WHICH DOWN PAYMENT STRATEGY IS RIGHT FOR YOU?

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You’ve most likely heard the rule: Save for a 20-percent down payment before you buy a home. The logic behind saving 20 percent is solid, as it shows that you have the financial discipline and stability to save for a long-term goal. It also helps you get favorable rates from lenders.

But there can actually be financial benefits to putting down a small down payment—as low as three percent—rather than parting with so much cash up front, even if you have the money available.

THE DOWNSIDE

The downsides of a small down payment are pretty well known. You’ll have to pay Private Mortgage Insurance for years, and the lower your down payment, the more you’ll pay. You’ll also be offered a lesser loan amount than borrowers who have a 20-percent down payment, which will eliminate some homes from your search.

THE UPSIDE

The national average for home appreciation is about five percent. The appreciation is independent from your home payment, so whether you put down 20 percent or three percent, the increase in equity is the same. If you’re looking at your home as an investment, putting down a smaller amount can lead to a higher return on investment, while also leaving more of your savings free for home repairs, upgrades, or other investment opportunities.

THE HAPPY MEDIUM

Of course, your home payment options aren’t binary. Most borrowers can find some common ground between the security of a traditional 20 percent and an investment-focused, small down payment. Your trusted real estate professional can provide some answers as you explore your financing options.

Experts Predict a Strong Housing Market for the Rest of 2019

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We’re in the back half of the year, and with a decline in interest rates as well as home price and wage appreciation, many are wondering what the predictions are for the remainder of 2019.

Here’s what some of the experts have to say:

Ralph McLaughlin, Deputy Chief Economist for CoreLogic

“We see the cooldown flattening or even reversing course in the coming months and expect the housing market to continue coming into balance. In the meantime, buyers are likely claiming some ground from what has been seller’s territory over the past few years. If mortgage rates stay low, wages continue to grow, and inventory picks up, we can expect the U.S. housing market to further stabilize throughout the remainder of the year.”

NAR

“We expect the second half of year will be notably better than the first half in terms of home sales, mainly because of lower mortgage rates.”

Freddie Mac

“The drop in mortgage rates continues to stimulate the real estate market and the economy. Home purchase demand is up five percent from a year ago and has noticeably strengthened since the early summer months…The benefit of lower mortgage rates is not only shoring up home sales, but also providing support to homeowner balance sheets via higher monthly cash flow and steadily rising home equity.”

Bottom Line

The housing market will be strong for the rest of 2019. If you’d like to know more about your specific market, contact me to find out what’s happening in your area.

SOURCE: KeepingCurrentMatters.com

10 Homebuying Acronyms You Need to Know

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The homebuying process is full of acronyms and if you're unfamiliar with them, it can be hard to understand what you're agreeing to.PMI, APR, LTV… say what?

Don't stress when you hear acronyms you don't recognize – I’m here to help!

Let's get started with some of the most important acronyms and their definitions, so you can sound like a pro as you go through the homebuying process.

  • APR (Annual Percentage Rate): The annual percentage rate tells you the annual cost of borrowing money based on the loan amount interest rate, and certain others fees. The APR is the bottom-line number you can use to shop and compare rates among lenders.

  • FRM (Fixed-Rate Mortgage): A fixed-rate mortgage has an interest rate that does not change during the entire term of your loan. This is the most common type of mortgage, giving you certainty and stability over the life of the loan.

  • ARM (Adjustable-Rate Mortgage): A adjustable-rate mortgage usually give you lower monthly payments at the onset, but over time your payments will change with interest rates. With this type of mortgage your interest rate adjusts after an initial period — typically 3, 5 or 7 years — and resets periodically.

  • LTV (Loan-to-Value): The loan-to-value ratio divides the amount of money borrowed by the appraised value of the home and tells you how much of your home you own versus how much you owe on your mortgage. Lenders use it to help evaluate the risk and terms of your loan.

  • DTI (Debt-to-Income): The debt-to-income is the percentage of your monthly income that goes toward your monthly debt payments. Lenders typically use this to measure your ability to manage monthly payments and repay debts.

  • PMI (Private Mortgage Insurance): Private mortgage insurance is an insurance that protects lenders from losses if a homeowner is unable to pay their mortgage. It is required for homebuyers who make down payments that are less than 20% of the home purchase price. Typically, PMI will be incorporated into your monthly mortgage payment.

  • P&I (Principal and Interest): Principal and interest are the portion of your monthly mortgage payment that goes toward paying off the money you borrowed to buy your home. For most homeowners your principal and interest make up the majority of your monthly mortgage payment — but not all of it.

  • PITI (Principal, Interest, Taxes and Insurance): Together, principal, interest, taxes and insurance make up your total monthly mortgage payment. Calculating your total monthly payment, not just principal and interest, is an essential part of the loan approval process because it will give you a more accurate picture of the costs of homeownership.

  • UPB (Unpaid Principal Balance): The unpaid principal balance is the amount of principal still owed on a loan. On a typical monthly mortgage payment, a portion of your payment is applied to the interest and a portion is applied to the principal. The following month's interest is based on your UPB. You can check how much how much of your payment is going towards your principal by looking at your amortization schedule.

  • HOA (Homeowners Association): 20% of America's homeowners that live within a community governed by a Homeowners Association. If you are considering buying in one of these communities, it's important that you pay your fees as scheduled – typically monthly, quarterly, or annually. HOA fees vary from community to community and may cover services such as trash removal, lawn care and maintenance for common areas, pest control.

Words matter! Learn your homebuying lingo now so that when it's time buy a home you can talk with confidence about one of the most important investments you'll ever make. To learn more about the homebuying process 

SOURCE: FreddieMac.com

3 Powerful Reasons To Buy A Home Now

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Whether you are a first-time buyer or looking to move up to the home of your dreams, now is a great time to purchase a home.

Here are three major reasons to buy today.

1. AFFORDABILITY

Many people focus solely on price when talking about home affordability. Since home prices have appreciated throughout the past year, they assume homes are less affordable. However, affordability is determined by three components:

  • Price

  • Wages

  • Mortgage Interest Rate

Prices are up, but so are wages – and interest rates have recently dropped dramatically (see #2 below). As a result, the National Association of Realtors’ (NAR) latest Affordability Index report revealed that homes are MORE affordable throughout the country today than they were a year ago.

“All four regions saw an increase in affordability from a year ago. The South had the biggest gain in affordability of 6.9%, followed by the West with a gain of 6.0%. The Midwest had an increase of 5.8%, followed by the Northeast with the smallest gain of 1.8%.”

2. Mortgage Interest Rates

Mortgage rates have dropped almost a full point after heading toward 5% last fall and early winter. Currently, they are below 4%.Additionally, Fannie Mae recently predicted the average rate for a 30-year fixed mortgage will be 3.7% in the second half of 2019. That compares to a 4.4% average rate in the first quarter and 4% in the second quarter.

With mortgage rates remaining near historic lows, Fannie Mae and others have increased their forecasts for housing appreciation for the rest of the year. If home price gains are about to re-accelerate, buying now rather than later makes financial sense.

3. Increase Family Wealth

Homeownership has always been recognized as a sensational way to build long-term family wealth. A new report by ATTOM Data Solutions reveals:

“U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since purchase of $67,500, up from an average gain of $57,706 in Q1 2019 and up from an average gain of $60,100 in Q2 2018. The average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of original purchase price.”

The longer you delay purchasing a home, the longer you are waiting to put the power of home equity to work for you.

BOTTOM LINE

With affordability increasing, mortgage rates decreasing, and home values about to re-accelerate, it may be time to talk with me to determine if buying now makes sense for your family.

Consider This: When To Refinance

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Refinancing your mortgage is something most homeowners consider at least once throughout the lifespan of their home loan. It allows you to pay off your previous loan by applying for a new one that has better financial advantages.

While there are many good reasons to refinance, here are five common ones.

  • Scoring a lower interest rate. The number one reason homeowners decide to refinance is to secure a lower interest rate on their mortgage. Not only does this save you money in the long run and decrease your monthly payment, but you can start building equity in your home sooner.

  • Using an improved credit score. Even if interest rates have not dropped in the market, if you’ve improved your credit score over the last few years, you may be able to reduce your mortgage rate.

  • Shortening the loan’s term. If interest rates are decreasing, there is a chance you may be able to get a shorter loan term with little to no change in your monthly payment, allowing you to pay off your loan sooner.

  • Switching from an adjustable rate to a fixed rate. If you chose an adjustable-rate mortgage with great introductory rates when you initially financed your home, that rate may increase significantly over the years. By switching to a fixed rate while interest rates are low, you can protect yourself from future increases.

  • Cashing out home equity. If there is a big purchase or payment on the horizon, such as funding a wedding or going back to school, your best option may be to use the equity you’ve built in your home to borrow money at a lower cost.

May 2019 #MiniMarketReport: provided by Gwinn Bundy Real Estate

Our #MiniMarket report is out.  Spring has sprung and so have the opportunities for buyers.  Most areas are seeing an increase in inventory and days on market longer, this gives buyers time to decide on a purchase.  For Sellers, the good news is that prices are stable and the great weather makes it great for viewing your home.

Let us know if we can be of help with your Real Estate needs.

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April 2019 #MiniMarketReport: provided by Gwinn Bundy Real Estate

 

The numbers are in and February's record snowfall didn't slow down March at all! Both pending sales and new listing activity around Western Washington surged during March as buyers, sellers, and brokers defrosted. The current market is healthy for both buyers and sellers so reach out today to chat about what opportunity lies in store!

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December Newsletter from Gwinn Bundy Real Estate

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© Compass 2018 ¦ All Rights Reserved by Compass ¦ Made in NYC

Compass is a licensed real estate broker and abides by Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting or other professional advice outside the realm of real estate brokerage.

#MiniMarketReport November 2018 - Seattle and the Eastside

#MiniMarketReport: The latest numbers are in, but what’s the real story? Inventory is growing, but prices are still higher than they were this time last year. Thinking of selling? The market is very strong with trade up buyers looking and new hires coming to the area. And for buyers, this is your chance to finally have some choices. We have the market knowledge and expertise to help you succeed in this market. Reach out if you’re ready for a new home in the new year! #CompassEverywhere #FindYourPlace #ClientsFirst

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#MiniMarketReport September 2018 - Seattle and the Eastside

Our latest #MiniMarketReport is out and highlights the shifting market. For buyers, the opportunity to find a great home before the holidays is now possible. Insight for sellers: the number of buyers looking is still high, but they are being more selective. Presentation and marketing is more important than ever. Local knowledge of micro markets is key. Call me today and let’s discuss strategy for achieving your real estate goals. #ClientsFirst #FindYourPlace

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#MiniMarketReport August 2018 - Seattle and the Eastside

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#MiniMarketReport: Encouraging news for buyers and insight for sellers that strategic pricing and presentation is more critical than ever. The number of available homes is up 66%; experience and knowledge matter as we enter the new normal. I have the strategic skills necessary to accomplish your goals—call me today! #FindYourPlace

#AveNews: Seattle Ranked Best Big City to Live In, Tips & Tricks, Featured Listings & More

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We would love to provide you with information on the listings above or any other property you might be interested in. 

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