To finance a home with a VA loan, a property must pass the VA’s set of Minimum Property Requirements. The VA sets these standards to ensure that veterans are purchasing high-quality, move-in ready homes. Find out what to look for to ensure homes you’re interested in buying will meet the requirements. And if you’re trying to sell your home, find out some quick fixes that will increase your curb appeal and your sale price.
Every potential home buyer has to stop for at least a moment and consider this question. Today, we want to look at one of the many financial reasons to buy instead of rent: the housing expense moving forward.
According to the latest Existing Home Sales Report from the National Association of Realtors, the median sales price of a home in the U.S. is $184,300. The mortgage payment (principal & interest) on that purchase would be $661.89 assuming a 20% down payment and a 3.5% mortgage interest rate. Currently, the median asking rent in the U.S. according to the Census Bureau is $717 a month.
We realize that the two payments do not necessarily reflect the housing cost on a similar residence. However, that is not the point of the post. All we are saying is that the monthly housing expense on a median price home is $661.89 and the median rent is $717. We now want to discuss what will happen to these costs over time.
The principal and interest portion of the mortgage payment is locked in for the next 30 years. We know real estate taxes may be included in the payment and will increase to some degree over that time. We also acknowledge that the homeowner will have occasion to spend money on repairs. They also receive many tax advantages as a homeowner.
However, the actual monthly housing expense remains the same for the next 30 years.
Now, let’s look at what happens to a rent payment. The best thing to do to predict the future is to study the past. Here is a graph of the median asking rent since 1988 based on Census Bureau data:
We believe rents will follow their historically pattern and increase dramatically over the next 30 years. Buyers have a choice: either lock in your housing expense or deal with the uncertainty of rental increases.
Housing has a way to go in the recovery.
With the current reading, house prices are now just back to Autumn 2003 levels.
The Home Affordable Refinance Program (HARP) underwent some significant changes in 2012, evolving into HARP 2.0 and spurring a surge in refinances under the government-run program. Based on the Federal Housing Finance Agency’s (FHFA) 2012 report, HARP volume represented 22 percent of the total refinance volume in the fourth quarter. Additionally, 1,074,755 refinances were completed through HARP in 2012, bringing the total number of HARP refinances to over 2.1 million since the program’s inception.
So what specific changes attributed to the growth in HARP refinances? HARP 2.0 gives better access to borrowers who are at risk of losing their homes, particularly those who are severely underwater, reports Ilyce Glink of CBS MoneyWatch. Meg Burns, senior associate director for housing and regulatory policy for the FHFA, wrote in an email that “removing the 125 percent loan-to-value ceiling, waiving certain representations and warranties for lenders, eliminating the need for a new property appraisal and eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages has proven successful.”
According to CBS MoneyWatch, HARP 2.0 appeals to more lenders in part because the program does not hold the new originator responsible for anything that occurred with the first loan. “The limited success of HARP 1.0 can be attributed to a lack of lenders that embraced the program,” said Spencer Llewellyn, executive director of Loans 101, a company that provides data to the public about the mortgage industry.
As a result of the revamp, the market has seen a 600 percent annual increase in the number of underwater homeowners who received HARP loans.To find out what HARP 2.0 can do for you, check outwww.makinghomeaffordable.gov.
It’s true that buying your first home can seem like an overwhelming process, but you can help make your journey from house hunter to homeowner a little easier by having the proper documents in order. Take a walk through this first time home buyer flowchart that can help answer questions about the kind of documents you need to have prepared before you apply for a mortgage.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 1.5 percent in March, over a downwardly revised figure in February. The index is 7 percent above year-ago numbers, reflecting the fact that pending sales have been above year-ago levels for the past 23 months.
“Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses,” says Lawrence Yun, NAR chief economist. “Job additions and rising household wealth will continue to support housing demand.”
In the Northeast, the index was unchanged in March, but is 6.3 percent higher than in March 2012. In the Midwest the index increased 0.3 percent, 13.7 percent above a year ago. Pending home sales in the South rose 2.7 percent, which is 10.4 percent higher than March 2012. In the West the index increased 1.5 percent, but is 4.3 percent below a year ago.
I often hear from young adults today that they are finding it difficult to establish themselves in the housing market. Owning your own home is a central part of the American dream, and a pretty important milestone in any person’s life, so it’s bad news if young people today are having a tougher go at it than we did. But are they really?
I decided to dig up the statistics all the way back to 1979 to find out how affordable a home has been for the average American over that time period, based on median home price, median family income, interest rates, debt levels, and more. The results were both surprising and complicated, so I decided to present them in infographic form to make it easier for my readers to make sense of all the data I looked at.
Whether you’re a young professional eager to buy your first home, a parent who’s about to send their first child off to a college, or a real estate professional trying to make sense of current trends, pay close attention because it’s time to take an honest look at how the average family has fared over the past three decades.