fee, and then that listing agent pays the buyers agent for bringing the buyer and facilitating the transaction. 

• What’s Your Best Advice for First-Time Homebuyers?

• Answer: Trust the Professionals.

Beware of advice from people who do not work in the industry. Real estate is a popular topic and almost everyone feels like they have some great insight to offer. In reality, the people who know best are the people that work in the business. Good REALTORS® have sold hundreds (maybe thousands) of properties. We know what to expect and what to look out for. Friends and relatives have only bought and sold a few homes, if any at all. Buying and selling a couple of homes does not make someone a well-rounded source of information. Be confident in your decisions and trust the professionals. 

• What Kind of Credit Score Do I Need to Buy a Home?

• Answer: 620+

A 620 credit score, or higher, is recommended. As you are probably aware, a higher credit score offers better lending terms. This is an ever evolving topic, however, as loan requirements are constantly changing. There are some lenders who will approve buyers with a 580 score, sometimes even lower. Your loan officer will be the best source to give you a current answer for today’s lending requirements.

• Are There Special Home Buying Programs That I Should Know About?

• Answer: Yes

There are some great home buying programs to research. The main ones would be VA loans, USDA loans, and FHA loans. Knowing the difference between these loan types is very important.

• How Much Money Do I Need for a Downpayment?

• Answer: It depends on your loan type. Usually 3% to 5% down.

The most common answer is 3% to 5% of the purchase price. FHA loans dropped their requirement from 3.5% to 3.0%. There are also some conventional loans that only require 3% down. Veterans are usually eligible for a VA loan, which requires no money down. Properties in rural areas are usually eligible for a USDA loan, which also requires no money down.

• What Other Fees Are There, Besides the Downpayment?

• Answer: Mainly loan origination and closing costs.

The downpayment is usually the largest cost associated with buying a house. Lending fees are the second largest costs to homebuyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees, depending on the loan type. Conventional loans usually have lower loan origination fees, but require more money down. Your loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs.

•  When do I get the keys?

• Answer: At Closing

Under normal circumstances, you will get the keys at the closing. A closing typically takes about an hour. In some cases, the lender will need time to fund the loan and you will need to pick up the keys after the loan has been funded. If you have a Friday evening closing and the loan cannot fund until Monday, you may not get the keys until Monday. Make sure to coordinate your closing to get the keys on the same day, if that is what you need.*

*Article Courtesy of GreatColoradoHomes.com.  

Homestead Tax Exemption Deadline is April 30th

An exemption removes part of the value of your property from taxation and lowers your tax bill. In order to qualify for the online Homestead Exemption filing, the property owner must have owned and occupied the property as of January 1st of the current tax year. You must file an Application for Residential Homestead Exemption with the county appraisal district between January 1st and April 30th of the tax year.  Once you receive the exemption, you do not need to reapply unless the chief appraiser sends you a new application.  In that case, you must file the new application. 

 If you need additional information on homestead exemptions, please contact me.

5 Misconceptions about Down Payments

5 Misconceptions about Down Payments

Myth 1: Programs are only for first time homebuyers. While first time homebuyer programs may be common, it's important to note that the definition of a first time homebuyer is someone who has not owned a home in three years.  In addition, the index find that 37% of programs do not have a first time homebuyer requirement.

Myth 2: Homeownership programs make financing more difficult. There are now more than 2,400 programs available across the country (206 in Texas) and 85 percent have funds available for homebuyers. It’s important for new buyers to seek homeownership education. It’s often a requirement for down payment programs and it gives buyers confidence with the home buying process, financing options, including down payment programs, and budgeting.

Myth 3: You need to put 20 percent down. Today, a 20 percent down payment is not required and depending on the buyer’s situation, it may not be optimal. Homeownership programs allow buyers to save on the down payment and retain savings for home maintenance and improvements. Today’s programs include grants, first mortgages with below-market interest rates and annual tax credits.

Myth 4: Programs aren’t available in my area. There are programs available in every community across the country – rural and urban. It’s important for buyers to search for programs early in their home buying journey because it may help determine the most affordable part of town or price point.

• There are 19 programs available nationwide.
• 24 percent of programs are available statewide, offering broad opportunities not specific to a county or neighborhood. Statewide programs can often be layered with local programs.
• States with the greatest number of homebuyer programs, ranked in order:
  
  • California (412)
  • Florida (230)
  • Texas (206)
  • Maryland (111)
  • New York (77)
  • Massachusetts (73)
  • Pennsylvania (71)
  • Colorado (67)
  • Georgia (63)
  • Washington (59)
• Complete list of state-by-state data.

Myth 5: It’s too expensive to buy in my market. More than 14 percent of programs are designed for individuals providing an important community service, including educators, protectors, healthcare workers, veterans and other special circumstances. Especially helpful in high cost markets, the programs help workers live in the community they serve.*

*Article courtesy of Austin Board of Realtors

First Time Home Buyer's Assistance Programs

First time home buyer in Travis County? Looking for your dream home? 

Check out this helpful link for first time home buyer's assistance program for buyer's in Travis County.  

https://www.traviscountytx.gov/corporations/housing-finance/down-payment-assistance