Don’t Let a Big Down Payment Stop You From Owning Your Dream Home

Do you want to buy a house, but aren’t sure you can cover the down payment? Let’s talk about
some down-payment assistance programs that may be able to help.

Down payment assistance can be the difference between saying “yes”
or “no” to a first home. If you are interested in buying a home but don’t
have cash on hand for a down payment, or if you have a son, daughter
or any other friend or family member who would like to purchase a home
but doesn’t have cash for a down payment in the state of Illinois, there
are several government programs that can assist you in securing a
down payment for your new dream home.

The First Home Illinois Program This program offers a forgivable
loan of $7,500 to buyers who will live in their new home for at least 5
years. This program will discontinue in December 2018, so to take
advantage of this down-payment assistance opportunity, your home
loan must be originated by December 15, 2018.

Even though this program will be discontinued for much of Illinois past 
2018, there are other down-payment assistance programs that will be 
available moving forward into 2019 and beyond:

- A forgivable loan of up to $6,000, with the amount based on the total
price of the home, forgivable after 5 years. 

- A $7,500 deferred program. This loan is repaid through a second
mortgage the buyer doesn’t make payments on, but is reimbursed when 
you sell your home.

- A $10,000 no-interest loan repaid through a monthly payment of
$83 for 120 months.

If you’d like to find out more about these programs, check out this flier!

If you have anything other questions regarding down-payment 
assistance in the purchase of your new home, please feel free to
give me a call or send me an email today. I’d love to hear from you.

What’s Your Home’s Value in Summer 2018?

This summer might be the last opportunity for you to take advantage of rising
home prices and high demand. Here’s why.

Summer is here, which means the high season for real estate. If you've been
thinking of selling your home, you might be in for a golden moment.

However, it might not last long. Let me explain why, with a few details of the
current real estate market.

Right now, homes are selling in record time. This May, it took just 34 days
on average for a home to go under contract, which broke last year's record of
36 days.

Home prices also continue to rise. In fact, they've been rising for six straight
years. For the past two years, this growth has been accelerating. As a
consequence, 27.6% of the homes sold in May sold above their list price.

All of this is due to a woefully short supply of homes on the market. In fact,
the total supply of homes is 5.4% lower this year than it was at the same time
last year.

However, the real estate market might be on the cusp of change.
Mortgage rates have been rising, and now stand near their highest
levels in seven years. As a result, pending home sales were down as of April.
A recent Redfin survey also found a drop in customers touring homes for
the first time in 27 months.

What's going on? The home price surge might be nearing its end. Overall,
home affordability is dropping: Over the past 6 years, there has been a
48% increase in average home prices, while wages increased only 14%.

While some sellers are still managing to sell at higher prices than listed, nearly
a quarter of sellers actually had to lower their prices this April.

If you do decide to sell right now, you would have an easy time of it,
and you could get top dollar for your home. That's because demand and prices
are both still high.

If you decide to wait, things might go south quickly. That’s because the market
may be reaching the limits of price growth and may be stalled by higher
mortgage rates.

If you want to take advantage of current conditions by buying or selling a
home any time in the near future, don’t hesitate to reach out and give me a call
or send me an email today. I look forward to hearing from you soon.

What Does Reduced Home Affordability Mean for You?

Home affordability is shrinking fast. Here’s what you should do to get ahead of the curve.

Home affordability is shrinking rapidly, according to research by Arch Mortgage Insurance. In the first quarter, affordability (defined as the size of the monthly mortgage payment needed to buy a home) dropped by 5%. This was mainly due to the increase in mortgage rates. As a consequence, more people are now stretched and taking on greater debt relative to their income. Other buyers are being pushed out of the market altogether. 

That's not all. Affordability is expected to drop an additional 15% to 20% by the end of the year. That's because home prices continue to rise, and the Federal Reserve is expected to ratchet up its reference interest rate, which often leads mortgage rates, three more times this year.

What does this mean for you?

If you're looking to sell, you won't have a hard time finding a buyer. Even with decreasing affordability, demand for homes still far outstrips supply. That means that this spring and summer might see an additional rush on the real estate market. It also means that right now might be a very good time to list your home if you've been thinking about selling for a while.

There’s no need to panic if you’re a homebuyer.

On the other hand, if you are thinking of buying a home, you might think that this news spells doom for you. However, there's no need to panic. While affordability is dropping, it is still well above historic averages (just like current mortgage rates). In fact, Arch Mortgage Insurance estimates that homes are now 15% to 20% more affordable than they have been in the period from 1987 to 2004. When rates go up, it will affect what your monthly payments will be on a new home. From this perspective, it makes sense to move now in case you've been looking to buy before rates rise further. 

So what's the next step? If you’re thinking about buying or selling a home, give us a call. We’d be happy to answer any questions you may have. We look forward to hearing from you soon.