To Buy or Not to Buy: First Time Stuart Home Buyer Question

07.29.15 by

To Buy or Not to Buy: First Time Stuart Home Buyer Question

 Granada Homes for Sale

Historically low mortgage interest rates have been a lifeline for many Stuart first time home buyers in recent years, keeping home ownership within reach for many who wouldn’t have otherwise been able to make the leap. For them, and for all the other than first time area home buyers, the fact that home values have continued to rise has been an added boon.

But, as just about every mortgage industry expert will tell you, the gig is almost up for those rock bottom rates. Yet the question for many first time home buyers remains: is it time to buy or not?

It’s a good time to take a hard look a few of the known facts—

According to web giant Zillow, as of Q1 2015, potential home buyers should expect to spend about 15% of their income on a mortgage for an average home in the U.S. When you compare this with the historical averages, it makes today’s rates temptingly low: the typical percentage has been closer to 21%. In terms of dollars spent monthly, that’s a big (and terrific) difference!

At the same time, the historical average has a typical renter shelling out 24% of income. Today, that’s closer to 30%…making first time home ownership that much more inviting.

Taken together, Zillow’s new calculations definitely appear to make finding a home to buy the more affordable option. On the other hand, it’s also true that a number of factors work against first time home buyers—in Stuart and nationwide. College debt, for one, is far more of an obstacle than it used to be. And the other side of those all-time high monthly rents in many places are making it that much harder for would-be first time home buyers to save for a down payment. But with the widespread phenomenon of growth in rents outpacing growth in home values, the rental affordability problem isn’t likely to improve any time soon. With mortgage rates likely to be on the increase as early as this fall, the long term outlook may not grow rosier as time passes. The implied takeaway: strike now while the iron is hot!

Whether this real estate foray is your first or tenth, if you’ve been considering taking advantage of this summer’s Treasure Coast home buying bargains, contact me today for an introduction to a qualified mortgage broker—and to discuss whether this might not just be the perfect time to start your search!

 How Today Stacks Up for Would-be Stuart First Time Homebuyers

Jensen Beach Homebuyers Should Check on Credit Report Inclusions

05.27.15 by

 Jensen Beach Homebuyers Should Check on Credit Report Inclusions

Finance

Here is a one-question True or False exam that every future local first-time home buyer should take:

True or False:

One sure way to build a strong credit report is to pay your bills on time.

(Answer: It depends)

Particularly for a first-time Jensen Beach home buyer, being able to present a strong credit report can make the difference between being able to afford a quality home that satisfies all your ‘must haves’—or one you just sort of settle for.

It’s about how much you can comfortably afford. The interest rate you will be offered is directly related to your bill-paying history, and a percentage point (or more) can make a big difference in your monthly budget. Because lending institutions charge more or less based upon the degree of risk they believe a loan carries, the stronger your credit report, the “more house” your monthly payment will cover.

Of course, since a string of unbroken records of punctual payments is what lenders look for, you might think that the answer to my one-question True or False exam would be an unqualified ‘True’—but not so fast. There’s a small catch is in the unbroken records that they look for. The word records.

Just paying your bills on time doesn’t build a strong credit report unless there are records of it—and for Martin County first-timers who have been paying rent for years, all those prompt payments could well be missing in action. The surprising reason lies in the nature of our whole credit reporting system.

It’s voluntary.

As the L.A. Times spotlighted last summer, landlords, phone and cable companies, “and many other creditors don’t report your payments” to the big three credit bureaus (Equifax, Experian and TransUnion). They aren’t required to do so. If you’re planning on becoming one of our Jensen Beach’s first-time home buyers, that might be a big deal—especially since rent payments usually make up the lion’s share of what you buy on credit. But you can do something about it!

Recognizing the difficulty some first timers were having in qualifying for home loans precisely because of such missing data, about five years ago, the credit bureaus teamed up with services like RentTrack that enable tenants to pay their rents online—and get credit for them. TransUnion and Experian also introduced services like “ResidentCredit” and “RentBureau” that encourage property managers to report rent payments for their tenants. That makes sense for landlords, too, because when rent payments are recorded, it enables them to better gauge the creditworthiness of their next batch of applicants.

Making sure your payments are being recorded will put today’s renters ahead of the game when they eventually decide they’re ready for the next step: home ownership. It simplifies the answer to that One-Question True or False credit report question greatly…to a simple “True”!

 Jensen Beach Homebuyers Should Check on Credit Report Inclusions