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

Tips for your Property Tax Appraisal Hearing

18 Tips on How to Avoid Losing Your Tax Appraisal Hearing

• Do not get into a shouting match. 
• Forget about tax rates. The tax rate is not decided by the appraiser and has no place in either the Informal Meeting or the Formal Meeting. 
•  Do not talk about your inability to pay taxes. Not being able to afford paying taxes is immaterial. 
•  Do not assume that the purchase price reflects true value unless the home was acquired within six months before or after January 1^st of the appraisal year. Some appraisal districts use a time adjusted value. 
•  Do not compare your property to properties that are located outside of the CAD determined neighborhood or homogeneous subdivision. Find out your neighborhood boundaries before the hearing, not after! 
•  Do not show front-view photographs of your neighbors’ properties without showing a front view of your property. 
•  Crime and noise influences on your property values are difficult to establish unless you can show that you and your neighbors are unduly and repeatedly threatened. If actual sales have been affected, this makes for a stronger argument. 
•  Do not rest your argument entirely on minor settlement cracks in the walls, floors, and ceiling. Many homes in the Austin area are subject to minor stress cracks and settling. Should you consider the situation serious obtain a construction bid to correct the issue and provide that. 
•  Leaking roofs are considered by some CADs and ARB panels to be due to the lack of normal maintenance often reimbursable by insurance but in any event not due an adjustment. 
•  Do not volunteer information about improvements you have made to your property. Obviously if asked, reply in the simplest terms possible. The CAD may be aware of remodeling from reviews of building permits, drive by or aerial photography. 
•  Do not forget you have the right to cross examine the appraiser during the Formal Hearing. 
•  Use your special knowledge of the detrimental aspects of your neighborhood and property. 
•  If the appraiser is not comparing reasonably comparable properties be sure to not this out to the appraiser during an Informal Meeting or the Hearing Panel at the Formal Hearing. 
•  First impressions count so we suggest that you dress professionally. 
•  Avoid sexist or discriminatory remarks. 
•  Make eye contact during your presentation. 
•  Provide handouts and photos to each panel member therefore four copies. 
• Work diligently to make your presentations uncomplicated and simple.*

*Article Courtesy of Gordon Gorychka 
 
 

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

December 2015 Housing Statistics

December 2015 Statistics

 

• 2,390 – Single-family homes sold, 5% more than December 2014.
• $270,000 – Median price for single-family homes, 10% more than December 2014.
• $348,904 – Average price for single-family homes, 13% more than December 2014.
• 57 – Average number of days single-family homes spent on the market, 1 day more than December 2014.
• 1,646 – New single-family home listings on the market, 6% more than December 2014.
• 5,214 – Active single-family home listings on the market, 3% more than December 2014.
• 1,601 – Pending sales for single-family homes, 1% less than December 2014.
• 2.2 – Months of inventory* of single-family homes, unchanged compared to December 2014.
• $833,880,560 – Total dollar volume of single-family properties sold, 19% more than December 2014.

*Courtesy of the Austin Board of Realtors.

June 2015

 

 

Austin-area home sales top 3,000, $1 billion in volume in June 2015, prices remain high;
Mid-year results show 2015 on pace to exceed historical sales volume in 2014

Austin Board of REALTORS® releases real estate statistics for June 2015 and mid-year 2015

AUSTIN, Texas – July 21, 2015 – According to the Multiple Listing Service (MLS) report released today by the Austin Board of REALTORS® (ABoR), Austin-area home sales topped 3,000 sales for the first time since July 2013, increasing five percent year-over-year to 3,051 sales for the month of June. Mid-year statistics show that Austin-area home sales increased an average of four percent year-over-year to 13,917, putting 2015 on pace to potentially exceed 2014’s historical high in sales volume.

In June 2015, total dollar volume reached $1,018,625,166 and increased by eight percent compared to June 2014. Additionally, the total dollar volume of single-family properties sold in the first half of 2015 was $4,617,178,959, a year-over-year increase of 12 percent.

Barb Cooper, 2015 President of the Austin Board of REALTORS¬®, explained, “June’s increased home sales, combined with total dollar volume exceeding $1 billion for the first time ever, shows the amazing equity Austin homeowners have in the market and the powerful impact of real estate in Central Texas. However, this increase heightens the need to replenish and expand housing stock to help achieve sustainable growth.”

According to the report, the median price for Austin-area single-family homes increased eight percent year-over-year to $272,250 in June 2015, while average price increased two percent to $333,866 during the same time frame. Keeping with the upward trend over the last several months, less than three in 10 single-family homes sold in the Austin area were priced below $200,000.

Price increases are similar for the first half of 2015, with median price increasing 10 percent to $263,000 and average price increasing eight percent to $331,765. At the same time, homes spent an average of 50 days on the market, three more days than the same time last year.

“If this growth continues, 2015 could become another historical year for Austin-area home sales. Both homebuyers and sellers can expect a strong, competitive market for the rest of the summer selling season,” said Cooper.

June 2015 Statistics

• 3,051 – Single-family homes sold, five percent more than June 2014.


• $272,250 – Median price for single-family homes, eight percent more than June 2014.


• $333,866 – Average price for single-family homes, two percent more than June 2014.


• 42 – Average number of days single-family homes spent on the market, three days more than June 2014.


• 3,812 – New single-family home listings on the market, three percent more than June 2014.


• 6,701 – Active single-family home listings on the market, four percent more than June 2014.


• 3,023 – Pending sales for single-family homes, eight percent more than June 2014.


• 2.8 – Months of inventory* of single-family homes, unchanged compared to June 2014.


• $1,018,625,166 – Total dollar volume of single-family properties sold, eight percent more than June 2014.

2015 Mid-Year Statistics

• 13,917 – Single-family homes sold, four percent more than the first half of 2014.


• $263,000 – Median price for single-family homes, 10 percent more than the first half of 2014.


• $331,765 – Average price for single-family homes, eight percent more than the first half of 2014.


• 50 – Average number of days single-family homes spent on the market, three days more than the first half of 2014.


• 19,865 – New single-family home listings on the market, three percent more than the first half of 2014.


• 5,727 – Active single-family home listings on the market, eight percent more than the first half of 2014.


• 15,984 – Pending sales for single-family homes, five percent more than the first half of 2014.


• $4,617,178,959 – Total dollar volume of single-family properties sold, 12 percent more than the first half of 2014.

The following sections describe trends in other sectors of the Austin-area real estate market.

Townhouses & Condominiums

The volume of townhouses and condominiums (condos) purchased in the Austin area in June 2015 was 331, a 12 percent increase from June 2014. The median price for condos was $234,500, which is eleven percent more than the same month of the prior year. When compared to June 2014, these properties spent 8 more days on the market, or an average of 39 days.

For the first half of 2015, 1,510 Austin condos were sold, which is seven percent less than this time last year, while the median price was $226,250, or six percent more than the first half of 2014. Condos spent an average of 43 days on the market, one day fewer than the first half of 2014.

Leasing

In June 2015, a total of 1,861 properties were leased in Austin, which is fourteen percent more than June 2014. The median price for Austin-area home leases was $1,600, seven percent higher than in June 2014. In the first half of 2015, a total of 8,525 properties were leased in Austin, which is eight percent more than 2014, and the median lease price was $1,520, a five percent increase from the first half of 2014.


* The inventory of homes for a market can be measured in months, which is defined as the number of active listings divided by the average sales per month of the prior 12 months. The Real Estate Center at Texas A&M University cites that 6.5 months of inventory represents a market in which supply and demand for homes is balanced.