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The Reality of Real Estate: Predictions on Trends for Purchasing a Home in 2021

December 28, 2020/in Reality of Real Estate /by Shauna Morris

We can all admit that 2020 has been an unexpected year, and many are wondering what 2021 will hold. It’s been a question that many real estate professionals are fielding from their clients, and as your trusty real estate advisors, we’re here to offer some predictions on trends for purchasing a home in 2021.

Even Lower Mortgage Rates

2020 brought some of the lowest mortgage rates we’ve seen, but Fannie Mae, Freddie Mac, and the National Association of REALTORS® are all predicting that those rates will fall again or stay flat in 2021. If you thought you missed out on getting a great 30-year fixed mortgage rate, you may be wrong!

Prices of Homes Will Increase

This year has marked a remarkable increase in home prices, and we’re likely to see more of the same in 2021, but at a slightly lower rate than that of 2020. Freddie Mac and the National Association of REALTORS® showed that prices increased by 5.8% in 2020, and they are likely to rise by 2.7% in 2021.

Making Compromises Will Be Necessary

Because of the bidding wars that are happening, it’s likely that you will need to closely look at the loan you’re pre-approved for and look at homes below that budget to account for higher deposits, full-price offers, multiple offer situations, and those waiving appraisals and inspections altogether. Take a hard look at what you need and what you want, then crunch the numbers on the down payment, lender’s fees, and property taxes you will face for the homes that meet your budget and the items on your needs list.

Inventory Will Remain Low

Unless buyers leave the market or new construction home builds increase exponentially, we will continue to see low monthly inventory. This is what will contribute to the increase in home prices that we talked about earlier. Low mortgage rates are incentivizing many to purchase a home now, but there’s a supply shortage of homes for buyers entering the market.

If you’re interested in learning more about the predictions we have on trends for purchasing a home in 2021, contact the David Morris Group at 775-828-3292. Our years of experience have made us experts on the Reno-Sparks real estate market, and we’re always happy to share our insights with you.

The Reality of Real Estate: Resolutions That Will Help First-Time Homebuyers Purchase a Home in the New Year

With the new year almost here, now is the perfect time to start setting goals and creating plans for how to achieve those goals. 2021 could be your year to become a homeowner, and we have some resolutions that will help first-time homebuyers purchase a home in the new year.

Set a monthly savings goal and a down payment goal

Start off by looking at what you already have saved and how much money you would like to have that goes towards a down payment for your home. Then begin to look at your expenses each month, current wages, and calculate how much you can reasonably save each month to meet your goal. This can also help you see if you may need to find a side hustle or cut expenses to help you increase the savings you’re setting aside each month to meet your goal.

Avoid big purchases

Every penny you have should go towards paying for the things you need and saving for purchasing a home. Even if you’ve met your down payment goal, you’ll want to have money set aside to cover closing costs, home inspection fees, moving costs, home repair projects, HOA fees, home insurance costs, etc. The latest iPhone will still be there when you’re a homeowner. Sacrificing a big purchase now will pay off in the long run!

Begin reaching out and making connections with real estate professionals

You want to build relationships with people who can help you achieve your goal of purchasing a home. Create a list of potential real estate professionals you’d like to work with and interviewing them to see which one will be a good fit for you.

Begin meeting with lenders to talk about what kind of loan you qualify for

Meeting with lenders is a very important part of the homebuying process. You need to know how much house you can afford to buy as well as the interest rate to pay back the loan. If the interest rate is too high, it may have something to do with your debt-to-income ratio, and your lender may be able to give you advice on how to pay down your debt while saving for a home to score you a better deal on your mortgage!

Get your credit score checked and contest anything that’s wrong

Your credit score can also have an impact on the mortgage rates you’re offered, so be sure to get a detailed report and contest anything that is wrong or fraudulent to have it removed from your credit history.

2021 is your year to become a homeowner, but you’ll have to work hard to stick to your resolutions to make it happen. If you need more tips on how to become a homeowner in the new year, contact the David Morris Group at 775-828-3292!

The Reality of Real Estate: Question Everything – Important Questions to Ask Throughout the Homebuying Process

November 25, 2020/in Reality of Real Estate, Reno-Sparks Real Estate /by Shauna Morris

If there’s one piece of advice we could give everyone, it’s to be inquisitive and question everything. That advice is especially important in the real estate world. As a home buyer, you’re making one of the most important and biggest financial decisions of your life, and you don’t want to go through the process confused or unaware of what you’re getting yourself into. Below are some important questions to ask throughout the homebuying process.

Questions to Ask Your REALTOR® About the Community:

How good is the school district? How do the schools in this neighborhood stack up against other schools in the area?
How close are the nearest hospitals, grocery stores, businesses, etc.?
Is there anything that would be considered a nuisance going on regularly in the area — construction, trains, planes flying overhead, etc.?
Is there an HOA, and if so, what are there regulations, dues, etc.?
How does the resale value of homes in the area do year over year?

Questions to Ask the Home Inspector:

Is there insulation in the walls and ceiling, and is it sufficient for the home?
Are there any foundation or structural issues?
Is there anything in your report that you think I should have an expert inspect or repair?
Was everything you saw normal wear and tear, or are there problems with the home?
If you were in my shoes, would you feel like you were making a good investment in buying this home, or are there areas for concern?

Questions to Ask Your Lender:

Do you know of any mortgage programs that I qualify for and could lower my costs?
Will a higher down payment improve the interest rate you can offer?
What do my projected monthly mortgage, property taxes, and homeowners insurance costs look like?
How much should I expect closing costs to be?

There are no dumb questions, and it’s important to have everything laid out on the table when you’re buying a home. These are some important questions to ask throughout the homebuying process, but if you have more questions about buying or selling your home, contact the David Morris Group at 775-828-3292!

The Reality of Real Estate: Nevada First-Time Homebuyer Loan Programs – What Do They Offer and Can They Help Cover Upfront Costs?

November 13, 2020/in Reality of Real Estate, Reno-Sparks Real Estate /by Shauna Morris

As a leading real estate broker in Northern Nevada, we’ve worked with buyers and sellers with a variety of needs, wants, and tools at their disposal. While we are not mortgage brokers and can’t give you loan information that is specific to your circumstances, we have come to learn that there are some great first-time homebuyer programs available to help you cover the costs and secure financing for your dream home.

National Programs

FHA Loans – Popular amongst buyers with low credit scores and those that can only afford a small down payment. The Federal Housing Administration allows down payments of 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500. Mortgage insurance is also required for an FHA loan.
VA Loans – Military members, veterans, and surviving spouses can qualify for loans with no minimum credit score and no down payment or mortgage insurance, but be prepared to pay a VA funding fee.
USDA Loans – Eligible rural and suburban homebuyers can receive a zero-down-payment mortgage through the USDA Rural Development Guaranteed Housing Loan Program. There are very specific limitations and guidelines you’ll have to meet to qualify.

Nevada Programs

Home Is Possible (HIP) – First-time and repeat homebuyers can receive up to 5% of the loan amount to pay the down payment, closing costs, or a combination of both. The money doesn’t have to be repaid if you keep the home as your primary residence. There are a variety of limitations that must be met, and you will need to complete a homebuyer education course.
Home Is Possible for First-Time Homebuyers – Down payment and closing cost assistance up to 4% of the loan amount that is strictly for first-time home buyers. There are limitations you will need to meet, but the money doesn’t have to be repaid if you stay in your home for 15 years.
Home Is Possible for Heroes – Active-duty military, honorably discharged veterans, members of the National Guard, and surviving spouses are eligible for below-market interest rates with a one-time fee of $755. Again, there are specific limitations you’ll need to meet, and an education course is required.

There are great programs at your fingertips to help you with the purchase of your first home. If you’re worried you can’t qualify for a great loan or won’t be able to secure financing, meet with an established mortgage lender to talk through your options. They have the tools and resources to find you the best program and can educate you on how to become a homeowner.

If you’d like some recommendations on great lenders in the area to contact for more information or you’re simply curious about the tools, resources, and knowledge we have for first-time homebuyers, contact the David Morris Group at 775-828-3292!

The Reality of Real Estate: An Inside Look at the Costs of a Home Mortgage

July 28, 2020/in Reality of Real Estate /by Shauna Morris

There’s no substitute for talking with an experienced lender to give you all of the important details about your home mortgage and the rates they can give you, but that doesn’t mean we can’t give you the inside scoop on the costs and general factors associated with a home mortgage. Check out some of the important contributions you’ll have to understand and contend with as a homeowner.

Principal – The amount of money you borrowed to finance your home. If you’re looking to purchase a $300,000 home and made a $60,000 down payment, your principal would be $240,000.
Interest – The fee that lenders charge in exchange for the loans they give to homeowners. Mortgage interest rates fluctuate wildly and also depend on your debt-to-income ratio. The better your credit, the better you will look like a sound financial investment to lenders, and the better your interest rates.
Property tax – The taxes your local government levies on your property in order to pay for community amenities like snow plowing, street sweeping, funding public schools and fire departments, etc. Many lenders will have you build an escrow account that saves money for the property tax payment by charging a little extra for your mortgage payment each month and setting aside those extra funds into a separate account. When it’s time to pay your property taxes, your lender will take care of it from the funds you’ve set aside. Property taxes are a percentage of your home’s value.

There may be other costs associated with your home mortgage that your lender will outline for you. Before choosing a lender, be sure to ask questions about if they set aside an escrow account to help you pay for your property taxes and home insurance, along with the interest rates you qualify for.

Remember that you not only want the best deal, but a lender that communicates with you and is ready and willing to answer any and all questions and concerns you have as they arise. Who you partner with can have a meaningful impact on how you feel about purchasing and owning a home.

As a first-time homebuyer, it’s crucial to understand the responsibility and costs associated with owning your own home. The David Morris Group is always happy to show you the ins and outs of owning a home and help you make the transition from renter to homeowner seamlessly. Give us a call at 775-828-3292.

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