Use a Realtor • November 4, 2024

Is a Fixer Upper Right for You?

by Steve Vavrek

Looking to buy a home but feeling like almost everything is out of reach? Here’s the thing. There’s still a way to become a homeowner, even when affordability seems like a huge roadblock – and it might be with a fixer upper. Let’s dive into why buying a fixer upper could be your ticket to homeownership and how you can make it work.

What Is a Fixer Upper?

A fixer upper is a home that’s in livable condition but needs some work. The amount of work varies by home – some may need cosmetic updates like wallpaper removal and new flooring, while others might require more extensive repairs like replacing a roof or updating plumbing.

Because they need some elbow grease, these homes typically have a lower price point, based on local market value. In fact, a survey from StorageCafe explains that fixer uppers generally cost about 29% less than move-in-ready homes.

And that’s why, according to a recent survey, more buyers are considering homes that need a little extra work right now (see below):

If you’re looking for an option to get your foot in the door, and you’re willing to roll up your sleeves and do a bit of work, a house with untapped potential may be a good option.

Tips for Buying a Home That Needs Some Work

Before you buy a home that may need a makeover, here are a few things to keep in mind:

Choose a Good Location: You can repair a house, but you can’t change where it is. Make sure the home is in a neighborhood you like or one with increasing property values and a growing number of local amenities. This way, even after you spend money fixing it up, the house will be worth more later.
Budget for Surprises: Fixing up a house can take more time and money than you might think. Make sure you save room in your budget for unexpected repairs or other unknowns that might come up while you’re working on the house.
Get a Home Inspection: Before you buy, hire an inspector to check out the house. They’ll help you determine the necessary repairs, so you don’t end up with expensive surprises later.
Plan Your Priorities: When deciding what to tackle first, it helps to categorize your goals. Think of your home in three ways: the must-haves (essential repairs), the nice-to-haves (upgrades that would make life easier), and the dream-state features (luxuries you can add later). This will help you prioritize and stick to your budget.

Remember, the perfect home is the one you perfect after buying it. By starting with a fixer upper, you have the opportunity to customize a home to your liking while saving money on the initial purchase price. With careful planning, budgeting, and a little bit of vision, you can turn a house that needs some love into your perfect home.

Real estate agents are great at finding homes with potential. WE know the local market and can guide you to homes where smart upgrades can add value. With our help, you’re more likely to find a house that fits your total budget and has room for worthwhile improvements.

Bottom Line

In today’s market, where the cost of homeownership can be intimidating, finding a move-in-ready home that fits your budget can feel like a real challenge. But if you’re open to putting in a little work, you can transform a fixer upper into your ideal home over time. Call me today so I can help you explore what’s possible and find a place that’ll work for you.

Why Use a Realtor? • October 28, 2024

Why Your House Will Shine in Today’s Market

by Steve Vavrek

Even though there are more homes available for sale than there were at this time last year, there are still more buyers than there are houses to choose from. So, know that if you’ve got moving on your mind, your house can really stand out.

There are several key reasons why there aren’t enough homes to go around and understanding them will help you see why the market is working in your favor if you’re ready to make a move.

What’s Causing the Shortage?

1. Underproduction of Homes: For years, the industry hasn’t built enough homes to keep up with demand. As Zillow explains:

“In 2022, 1.4 million homes were built — at the time, the best year for home construction since the early stages of the Great Recession. However, the number of U.S. families increased by 1.8 million that year, meaning the country did not even build enough to make a place for the new families, let alone begin chipping away at the deficit that has hampered housing affordability for more than a decade.”

2. Rising Costs: Building materials, labor shortages, and supply chain disruptions caused by the pandemic have all made it harder and more expensive to build homes. This can either limit or stop new home construction in some areas.

3. Regional Imbalances: Some markets are more affected by the shortage of homes than others. Popular and more desirable areas have more people moving in faster than new homes can be built. The number of new building permits issued doesn’t always keep pace with job growth in these regions, and that leads to even tighter markets and higher prices.

How Big Is the Problem?

According to estimates from Real Estate News, the U.S. is facing a housing shortfall of roughly 3.3 million homes, based on an average of several expert insights (see graph below):

This shows there’s a significant number of homes that need to be built just to meet current demand from buyers. But what about future demand?

According to John Burns Research and Consulting (JBREC), over the next 10 years, the U.S. will need about 18 million new homes to meet projected demand, including homes for new households, second homes, and replacements for aging or unusable homes.

So, even though more homes are on the market compared to last year, there still aren’t enough of them to go around. This is where you can really win if you’re ready to sell your house.

What You Need To Remember

If you’re thinking about selling, the shortage of homes for sale means your house is likely to get some serious attention from buyers. It’ll take years to climb out of this inventory deficit, and the market is still very tight. So, when buyers are competing for relatively few homes like they are right now, that creates more interest in the houses that are on the market, putting upward pressure on prices and ultimately working in your favor.

And since every market is different, it’s important to work with a real estate agent who understands local trends. They can help you price your house right and create a strategy to attract the right buyers.

Bottom Line

While there are more homes for sale than there were at this time last year, there’s still a shortage overall. And this puts you in the driver’s seat as a seller. Reach out to me and my team at BHGRE Gaetano Marra Homes as we can help you take advantage of today’s market.

Why Use a Realtor? • October 20, 2024

5 Hidden Closing Costs Homebuyers Often Overlook

by Steve Vavrek

If you’re about to buy a home, you might think you’ve budgeted everything. But are you prepared for all the fees that come with closing?

Nearly 91% of buyers in the Zillow Consumer Housing Trends Report 2024 said they encountered at least one unexpected cost during the closing process.

Let’s break down these fees and help you avoid the same pitfalls, so your closing day goes as smoothly as possible.

1. The Loan Origination Fee

For 66% of homebuyers, the loan origination fee was the most unexpected cost. This fee covers the lender’s administrative costs for processing your loan, and it can range from 0.5% to 1% of the loan amount. While it’s a standard charge, many buyers don’t fully anticipate it, and it can add thousands to your closing costs.

Ask your lender upfront about the loan origination fee and negotiate if possible. In some cases, lenders may waive part of this fee, especially if you shop around.

2. Appraisal Costs

Appraisals are a necessary part of the home-buying process to ensure the property’s value doesn’t exceed the loan amount. But did you know that 54% of buyers didn’t expect to pay for this out-of-pocket? Appraisal fees typically range from $300 to $500 but can vary based on your location and the size of the home.

3. Title Transfer Taxes

State and local governments often charge taxes to transfer the title of the home from seller to buyer. More than half of buyers (54%) were caught off guard by these fees, which can vary significantly depending on your location. Here in [Market], buyers can expect to pay [a flat rate / a percentage based on the home’s value].

4. Title Insurance & Search Fees

Title insurance and title searches ensure there are no legal issues with the property’s ownership. But for 51% of buyers, these were unexpected costs during the closing process. Title insurance is essential because it protects you from any disputes over property ownership, but it’s not always top of mind when calculating closing costs.

5. Closing Costs: Higher Than Expected for Many

Closing costs can include everything from attorney fees to recording fees. According to the survey, 42% of buyers had closing costs that were higher than they anticipated. First-time buyers, in particular, were more likely to be surprised, with nearly half (49%) saying their final costs were above their expectations.

Expect your closing costs to be anywhere from 2% to 5% of the purchase price. To avoid surprises, ask your lender for a Loan Estimate early in the process. This document breaks down your expected closing costs. You’ll receive a final Closing Disclosure three days before closing that details the exact amount—be sure to review this in full once received.

How to Avoid Surprise Fees

Now that you know the costs that surprised buyers the most in 2024, here’s how to avoid sticker shock at closing:

Ask Questions Early: Don’t be afraid to ask your lender and real estate agent about any potential fees upfront. The more information you have, the better prepared you’ll be.
Get Multiple Quotes: Whether you’re buying title insurance or closing services, shop around to ensure you’re getting the best rate.
Plan for Flexibility: Budget for more than you think you’ll need. Having a cushion in place for unexpected costs will make the closing process less stressful.

Buying a home is one of the most significant financial commitments you’ll ever make, and no one likes surprises—especially expensive ones. By understanding the common hidden costs of closing and planning ahead, you can go into your closing day confident and prepared. Whether you’re a first-time buyer or have purchased multiple homes, these fees can sneak up on you. The key is to ask questions, plan ahead, and make sure you have a buffer in your budget to cover those last-minute expenses.

Why Use a Realtor? • October 18, 2024

Why Buying Now Is Worth It

by Steve Vavrek

Some Highlights

You may be torn between buying a home now or waiting. But don’t forget to factor in the equity you’ll gain as prices rise.
Experts forecast prices will climb over the next 5 years – and based on those forecasts, you could gain about $90k in equity in that time.
So, you could wait, but you’ll miss out on a lot of equity if you do. If you’re ready and able to buy, let’s connect so you can start growing your wealth now.

Why Use a Realtor? • October 16, 2024

The Benefits of Using Your Equity To Make a Bigger Down Payment

by Steve Vavrek

Did you know? Homeowners are often able to put more money down when they buy their next home. That’s because, once they sell, they can use the equity they have in their current house toward their next down payment. And its why as home equity reaches a new height, the median down payment has too.

According to the latest data from Redfin, the typical down payment for U.S. homebuyers is $67,500—that’s nearly 15% more than last year, and the highest on record (see graph below):

Here’s why equity makes this possible. Over the past five years, home prices have increased significantly, which has led to a big boost in equity for current homeowners like you. When you sell your house and move, you can take the equity that gives you and apply it toward a larger down payment on your new home. That’s a major opportunity, especially if you’ve had concerns about affordability.

Now, it’s important to remember you don’t have to make a big down payment to buy your next home—there are loan programs that let you put as little as 3%, or even 0% down. But there’s a reason so many current homeowners are opting to put more money down. That’s because it comes with some serious perks.

Why a Bigger Down Payment Can Be a Game Changer

1. You’ll Borrow Less and Save More in the Long Run

When you use your equity to make a bigger down payment on your next home, you won’t have to borrow as much. And the less you borrow, the less you’ll pay in interest over the life of your loan. That’s money saved in your pocket for years to come.

2. You Could Get a Lower Mortgage Rate

Providing a larger down payment shows your lender you’re more financially stable and not a large credit risk. The more confident your lender is in your credit score and your ability to pay your loan, the lower the mortgage rate they’ll likely be willing to give you. And that amplifies your savings.

3. Your Monthly Payments Could Be Lower

A bigger down payment doesn’t just help you reduce how much you have to borrow—it also means your monthly mortgage payment may be smaller. That can make your next home more affordable and give you a bit more breathing room in your budget.

4. You Can Skip Private Mortgage Insurance (PMI)

If you can put down 20% or more, you can avoid Private Mortgage Insurance (PMI), which is an added cost many buyers have to pay if their down payment isn’t as large. Freddie Mac explains it like this:

“For homeowners who put less than 20% down, Private Mortgage Insurance or PMI is an added insurance policy for homeowners that protects the lender if you are unable to pay your mortgage. It is not the same thing as homeowner’s insurance. It’s a monthly fee, rolled into your mortgage payment, that’s required if you make a down payment less than 20%.”

Avoiding PMI means you’ll have one less expense to worry about each month, which is a nice bonus.

Bottom Line

Down payments are at a record high, largely because recent equity gains are putting homeowners in a position to put more money down.

If you’re thinking about selling your current house and moving, reach out to ME. I’ll help you figure out how much home equity you have right now, and how it can boost your buying power in today’s market.

If Selling - Tips • October 13, 2024

Home Renovation Trends and What Homeowners Need to Know

by Steve Vavrek

Are you thinking about updating your home? You’re not alone. Over the past five years, 94% of homeowners completed a major renovation project. Whether it’s a fresh coat of paint or a full bathroom remodel, staying on top of the latest trends can help you make smart decisions that add value and enjoyment to your home.

But here’s the catch—78% of those renovations came with budget overruns, and many also encountered unexpected delays and even regret. Today, we’ll dive into the top renovation trends and share tips to help you navigate your next project with confidence.

Renovating vs. Relocation

With rising home prices and mortgage rates, many homeowners are choosing to stay put and invest in their current property rather than move. According to Clever Real Estate, 63% of homeowners prefer to remodel their homes instead of moving into one that’s already updated. Whether it’s to improve comfort, repair damage, or boost resale value, renovations can help tailor your living space to fit your evolving needs.

But practical reasons are not the only ones driving these decisions—renovating offers an exciting opportunity to create a more personalized space. In fact, 45% of homeowners say they renovate simply because they want to, not because they need to. From bold new color schemes to modern kitchen layouts, home improvements let you unleash your creativity.

Top Renovation Projects

#1—Bathroom Remodels

One of the most popular renovations, bathroom remodels top the list, with 37% of homeowners tackling this space. Modern bathrooms emphasize spa-like elements, with features like rainfall showers, freestanding tubs, and sleek vanities making frequent appearances. Updating your bathroom can not only improve comfort but also offer a solid return on investment when it comes time to sell.

#2—Interior Painting

A simple way to refresh your home, interior painting continues to be a top DIY project, with 33% of homeowners giving their walls a fresh look in 2024. Neutrals like white and gray remain popular, though many are experimenting with bold accent walls and statement colors to add a personalized touch.

#3—Energy-Efficient Upgrades

HVAC upgrades are a practical renovation that’s seen a rise in demand, with 30% of homeowners choosing to invest in more energy-efficient heating and cooling systems. In a time where energy savings are more important than ever, these updates can make your home more eco-friendly and reduce monthly utility bills.

The Costs of Home Renovations—78% Exceeded Their Budget

While home renovations can boost the value and comfort of your home, they often come with unexpected expenses. Nearly 78% of homeowners went over budget on their last renovation, with 44% exceeding their budget by $5,000 or more. To avoid this, it’s essential to factor in a buffer for unforeseen costs, whether you’re working with a contractor or handling the project yourself.

One of the biggest decisions you’ll face is whether to go the DIY route or hire a professional. While hiring a contractor may save you time and deliver higher-quality results, it can also be more expensive. According to a recent survey, 53% of homeowners who hired contractors went over budget, compared to 42% of DIYers. Whichever path you choose, make sure to research and plan thoroughly to avoid the most common pitfalls.

On top of renovation costs, it’s important to always have some savings for home maintenance or unexpected repairs. In 2025, 85% of homeowners spent money on unplanned repairs, with nearly half saying these surprise expenses have exceeded their home maintenance expectations.

Renovation Regrets—and How to Avoid Them

While home improvements can transform your living space, not all projects go as smoothly as planned. Of those who have remodeled in the past five years, 74% have regrets.

The most common regret? Overspending and renovations taking longer than expected. The key to avoiding these regrets? Setting a realistic budget, managing your time wisely, and ensuring clear communication with contractors.

For younger homeowners like Gen Z and millennials, the focus is often on projects that boost resale value. Yet, this group is also more likely to experience regret, with 82% of millennials and 89% of Gen Z expressing some form of renovation remorse. If resale value is your priority, keep in mind that sometimes smaller, well-executed updates can offer a better return on investment than large-scale projects.

Final Thoughts: Make Your Renovation Count

Renovating your home is a big decision, but it can also be incredibly rewarding when done right. Whether you’re fixing up your forever home or adding value before selling, staying informed on renovation trends and potential challenges is key to success.

If Selling - Tips • October 10, 2024

How Much Does It Cost To Sell My House?

by Steve Vavrek

If you’re toying with the idea of selling your house, you’re probably wondering how much it’ll cost. To be honest, the final number will depend on several factors like the offer you accept, if you help with your buyer’s closing costs, how many repairs you tackle, and more.

So, to give you a ballpark of what to expect, here’s some information on a few of the expenses you’ll want to be ready for (see graph below):

But here’s something that puts those costs into perspective. Most homeowners today have a substantial amount of equity built up in their homes, and that means they stand to make significant gains when they sell. Chances are, you do too. This can help quickly recoup these selling costs. You may even have enough equity leftover to put some toward your next home purchase too.

Let’s dive into a few of the costs from the graph above, so you have a bit more context on what they include and where you may be able to save some money, when it makes sense.

Closing Costs and Commission

These are the fees you’ll pay at the closing table to cover various aspects of the sale. You’ll have your own closing costs, and you may even offer to pay some of the buyers as a concession. As U.S. News Real Estate explains:

“Closing costs are fees that are paid to finalize the transaction and transfer ownership of the home to the buyer . . . Sellers can expect to pay 2% to 4% of the sale price of the home in fees and taxes on top of the agent commission. Based on the national median home sale price, this means that closing costs in 2023 for sellers are about $7,740 to $15,480. . .”

Taxes are going to vary by state and agent commissions depend on what you agree upon upfront. And keep in mind, that the numbers in the chart above are just an example, not exact figures. Not to mention, if you put money toward things like your property taxes, mortgage escrow, etc. as part of your current mortgage payments – there’s a chance you’ll get a credit back at closing that can help offset some of these selling expenses.

Pre-Listing Inspection and Repairs

One optional step some sellers take is having a pre-listing inspection. It gives you an idea of what may pop up later on in the buyer’s inspection – because those are the items a buyer may ask you to toss in a credit (or concession) to cover later on.

This allows you to get a jump on any repairs and tackle them before you list, so your house is set up to impress from the start.

Again, if you want to skip this step, an agent can help. They’ll be able to give you advice on things like paint colors, small cosmetic repairs, what buyers are looking for, and whether it’s worth tackling anything else ahead of time. This will help make sure you’re spending money on things that are most likely to net you a solid return on your investment.

Home Staging

As inventory grows, you may want to take a few extra steps to make sure your house stands out. Staging is an optional way to make sure your house shows well. It can include bringing in rental furniture if the house is vacant or art to warm up the walls. Some staging can even be done virtually once the photos are taken. But, in general, how much does it cost? According to Bankrate:

“Home sellers typically pay somewhere between $782 and $2,817 in home staging costs . . . but the price tag can vary widely.”

If you want to skip this step, you could opt to lean on your agent’s advice for what looks good and what may feel cluttered. A great agent will suggest things like removing a chair to open up the flow of a room, laying down a rug to add warmth to a space, or taking down photographs to de-personalize strategic areas.

Why Leaning on an Agent Is Key

If you’re looking to cut down on your costs, you have options. But be careful of where you trim. You may be able to skip staging or a pre-listing inspection since those are optional, but you don’t want to skimp and sell without a pro.

An agent is your go-to expert throughout the transaction. They’ll offer customized advice every step of the way, including how to stage the house and what repairs to tackle. This can help you avoid hiring an outside stager or having to pay for a pre-listing inspection.

But that’s not the only way your agent adds value. We will also create tailored marketing and pricing strategies that’ll highlight the house’s best assets and any work you did to get the home show ready. And that can actually help your house sell for more in the long run.

Bottom Line

If you would like a better picture of what you should expect when you sell your house? Let’s have a conversation today.

If Selling - Tips • October 2, 2024

Secrets To Selling Your House Quickly

by Steve Vavrek

Seeing your house sit on the market without any bites is the ultimate frustration. And unfortunately, some sellers are in that tricky spot today.

According to data from the National Association of Realtors (NAR), the average time a house spends on the market has increased over the past few years (see graph below):

A recent post from Realtor.com notes a similar trend:

“During the week ending Sept. 14, homes stayed on the market eight days longer compared to last year. With more choices available and mortgage rates expected to fall, buyers are taking their time, which means sellers will need to be patient and flexible.”

Some of that is because inventory has gone up, so buyers have more options. And higher mortgage rates have definitely slowed demand over the past two years, and that’s out of your control. But here’s the secret. There’s something you can control – it’s also where those other sellers missed the mark. They didn’t work with the right agent.

Make no mistake, with the right strategy and agent partner, your house can still sell quickly, even today.

If time matters to you, you need to partner with an agent who understands this shifting market. That agent will be your go-to resource on what buyers are looking for right now, and how to position your home to hit the mark.

Here are just a few tips I will be happy to walk you through. They may seem simple, but advice like this can make all the difference.

1. Competitive Pricing: One of the most critical factors in selling your home quickly is setting the right price. A local real estate agent will do a competitive market analysis by reviewing recent sales and current listings for your area. Then, they’ll use that data to make sure your home is priced accurately for today’s market. This strategic pricing approach is the best way to make sure you’re hitting the sweet spot on price. If you don’t lean on an agent for this, it can really slow your process down. As U.S. News says:

“. . . setting an unrealistically high price with the idea that you can come down later doesn’t work in real estate . . . A home that’s overpriced in the beginning tends to stay on the market longer, even after the price is cut, because buyers think there must be something wrong with it.”

2. The Home’s Condition: Homes that are well maintained, have great curb appeal, and are updated with modern finishes tend to sell faster. So, if speed is a priority, make sure your house makes a great first impression. An agent is a key resource on what buyers will be looking for, if staging is worthwhile, and what repairs you need to tackle before you list. Ramsey Solutions offers this advice:

“In the spirit of selling your home fast, take care of things now that will be a problem in the closing process. Talk to me about fixes you’ll need to make to pass the home inspection, like plumbing problems, roof damage, electrical issues, HVAC glitches. . . The TEAM and I at Better Homes and Gardens Gaetano Marra Homes have a fantastic network to assist you with these services.

These are issues you’ll be expected to take care of before any buyers close on your house—you might as well get ahead of the game to help your home sell faster.”

3. Incentives and Extras: If you want to stand out from those other homes on the market, offering incentives or concessions, like help with closing costs, a home warranty, or including additional items (like appliances or furniture) with the sale can sweeten the deal for buyers. The TEAM and I at Better Homes and Gardens Gaetano Marra Homes can suggest the right incentives to offer based on current market conditions and buyer expectations, so you can close the sale even faster.

Bottom Line

Selling a home quickly in a shifting market requires a strategic approach and an in-depth understanding of what buyers want. That’s why partnering with a local real estate agent is so important. As Forbes says:

“When time is of the essence, you can’t afford to take a chance on an inexperienced housing professional. Instead, you’ll want to work with a real estate agent who knows your market and has helped sellers in your situation before.”

Feel free to connect with me to make sure you’re set up for success.

Why Use a Realtor? • September 30, 2024

How Buyers are Adapting in Today’s Housing Market

by Steve Vavrek

For the first time since 2020, housing affordability improved year over year. This is largely due to a drop in mortgage rates, which have dipped from 7.07% to 6.09% over the past year. While this is undoubtedly great news for home buyers, affordability remains a challenge for many.

According to recent data, U.S. buyers now need to earn around $115,000 annually to afford the typical home, down 1.4% from last year. Yet, the average U.S. household earns only about $84,000 annually—27% less than what’s needed to buy a median-priced home.

Because of this, many buyers are finding themselves in positions where compromise is a necessity. But that doesn’t mean homeownership is off the table. Navigating these compromises smartly can help ensure you still get a home you love without overspending or sacrificing too much on your wish list.

Let’s dive into the most common compromises homebuyers are making in 2024, and how you can make decisions that work best for you.

The Top Compromises Buyers Are Making

Homes.com and Apartment Therapy recently conducted a survey on “The State of Home Buying,” asking 676 recent and prospective buyers, along with real estate professionals, about the home buying experience. According to the survey, here are the top compromises being made during the home search today:

Condos and Townhomes are Growing in Popularity

With single-family homes becoming less attainable for many, a significant percentage of buyers are shifting their focus to other property types. For those with a budget of less than $500,000, about 17% are now looking at condos and apartments, while 15% are exploring townhomes as an alternative.

These property types often provide more affordable options for buyers in desirable locations or those seeking to stay within budget. While a condo may not offer the spacious yard or privacy of a single-family home, it can provide a low-maintenance lifestyle with access to shared amenities like gyms and pools. Of course, when looking at a condo or townhome, you’ll need to factor in any HOA fees to your monthly payment.

Location, Location…Compromise?

It’s no surprise that location is a top priority for homebuyers. But as prices rise in sought-after neighborhoods, many are adjusting their searches. Recent buyers report that they were willing to widen their search area to find homes that fit their budget. In fact, 21% of buyers purchased outside their ideal neighborhood, and a third of current buyers are considering doing the same.

Being open to different areas can make all the difference in a competitive market. Expanding your search radius just a few miles can open up more affordable options that still meet your needs.

How to Make Smart Compromises Without Regret

Knowing where to compromise — and where to stand firm — is key to navigating today’s housing market. Here are some tips to help you make informed decisions:

1. Prioritize What You Can’t Change

While it may be tempting to focus on cosmetic features like flooring or paint color, those are often the easiest and most affordable changes you can make after purchasing a home. Instead, focus on the non-negotiables that are difficult to alter, such as the home’s layout, structural integrity, and location.

2. Keep Your Future Needs in Mind

As you search for a home, think about your current lifestyle and your future needs. Will this property suit your needs for the next five to ten years? Buying a condo now may seem like a great way to stay within budget, but if you’re planning to expand your family or want more space in the near future, it could lead to another home search sooner than anticipated.

3. Stick to Your Budget

While it may be tempting to stretch your budget to get a home you love, overextending yourself financially could lead to significant stress down the road.

Determine your monthly housing budget—and when looking at properties, be sure to factor in everything from your mortgage interest and principal, property taxes, homeowners insurance and HOA fees. Sticking to your budget ensures that you’re prepared not only for these payments but also for unexpected expenses that may arise after you move in.

Compromise Doesn’t Have to Mean Settling

By focusing on what truly matters — like location, structural integrity, and your long-term goals — and remaining flexible on other aspects, you’ll be well-positioned to make a smart purchase. And remember, working with an experienced real estate agent can provide valuable insights and guidance throughout the process, helping you make decisions with confidence.

In the end, buying a home is about finding the right balance between compromise and fulfillment — and with careful planning, your next home could be just that.

Mortgage News • September 24, 2024

The Down Payment Assistance You Didn’t Know About

by Steve Vavrek

Believe it or not, almost 80% of first-time homebuyers qualify for down payment assistance, but only 13% actually use it. And if you’re hoping to buy a home, this is a mission-critical gap to close – fast (see graph below):

Here’s what you need to know to make the most of your down payment in today’s housing market.

Amplify Your Down Payment Potential

For first-time buyers, the name of the game with down payments is making sure you’re taking advantage of all the resources out there designed to help you. And a bunch of them can get you to your goal faster than you may have thought possible.

For example, there are loan options that require as little as 3% down, or even 0% for certain qualified borrowers, like Veterans. And let’s not forget down payment assistance, like grants and other opportunities, that help you cover the upfront cost of your down payment.

If you’re interested in exploring those options and what you may be able to use to your advantage, connect with a trusted lender. Because if you don’t at least see what’s available, you could be leaving money on the table and missing your chance at buying a home. These resources can boost your down payment. And a higher down payment could help lower your eventual monthly mortgage payment, and even avoid or reduce your fees like private mortgage insurance.

Don’t Let News Headlines About Down Payments Scare You

There’s one more thing to address. News coverage has been talking about how the typical down payment is rising. A report from Redfin states:

“The typical down payment for U.S. homebuyers hit a record high of $67,500 in June, up 14.8% from $58,788 a year earlier . . . This was the 12th consecutive month the median down payment rose year over year.”

But don’t let those high dollars scare you. Just because the average down payment is rising doesn’t mean down payment requirements are going up. That’s a key piece of the puzzle to understand. It’s really just because people are choosing to put more down to try to offset higher mortgage rates, and current homeowners who are putting their equity to work are using that to increase their down payment on their next home. As HousingWire explains:

“. . . buyers are putting down a higher percentage of the purchase price to lower their monthly mortgage payment. And buyers also had more equity from their home sales, which gives them more cushion.”

Let’s break those two reasons down a bit:

1. A bigger down payment helps lower your monthly mortgage payment. Affordability has been a challenge for many buyers recently, which is why those who have the ability to make a bigger down payment are going to do so in an effort to lower their future housing costs.

2. Buyers who already own a home have a record amount of equity to leverage. Someone who bought a home a few years ago has gained a significant amount of value in their house, thanks to home price appreciation. These people can put down much more than the average first-time buyer who hasn’t owned a home yet.

Bottom Line

What’s the best thing to do? Talk with a trusted lender about your options. They’ll help you figure out where you stand today and how to access the resources you may qualify for. Because help is out there, you just need to work with a pro to take advantage of it.