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Part 2 of Our Two-Part Series:
In our April 3rd post, we gave you 5 ways to save for your home purchase down payment. Here are The Milestone Team’s second five tips to get you on the road to home ownership and your own special place in the world:
6. Make your savings work for you. Invest your down payment nest egg in a high-interest money-market or savings account. Avoid riskier investment (like stocks or crypto) so your principle is safe.
7. Start a side-hustle. Forbes recommends turning hobbies and passions into a side-business to earn additional income. You can also take a part-time job or…
8. Ask for a raise at work. The sooner you ask, the sooner you can save more for your new home.
9. Talk to a mortgage lender. Knowledge is power. Your local lender can offer steps and ideas so you can afford your dream home sooner. And…
10. Talk to your local real estate expert. Sure, you’re not buying your home today. However, you do not need to wait until you are shopping to engage your real estate agent. The Milestone Team members are experts and have the experience to help you save and shop wisely!
Don't forget for more expert advice to:
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Part 1 of Our Two-Part Series:
According to the National Association of Realtors, the most difficult step for buyers is saving for a down payment.
20% down is the market standard- although you may qualify for as little as 3.5% (FHA). It’s still a daunting challenge for many buyers to save even that 3.5% for a $300,000 purchase - which would amount to $10,500.
So, what do you do?
Here are The Milestone Team’s first five tips to get you on the road to home ownership and your own special place in the world:
- Create a vision board. Using a corkboard – or even your refrigerator! – display images of beautiful living spaces, décor you love, gardens you would want. The inspiration helps you prioritize saving for your special place versus spending impulsively.
- Get on a budget.Review and reduce your spending to maximize your monthly savings. Some ideas:
- Choose a “staycation:” Vacations can cost $2000 or more for a typical family. Check out local events, places to explore & stay, and put that extra cash towards your downpayment!
- Try a no-spend challenge. Each month, only spend on necessities and a few dollars for fun-money.
- Pay yourself first. Financial experts recommend “paying” yourself by setting aside 20% from each paycheck. Automate your savings by setting up an automatic transferwith your bank.
- Pay off debt. This seems counter-intuitive – “Shouldn’t I be saving every dollar towards my downpayment?” Every dollar that’s not costing you, yes. Paying off high-interest credit cards and auto loans not only saves you on interest each month, but also reduces your debt-to-income ratio and increases your credit score – which will help you qualify for your mortgage.
- Bank your next raise or tax refund. Yes, you really want that new flat screen television – but making the temporary sacrifice adds those extra funds to your down payment account!
Want more expert advice to save for your dream home? See our Part 2 later this month!
Top 5 Loan Killers
If you plan on getting a mortgage or have already started the loan process, you need to be extra cautious with your finances. Here are the top 5 show stoppers you should avoid.
- Purchasing large ticket items. Don’t buy a new car or even furniture until after the loan closes. New payments will impact how much money you can borrow or can even prevent you from qualifying for a loan.
- Paying late on bills. One 30-day late payment can subtract 80 to 110 points from your credit score. Many lenders require at least 12 consecutive months of on-time payments
- Shuffling money around. Lenders scrutinize all your bank statements as part of the approval process. Any unusual deposits or withdrawals will require clear documentation of what they are. A large sum of money transferred into an account right before closing could be lethal.
- Job changes. Taking on a new job can present some hurdles as lenders like stable income that will likely continue. Changing job fields or starting your own business will be a red flag.
- Getting a new credit card. Even something as simple as getting a Kohl’s credit card will impact your credit score.
Give me a call if you want to work with a Realtor who can help you avoid the common pitfalls when buying your dream home.
Contact Donna Forest: 603-526-4116; www.DonnaForest.com; Donna@DonnaForest.com
You’ll be moving in the right direction with Better Homes & Gardens Real Estate - The Milestone Team
Is Now a Good Time to Buy?
Despite headlines about high interest rates, a recession, and some even saying there is a housing bubble, the reality is that it’s still a good time to buy a home. And below are the reasons why!
- The number of homes for sale are increasing. Danielle Hale, Chief Economist for realtor.com, said new listings were up 6% above one year ago.
- Buyer demand has moderated with the higher interest rates, which means buyers should face lower competition at a less frenzied pace.
- Experts are forecasting homes to continue to appreciate in price. None are saying prices will fall. The home price forecast for 2022 averages out to an increase of 8.5%. After 2022, the home prices are expected to increase 3-4% each year.
- Rents are rising faster than they have in years due to the high demand. Buyers with a mortgage can at least know the majority of their monthly housing costs will remain fixed going forward.
- Interest rates over the last few years were artificially low as the Feds tried to boost economic activity. The latest rates are still comparatively low when looking at them historically since 1971. An average 30-year, fixed mortgage rate of around 6% is still well below the historical average of nearly 8 percent.
There is no perfect advice as to when to buy a house. However, don’t base your actions on what you read in the headlines as waiting could cost you. It’s a personal decision based on your finances and goals. Contact me for expert guidance on buying your dream home.
Donna Forest ~ donna@donnaforest.com ~ 603-731-5151
Real estate markets are local, and we have the real scoop on ours.
Tips for Buyers in a Competitive Market
Given I haven’t seen a whole lot of homes come up for sale these days, it goes without saying buyers are still facing a very competitive market when trying to purchase a house. Below are some tips to increase your chances of getting that dream home.
- Move quickly when something new pops on; homes tend to sell within the first few days of being on the market.
- Offers need to be submitted with proof of funds or a lender letter. Get pre-qualified with a local lender or better yet, get pre-approved. Pre-approval means you submitted verification of your finances and had a credit check.
- You typically only get one shot to compete so put in your highest and best offer up front.
- Find out the ideal closing date for the sellers and use in your offer. Flexible dates can make your offer more attractive.
- Have inspections for informational purposes only or waive a certain amount of dollar repairs so sellers know you will not be re-negotiating the price.
- If possible, guarantee you will purchase even if the home’s appraisal is less than the contract price by stating you will pay the difference between the two.
Addressing price, time, convenience and certainty can position you for success in this competitive market. Contact me to put my 28 years of experience to work for you.
Contact Donna Forest: 603-526-4116
You’ll be moving in the right direction with Better Homes & Gardens Real Estate - The Milestone Team
5 Reasons to Use a Buyer’s Agent
Recently a friend asked me to give them some advice for their son who is trying to buy a home in Utah. It’s an extremely competitive market there. My first question was does he have a buyer’s agent and if no, why not?! If you are trying to buy a house, it only makes sense to use an experienced professional to guide you through the process. Here are only a few of the reasons why buyers should use a buyers’ agent.
- A buyer’s agent works in your best interest. The listing agent works on behalf of the sellers and not for you.
- An experienced buyer’s agent will advise on how to structure a competitive offer to help better position you as the winning bid in a multiple offer situation.
- Buyers will need inspectors, lenders, closing companies, etc. Good agents will provide a recommended list of top performing providers.
- You get local knowledge and insight into the market area.
- A buyer’s agent will help overcome setbacks and provide advice on how to proceed and negotiate.
When you hire a buyer’s agent, you’re hiring a professional to look out for your best interests during one of the largest purchases you’ll ever make. Contact me to put my 27 years of experience to work for you.
Contact Donna Forest: 603-526-4116; www.DonnaForest.com; Donna@DonnaForest.com
Teamwork from the Team that works –Better Homes & Gardens Real Estate - The Milestone Team
Every buyer wants to purchase at a great price and a low mortgage rate as that determines the monthly cost. Here’s how today’s buyers are being impacted:
Price – Based on a home price expectation survey released by Pulsenomics on June 10, more than 100 forecasters predict an 8.7% annual gain in home values for 2021. This rate is expected to slow to approx. 5% in 2022 and about 2.5% for the following year. In other words, if you are waiting for prices to go down, it could be a while.
Mortgage Rates – The average fixed 30 yr. rate is near 3% right now. The Mortgage Bankers Assoc. expects the 30-year fixed rate to reach 3.6% by the end of 2021. Greg McBride, chief financial analyst at Bankrate states “the tug of war over whether mortgage rates will move higher or lower from here largely revolves around inflation.” The latest Quarterly Forecast from Freddie Mac predicts the average 30-year fixed-rate mortgage to be 3.1% in 2021 and 3.7% in 2022.
Increases in prices and rates impact you; your housing expense will be more a year from now if you need a mortgage to purchase your home. My advice is to buy now - it could lead to substantial savings as even a small change in interest rates can have a big impact. Contact me if you would like expert advice on buying in today’s challenging market.
Donna Forest ~ donna@donnaforest.com ~ 603-731-5151
You’ll be moving in the right direction with Better Homes & Gardens Real Estate - The Milestone Team.
With the sizzle of summer, it’s easy to think of owning (or at least renting!) a vacation home this year. In fact, recreational home buyers came out full force in the 2nd half of 2020 thru April 2021 in search of that lakefront home or cabin in the woods. The National Assoc. of Realtors (NAR) just released The Vacation Home Counties 2021 Report analyzing how the pandemic impacted this demand and not surprisingly, vacation home sales jumped 57% year-over-year during Jan-April 2021. “Vacation homes are a hot commodity at the moment,” says Lawrence Yun, NAR’s chief economist. “With many businesses and employers still extending an option to work remotely to workers, vacation housing, and second homes will remain a popular choice among buyers.” We saw it in our area this spring with bidding wars on the smaller ponds like Chalk Pond resulting in prices over $600,000. While our market seems to have settled down from the earlier months of frenzied buying, the second home market is expected to remain strong given the low supply and high demand. Thinking of buying or selling that second home? Contact me and put my 21 years of local expertise to work for you.
Donna Forest ~ donna@donnaforest.com ~ 613-731-5151
Buying your first home can feel like both the best of times and the worst of times. Here are 10 facts nobody tells you when you’re buying your first home.
1. Something will go wrong
No move is ever perfect. Something will get broken or there will be something you’ve forgotten to bring or do. With any luck, the setback will be minor, and you can chalk it up to the old adage, “things happen.”
2. Some of your conditions might not be met
One of the least enforceable clauses in offers to purchase is one for cleaning requests. You can stipulate that carpets, refrigerators and ovens be cleaned. However, if they haven’t been, there is often very little that you can do about it.
If a major repair hasn’t been completed as promised, one of two things will happen: you either won’t take possession of the property on the day you planned or your funds will have to be placed in escrow pending resolution of the issue.
3. If you don’t have the closing fees, you don’t get your new home
Legal fees are due on closing, and your funds won’t be released to the seller unless your lawyer is paid. Closing costs usually range from two to five percent of the purchase price, but be sure to verify this information before arriving on closing day. This money is in addition to your down payment.
4. Good schools increase a home’s value
You’ll pay more for a house in a good school district. Of course, the good news is you’ll get more for it when you decide to sell. If the home you’re planning to buy is your “forever” home and you don’t have, or plan to have children, this may not matter. Still, it’s something to think about.
5. Your neighborhood may be about to change drastically
The municipality may be planning a park, a school, or a playground for your area. Depending on your lifestyle, that can mean profound changes in a short period of time. Check with local administration and the area’s local representative. The first can tell you what the plan is. The latter will have a far better grasp of whether outlined timelines are accurate or not. You can base your decision on the information they provide.
6. You need to read all the documents yourself
It’s tempting when you’re paying a lawyer to review HOA or condo documents to simply delegate this task. However, a close reading of the minutes of meetings will teach you a lot about your neighbors-to-be and help you avoid nasty surprises, like planned increases in fees or devolving renovations that used to be the condo board, or HOA’s responsibility to individual owners.
7. Don’t apply for other credit while mortgage shopping
Applying for a loan or another credit card may seem like a good idea when you’re about to take the home ownership plunge and know you’re going to need to buy things like garden tools, a gazebo, and a grill. Don’t do it unless absolutely necessary. It can negatively affect not only the amount of your pre-approved mortgage, but it can also mean you don’t get pre-approval. Wait until after you’ve bought your home to apply for more credit.
8. You’re going to need “earnest” money
Also known as a deposit, you’ll likely need about $1000 per $100,000 worth of house available when you make an offer. This money is required as a show of good faith and will be held in escrow. You’ll get it back if your offer isn’t accepted, or it may be applied to your down payment. You may forfeit this money, though, if you’re the one who withdraws from the deal.
9. Your neighbors-to-be may be your best source of information
Walk around the area you where you want to live. If you see people out gardening or mowing their lawns, talk to them. Strike up a conversation and explain that you’re thinking of buying. Ask receptive individuals what the neighborhood is like, how long they’ve lived there, and how long they’re planning to stay. If you learn that your new home is located next door to some party animals who blast music every single summer evening, you may not enjoy your own backyard, so you may want to reconsider.
10. Check for rebates you may be entitled to
You may qualify for first-time homeowner rebates. There may be other municipal, state, or utility-provider rebates available, too. Start investigating early. It may make more sense to invest in attic insulation than an air conditioner if you’re going to get a rebate that covers some or all the cost of the insulation. Some areas offer rebates on newer, more energy-efficient appliances. You won’t know that unless you do your homework.
A good real estate agent can talk you through the buying process. Now you’re already ahead of the game with these ten facts nobody tells you, and you’ll be able to focus on offer strategy rather than the fundamentals.
January’s market report for NH just hit my inbox and there was no surprise it was highlighting the lack of homes for sale. This has pushed prices up 23% in January compared to the same month last year. Right now, homes are on the market for less than a month. I’m sure many buyers are wondering if it is a good time to buy or if they should just wait. You may think increasing values means homes are less affordable today. While there are many factors that go into affordability, it boils down to the fact it is not just about the price of the home but the overall cost in the long run. Historically low interest rates stretch your spending power and mean you can save significantly over the life of a loan. Additionally, many experts say it is more affordable to own a home than rent. The cost of renting has been relatively high compared to the cost of owning. Here is a startling statistic - the net worth of a homeowner is 40x greater than that of a renter. While the market is a bit challenging at the moment, the expectation is to see more houses hit the market this spring. Contact me if you’d like to know how to best position yourself to build wealth and become a homeowner this year.
Donna Forest, donna@donnaforest.com, 603-731-5151 (c), 603-526-4116 (o)