Month: September 2023

The dream of owning a home is a cherished one for many individuals and families across the United States. However, the soaring median existing-home price of around $400,000 can often make it seem like an unattainable goal, especially when faced with the prospect of a substantial down payment. Traditional mortgage loans typically require a 20 percent down payment, equating to a significant sum, but there is good news – down payment assistance (DPA) programs exist to help prospective homeowners bridge the financial gap. In this blog post, we will explore what DPA programs are, how they work, and the steps to access this valuable assistance. What is a Down Payment Assistance (DPA) Program? Down payment assistance programs are financial tools designed to provide aspiring homebuyers with the necessary funds to…

The news from the Federal Reserve this week is a pause on rate hikes and while the Fed does not set these rates outright, its monetary policies and decisions inevitably echo through the housing market. This relationship has been notably evident through the 11 rate hikes since early 2022, leading to the Fed's recent announcement of a pause in September. A Glimmer of Hope for the Housing Market Housing economists have found solace in this pause, with anticipations that the steep incline in mortgage rates may be nearing its terminus. Mike Fratantoni, the Chief Economist at the Mortgage Bankers Association, states, “We anticipate a continual decline in inflation, aligning it closer to the Fed’s target. Concurrently, the job market is projected to decelerate, reflecting expectations that the Fed’s 2024 movements…

What's a 10/1 ARM? An ARM is a mortgage with an interest rate that can adjust over time in response to changes in the market. The 10/1 ARM has a fixed interest rate for the first decade, followed by annual rate adjustments for the next 20 years. This makes it distinct from traditional fixed-rate mortgages which lock in one rate for the entirety of the loan term. The beauty of the 10/1 ARM lies in the balance it offers: the certainty of a fixed rate for a substantial period and the potential savings from rate adjustments thereafter. How the 10/1 ARM Rate Works: Essentially, the interest rate on a 10/1 ARM is determined by a combination of a fixed margin rate and a variable index rate. The index rate reflects…

Home ownership is part of the American dream and often thought of as a step towards financial stability. For parents, the thought of helping their child set foot on this path can be both appealing and daunting. Here's an in-depth look at why and how parents can provide that initial boost. Why Consider Gifting a Down Payment? In 2022, the National Association of Realtors revealed an intriguing statistic: 22% of first-time homebuyers were aided by gift funds from family or friends. This underscores the trend of families stepping in to aid the next generation in achieving their homeownership dreams. In today's environment, skyrocketing rents, expensive homes, and the looming shadow of student debt make saving for a down payment increasingly challenging for many young people. A down payment gift is…

As we've seen large storms hit both coasts recently, it's a good idea to use the old Boy Scout motto and "be prepared." We are going to review general steps to take to prepare for something we of course never happens. Natural disasters, from hurricanes to earthquakes, wield a devastating power that leaves homeowners and entire communities grappling with significant property damage and high repair costs. The Financial Impact of Natural Disasters on Homes In 2022, the Insurance Information Institute documented nearly $100 billion in insured losses stemming from natural disasters. Here's a breakdown of the data: Severe storms: These accounted for over $29 billion. Earthquakes: About $14.7 billion per year, as per a joint study between the USGS and FEMA. Floods: 15 instances in 2022 led to $3.3 billion…