Monthly Archives: March 2019

High Student Loan Debt Restricting First-Time Homebuyers

After years of paying rent, the dream of homeownership will not only start to become increasingly appealing but begin to actually seem approachable at a certain age. As income becomes more consistent, credit scores improve and a specific lifestyle becomes predominant, you may become ready for this step sooner than you originally thought. There is, however, one large issue which can prevent homeownership from becoming a reality for millions of people: high student debt.

When you’re overwhelmed with student debt, it may seem like homeownership is unattainable, but that is far from the truth. While high student loan debt will impact your mortgage approvals, there are dozens of ways to plan accordingly and improve your odds of getting approved for loans. With attentive planning, the right resources, and a deep breath, your dreams of homeownership will transform from fantasy to reality.

There is a reason that first-time homebuyers account for a smaller percentage of the housing market, and that reason is daunting student loan obligations. There are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt, and that’s only in the United States. According to personal finance website Make Lemonade, 2019 statistics show “The average student in the Class of 2017 has about $40,000 in student loan debt, compared with $37,172 in student loan debt for the Class of 2016.” This statistic has increased drastically from college seniors in 2009 who graduated with an average of $24,000 in student loan debt. Despite these steep numbers, millennials have still been the largest group of home buyers since 2013 at 36%, and 65% of these buyers were also first-time homebuyers.

“…your dreams of homeownership will transform from fantasy to reality.”

J.R. Duren, a personal finance expert, has one of these victory stories to share. With over $100,000 in debt, he and his wife were still able to purchase a home. Duren explains how an income-based replayment plan helped him pay off his combined loan burden. Another fellow victim to student loan debt, Dr. Goldie Winge, shares, “last year, I bought the house of my dreams despite having a medical school debt of over $120,000.” She was able to do so by keeping her credit excellent and having good financial reserves.

These numbers may seem alarming at first, but it’s the next step you take that determines whether your dream house will become your new home, or someone else’s. When applying for a mortgage, there are three central factors to focus on — your down payment, your credit score, and your debt-to-income ratio.

Bills to pay

The amount of money you’re able to put down on a home will directly determine which mortgages you are eligible for. It’s a universally known challenge to bulk up your savings when you’re busy picking away at your debt, especially hefty student debt. If the amount you’re able to use for a down payment is a bit shy of your goal, there are plenty of down-payment assistance programs to help you. Sonyma, State of NY Mortgage Agency, for example, offers a program called Achieving the Dream which provides low down payment mortgage financing for qualified low income first time homebuyers in New York on 1-4 family residences. The DC Housing Finance Agency, DCHFA, also has a similar program named DC Open Doors which offers competitive interest rates and lower mortgage insurance costs on first trust mortgages, as well as fully forgivable second trust loans, whether you’re buying your first or fifth home.

These competitive rates can result in a 0% down payment loan for homes in the District of Columbia. Randall Yates, founder and CEO of The Lenders Network recommends another great resource; the HUD website, in which you can browse homebuyer programs by state. Alternatively, there are federal loan programs such as an FHA loan, which is a friendly option even if you have student loans and could allow you to make a down payment as low as 3.5%. Be sure to take your time researching your array of options and you’ll be surprised at how much lower your down payment can be.

Coins

Your credit score is one of the first things financial institutions will take into account when deciding whether to approve your mortgage. You may be thinking uh oh…I haven’t checked my credit score in a while, or even wondering what is a credit score? Many are under the impression that if you have student loan debt, your credit score will suffer. This is fortunately not the case, and in fact, quite the contrary. Melinda Opperman, an expert with over 19 years of experience in the financial industry explains, “When managed properly, student loans can be advantageous in helping to build your credit history.” Using a variety of credit methods, such as credit cards, car payments, and even student loans, shows lenders that you are capable of handling different types of debt. As long as you’re not missing any payments, your credit score should stay rather stable. What you can do is focus on boosting your credit score. A few ways to do this are by simply paying your bills in full before or on the due date and managing your credit use, in other words try to use as little of your available credit as possible. Keep a close eye on your credit score in anticipation of the home buying process to ensure your score is optimized and up-to-date.

“When managed properly, student loans can be advantageous in helping to build your credit history.”

Lenders will also take a look at your DTI (debt-to-income) ratio, which shows the percentage of your monthly income required for debt repayment. Unfortunately, your student loan payments fall under your monthly debt umbrella. The good news is that you can successfully manage your DTI with some planning and strategy. As soon as you begin to repay your existing debt, whether it be a small amount or a large amount, your debt-to-income ratio will lower and you will potentially receive a better interest rate. If you’re having trouble making your monthly payments, consider refinancing your student loans. This will lower your interest rate and demonstrate to lenders that you’re well on your way to pay off your discouraging debt.

Many dive into the house hunting process prior to getting a mortgage, and then become disappointed when they aren’t approved by a lender and miss out on the perfect home. By getting pre-approved, you will know exactly how much you can afford and avoid setbacks. Getting pre-approved for a mortgage involves a lender evaluating your financial history and then putting together a letter illustrating how much of a loan you can qualify for. This shows your seriousness and motivation as a buyer, which bumps you ahead of other interested parties without this advantage. There are dozens of costs, some hidden, when it comes to purchasing a home and getting pre-approved from a lender will assist you in preparing for the cost requirements.

The American dream of homeownership isn’t impossible. It’s actually quite attainable with the right knowledge and careful planning. Don’t allow your student debt to slow you down and keep you from your lifelong aspiration of having a home to call your own.

Vote in our Poll: The High Price of Housing

Are you feeling the squeeze from higher costs of living? Vote in our poll and see how you compare to other readers.

Recent data show that 23 percent of homeowners and 47 percent of renters are considered “cost-burdened,” meaning they paid more than 30 percent of their income for housing, according to the 2018 State of the Nation’s Housing report produced by the Joint Center for Housing Studies (JCHS) at Harvard University.

Do you pay more than 30 percent of your income for housing/rent each month?

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“Cost burdens are their highest in some high-cost areas like Miami and LA, but they’re everywhere. There are very few places with low cost burdens.”

Read the full story: The State of Housing Supply and Demand.

Housing Market Sizzles in Valley of the Sun

People have different reasons for wanting to buy a home in a certain city or town, or even as specific as a community or a neighborhood.

Maybe they want to live close to where they work, so they can have a short commute. Maybe they want to live nearby family and friends. Maybe it has to do with schools for their kids or for those without children, maybe the attraction of entertainment and lifestyle plays a part.

Or maybe folks just want to find somewhere affordable.

Whatever the reason, finding the right place to live is important for a would-be homeowner, but it’s also not the easiest task.

Home prices and mortgage rates are expected to rise this year and the available housing supply within a buyer’s parameters may shrink.

But some markets are better than others. Realtor.com recently released their hottest markets list for 2019.

Phoenix ranked No. 5 on the list and was the largest U.S. city to rank in the Top 10. Lakeland, Fla. topped the list.

“Millennials are attracted to the city for it’s thriving job market, where some forecasters are saying its employment growth is double the national average.”

Economists for the website continuously track home prices, availability and how quickly homes will sell. To make this list, they combine that data with markets that are hotbeds for job growth, are experiencing an influx of new construction and are flush with millennials – the generation making up a majority of buyers in the U.S.

Phoenix has a little bit of something for everybody, which is why it’s the fourth largest city in the country based on population.

Millennials are attracted to the city for it’s thriving job market, where some forecasters are saying its employment growth is double the national average. They are likely drawn to a thriving nightlife as well with an eclectic assortment of bars and restaurants.

But Phoenix appeals to older generations as well, especially retirees, because it is a hub for high-end golf courses – many of which are designed by legendary golfer Jack Nicklaus – as well as a series of luxury spa resorts.

With such a high quality of life, and constant sunshine and warm weather, it’s no wonder Phoenix is a thriving real estate market, but it’s not just for retirees and millennials.

Families also find comfort in Phoenix’s communities and neighborhoods, mostly because of the quality of their schools. Phoenix has 29 schools that received a grade of 8/10 or better at greatschools.org.

Unlike other cities on this Top 10 list, the median price for a home in Phoenix is above the national average by approximately $7,000, but considering all of the other benefits of living in the area, it’s no wonder people are willing to pay a little bit extra to get into a Phoenix home.

Rounding out the Top 10 list of housing markets in 2019 are Grand Rapids, Mich. (No.2), El Paso, Texas (No. 3), Chatanooga, Tenn. (No. 4), Bridgeport, Conn. (No. 6), Las Vegas, Nev. (No. 7), Boise, Idaho (No. 8), Miami, Fla. (No. 9) and Boston, Mass. (No. 10).

 

 

Autistic Home Buyers Are An Emerging Force In Today’s Market

Whenever there has been a shift in the demographics of our population, new housing needs have emerged. The example most of us are familiar with is when the return of soldiers from WWII created a demand for housing to accommodate their newly growing families. Today, a new, and often overlooked, demographic is poised to influence the way we build, customize and market our homes.

There are currently 1.5 million individuals that have been diagnosed with autism spectrum disorders (or ASDs) in the United States, 80% of them under the age of 22.  OPENING DOORS: A Discussion Of Residential Options For Adults Living With Autism And Related Disorders from the Southwest Autism Research & Resource Center (SARRC) shares that this is a rising trend as well. “In the 1980s, the incidence of autism was 1 in 10,000 children. Throughout the 1990s, the rate steadily climbed and reached 1 in 500.”

Because autism is a heterogenous diagnosis it’s hard to pinpoint what percentage of autistic children and adolescents will seek out independent living and homeownership when they become adults. However, the Autistic Housing Network can tell us that there are presently 496,000 autistic adults that do not live at home with their family. Given the consistently rising population, it’s safe to say that the demand for homes that will appeal to the unique needs of autistic adults is growing.

The Autism Housing Network article, “Designing Living Spaces for Autism on a Budget” cautions that there is no “one-size-fits-all approach” to creating or purchasing a space for people on the autism spectrum. Yet, there are some requirements that REALTORS® and designers working with autistic clients have found to be increasingly common.

  1. Clearly defined living spaces that have seperate rooms for separate functions. A home with one area for sleep, another for recreation, and so on is often requested. Open floor plans or studio type dwellings don’t offer the division of purpose that many autistic adults require in order to create a consistent living routine.
  2. A space that supports their specific interests and hobbies. Reddit user and autistic homeowner Jimmyhand90 shared that he “bought on floor plan and suitability for needs.” It was important to him that the garden was large enough, and “shaped right to build an enclosure for my cats.”
  3. A predictable layout. The SAARC report found that eclectic home layouts don’t provide the “spatial sequencing, smooth transitions between rooms and uses, and the potential to establish routines” that help autistic homeowners minimize stress.

The increasing need for autistic friendly homes is generating some creative housing solutions as well. The Madison House Autism Foundation is encouraging prospective, autistic home buyers to look into the tiny home trend. They believe the adaptivity and low cost of these structures make them a great choice.

A group of families in North Texas purchased 29 acres of land in 2015 in order to build a housing development exclusively for adults with ASD. The homes and surrounding property were built specifically to support the safety, independance and needs of ASD adults. The housing development will be fully open in the spring of 2020 and will cater to needs across the spectrum.

One of the services 29 Acres will provide is access to their Transition Academy, a 2 year program that teaches residents to feel confident during daily activities like paying bills, grocery shopping and home care – providing ASD adults with a stepping stone towards independent homeownership.

It’s Time To Get That Home Inventory Completed

Waking up to discover your finished basement is knee-high with water or returning home to find that a thunderstorm “installed” a new window in your living room is every homeowner’s fear. But we purchase home insurance, and those of us in towns with less than reliable water infrastructures add “sewer backup insurance”, and we carry on hoping that’s enough.

Still, even with good coverage, the disruption and stress that home damage brings is significant. This is especially true for homeowners who have had to put their home back together after a natural disaster – when the damage and loss of personal possessions can be devastating.

Jack Buoscio, owner of a State Farm agency in Palos Heights, IL urges his clients to take the time to inventory their possessions proactively. “Making a list of your possessions, and their worth before you have to contend with cleanup, gives you an extra piece of mind. And honestly, it doesn’t have to be an overwhelming task if you tackle it efficiently.”

1. Find out exactly what you need to inventory.

A quick call to your insurance agent before you start taking stock of your home can save you quite a bit of work. He or she can tell you what kind of items you should be documenting and which ones are worth taking time to photograph and obtain serial numbers for.

2. Channel your inner Marie Kondo.

The KonMari Method of organization encourages people to take stock of their possessions, letting go of the items that don’t bring purpose or personal joy. The book, The Magic of Tidying Up and Netflix show, Tidying up with Marie Kondo has homeowners around the world upending drawers and emptying closets.

Merging this popular, personal organization method with your initiative to take a thorough home inventory is a great way to gain both serenity and security.

3. Automate the process.

Most insurance agencies have downloadable checklists or apps that can save you quite a bit of time. In Laura Daily’s Washington Post article, “Don’t wait for a disaster to take inventory of your belongings” she asks certified organizer Susan Kousek which independent home inventory apps she recommends as well. Kousek advises clients to look for apps that “allow you to list each item and attach a photo and supporting documentation such as receipts”. Her top picks include; HomeZada, Sortly, Memento Database and Nest Egg.

4. Make your own documentary.

Ideally, you’re working towards an inventoried list that includes pictures, receipts and serial codes. But a great “in time meantime” or “please, do I look like have that kind of time?” solution is to create a video inventory.

Daily suggests that you, “Stand in the center of a room and narrate as you record. Film the entire space, including every wall, the ceiling and floor. Describe every item and feature, such as hardwood flooring or that pricey light fixture, to the best of your ability. Some detail is better than nothing.”

Your home inventory should be an ongoing task on your todo list. When you upgrade appliances, or purchase new home furnishings it’s important to add those to your list. Keeping that list safe is key as well. Home inventory apps have the advantage of putting your hard work into the cloud, but if you are opting to use a personal spreadsheet be sure to give a relative or friend a flash drive copy.

Millennials Taking Over Boston, Making it a Hot Housing Market

People have different reasons for wanting to buy a home in a certain city or town, or even as specific as a community or a neighborhood.

Maybe they want to live close to where they work, so they can have a short commute. Maybe they want to live nearby family and friends. Maybe it has to do with schools for their kids or for those without children, maybe the attraction of entertainment and lifestyle plays a part.

Or maybe folks just want to find somewhere affordable.

Whatever the reason, finding the right place to live is important for a would-be homeowner, but it’s also not the easiest task.

Home prices and mortgage rates are expected to rise this year and the available housing supply within a buyer’s parameters may shrink.

But some markets are better than others. Realtor.com recently released their hottest markets list for 2019.

Boston, despite its high home prices, is still trending and ranks No. 10 on the 2019 list.

“Millennials are expected to take over 40 percent of all of Boston’s mortgages in 2019.”

Economists for the website continuously track home prices, availability and how quickly homes will sell. To make this list, they combine that data with markets that are hotbeds for job growth, are experiencing an influx of new construction and are flush with millennials – the generation making up a majority of buyers in the U.S.

Millennials who want to establish themselves in the Northeast corridor of the country are landing in Boston in droves.

According to data from the National Association of REALTORS®, millennials are expected to take over 40 percent of all of Boston’s mortgages in 2019.

While that percentage may be surprising, what shouldn’t be is that Boston is an attractive location for younger homebuyers.

Boston has one of the most walkable downtown areas in the U.S. replete with historical locations – Boston Common, Faneuil Hall, Beacon Hill and the Freedom Trail are among the popular locations to find people on a daily basis.

Not to mention, Boston is easily the most intellectually rich town in the country, boasting many top colleges. Whether it’s Boston College, Boston University, Harvard, or the Massachusetts Institution of Technology, academia abounds.

There are few cities that can rival the passion that exists for Boston sports, as it is one of only six cities in the country that has a team in each of the four major professional sports that play within its city limits.

Entertainment venues abound in Boston with a variety of live music and a thriving theatre district and when it comes to dining, it’s hard to top the city’s North End for a high-end meal.

All of this and more is why millennials are willing to invest in homes with a forecasted median price of $496,710.

Rounding out the Top 10 list of housing markets in 2019 are Lakeland, Fla. (No. 1) Grand Rapids, Mich. (No.2), El Paso, Texas (No. 3), Chatanooga, Tenn. (No. 4), Phoenix, Ariz. (No. 5), Bridgeport, Conn. (No. 6), Las Vegas, Nev. (No. 7), Boise, Idaho (No.8) and Miami, Fla. (No. 9).

 

 

Like Finding Gold in Treasure Valley, Boise Housing Market Booming

People have different reasons for wanting to buy a home in a certain city or town, or even as specific as a community or a neighborhood.

Maybe they want to live close to where they work, so they can have a short commute. Maybe they want to live nearby family and friends. Maybe it has to do with schools for their kids or for those without children, maybe the attraction of entertainment and lifestyle plays a part.

Or maybe folks just want to find somewhere affordable.

Whatever the reason, finding the right place to live is important for a would-be homeowner, but it’s also not the easiest task.

Home prices and mortgage rates are expected to rise this year and the available housing supply within a buyer’s parameters may shrink.

But some markets are better than others. Realtor.com recently released their hottest markets list for 2019.

Boise came in at No. 8 on the Top 10 list, giving credence to Idaho being known as the Gem State, because it is a hidden gem among housing markets in the U.S.

“Boise is teeming with employment opportunities and its historic homes on tree-lined streets appeal to established families as well as millennials and young couples who are just starting out.”

Economists for the website continuously track home prices, availability and how quickly homes will sell. To make this list, they combine that data with markets that are hotbeds for job growth, are experiencing an influx of new construction and are flush with millennials – the generation making up a majority of buyers in the U.S.

Tucked between mountains in the Treasure Valley, Boise has a little bit of everything to offer. It has a vibrant food scene and close proximity to the mountains for those who love the outdoors. Recreation abounds and its four-season climate can have you both fishing and skiing in the same calendar year without leaving home.

Already flush with an existing wine scene, the resurgence of craft brewing has resulted in an influx of local breweries and cider houses in the city.

There is a Basque Block in Boise, which has the largest population of Basque people per capita outside of Spain. Not only is there a Basque History Museum, but the local market serves up paella daily as well as a variety of pintxos.

Boise is also rated as one of the most bike-friendly cities in the U.S., and has a variety of bike paths, including a scenic ride along the Boise River.

And, it is a haven for festivals. Whether it’s the Treefort Music Festival in the Spring, the Boise X Games in the Summer, or the Spirit of Boise Balloon Fest in the Fall, there’s always something happening.

Outside of the quality of life, Boise is teeming with employment opportunities and its historic homes on tree-lined streets appeal to established families as well as millennials and young couples who are just starting out.

The median home value in Boise is $258,303, which is slightly below the national average, making it an affordable place to live as well.

Rounding out the Top 10 list of housing markets in 2019 are Lakeland, Fla. (No. 1) Grand Rapids, Mich. (No.2), El Paso, Texas (No. 3), Chatanooga, Tenn. (No. 4), Phoenix, Ariz. (No. 5), Bridgeport, Conn. (No. 6), Las Vegas, Nev. (No. 7), Miami, Fla. (No. 9) and Boston, Mass. (No. 10).

Going All-In on Buying a Home in Vegas is Proving to be a Good Bet

People have different reasons for wanting to buy a home in a certain city or town, or even as specific as a community or a neighborhood.

Maybe they want to live close to where they work, so they can have a short commute. Maybe they want to live nearby family and friends. Maybe it has to do with schools for their kids or for those without children, maybe the attraction of entertainment and lifestyle plays a part.

Or maybe folks just want to find somewhere affordable.

Whatever the reason, finding the right place to live is important for a would-be homeowner, but it’s also not the easiest task.

Home prices and mortgage rates are expected to rise this year and the available housing supply within a buyer’s parameters may shrink.

But some markets are better than others. Realtor.com recently released their hottest markets list for 2019.

Las Vegas ranked No. 7 on the Top 10 list, suggesting that maybe Sin City should modify its well-known catch phrase to, “Whatever happens in Vegas, stays in Vegas… and you should too!”

“This is the second straight year Las Vegas has been in the Top 10, following up 2018 when it was considered the No. 1 hottest housing market.”

Economists for the website continuously track home prices, availability and how quickly homes will sell. To make this list, they combine that data with markets that are hotbeds for job growth, are experiencing an influx of new construction and are flush with millennials – the generation making up a majority of buyers in the U.S.

Las Vegas has it all. A desert metropolis, it has the feel of a big city with unparalleled dining, shopping and entertainment options, but also offers a bevy of outdoor opportunities as well, away from the bright lights of the Strip.

Las Vegas is world renowned for its hiking trails and accessibility to the Red Rocks, and it also boasts top tier golfing opportunities as well as other great parks and recreation.

And while homes in Las Vegas are higher than the National average (by about $17,000), wages are higher there and there is the added bonus of no state income tax in Nevada. That combination actually makes the cost of living in Las Vegas extremely affordable.

This is the second straight year Las Vegas has been in the Top 10, following up 2018 when it was considered the No. 1 hottest housing market. Being on the list for consecutive years proves the sustainability of the market in Vegas and also the continued attraction to make what was once a city only for tourists a great place to have a permanent home.

Rounding out the Top 10 list of housing markets in 2019 are Lakeland, Fla. (No. 1) Grand Rapids, Mich. (No.2), El Paso, Texas (No. 3), Chatanooga, Tenn. (No. 4), Phoenix, Ariz. (No. 5), Bridgeport, Conn. (No. 6), Boise, Idaho (No. 8), Miami, Fla. (No. 9) and Boston, Mass. (No. 10).

Bridgeport a Hot Place to Live for Those Trying to “Make it There”

People have different reasons for wanting to buy a home in a certain city or town, or even as specific as a community or a neighborhood.

Maybe they want to live close to where they work, so they can have a short commute. Maybe they want to live nearby family and friends. Maybe it has to do with schools for their kids or for those without children, maybe the attraction of entertainment and lifestyle plays a part.

Or maybe folks just want to find somewhere affordable.

Whatever the reason, finding the right place to live is important for a would-be homeowner, but it’s also not the easiest task.

Home prices and mortgage rates are expected to rise this year and the available housing supply within a buyer’s parameters may shrink.

But some markets are better than others. Realtor.com recently released their hottest markets list for 2019.

Bridgeport, Conn., a city attracting a lot of folks working in New York, ranks No. 6 on the Top 10 list. Lakeland, Fla. came in at No. 1.

“Located on the mouth of the Pequonnock River, Bridgeport offers a quieter community for established professionals and families away from the hectic nature of city life.”

Economists for the website continuously track home prices, availability and how quickly homes will sell. To make this list, they combine that data with markets that are hotbeds for job growth, are experiencing an influx of new construction and are flush with millennials – the generation making up a majority of buyers in the U.S.

Lyrics in the famous song “New York, New York” say that if you can make it there, you can make it anywhere. That’s certainly true for a lot of people who are trying to work in New York, where wages are certainly higher than most areas of the country.

But, the problem with New York, from a housing perspective, is that it’s too congested and it’s not conducive to a more family-oriented lifestyle.

Which is why many people look outside of the five boroughs to find a place to live while working in the big city.

Nestled just 50 miles north of New York and a convenient train ride away for those working in the City, is Bridgeport. Located on the mouth of the Pequonnock River, Bridgeport offers a quieter community for established professionals and families away from the hectic nature of city life.

There are more than 1,300 acres of parks across the 16 square miles of land in the city. There’s a majestic shoreline, fascinating museums, festivals, national music acts and minor league baseball and hockey to keep everyone entertained.

Rounding out the Top 10 list of housing markets in 2019 are Grand Rapids, Mich. (No.2), El Paso, Texas (No. 3), Chatanooga, Tenn. (No. 4), Phoenix, Ariz. (No. 5), Las Vegas, Nev. (No. 7), Boise, Idaho (No. 8), Miami, Fla. (No. 9) and Boston, Mass. (No. 10).