In the Market: Welcome news on the mortgage front
This weekly feature is a real estate information roundup from a millennial’s point of view. When a young professional moves from Indianapolis (median home price $125K) to San Francisco (median price $1 million), you can expect an adventure. Nneka Madus, an analyst in Bank of the West’s Mortgage Division, did just that and has plenty to share in her quest to own a home in San Francisco.Getting a mortgage loan may get easier (woo hoo!). The Federal Housing Finance Agency recently unveiled steps it plans to take to overhaul certain mortgage rules. For millennials and first-time homebuyers, FHA loans are go-to loans in part because of their low 3.5% down payment requirement. Now there is talk of that down payment requirement going even lower. In this New York Times article, Dionne Searcy and Peter Eavis explain the Federal Housing Finance Agency’s plans to try to help bolster lending and home buying. If you’re thinking of buying a house, this is an article worth reading so you know some of the most current changes that are taking shape in the world of mortgages. Do you actually know what affects your credit report? Are your utility payments, for example, regularly reported to the credit bureaus? If you answered yes, you may want to keep reading. If you answered no, congratulations, you’re correct! (Don’t stop reading, though, because I like having you here.) If you’ve been following my blog, you’ll know that getting your credit together, before starting the home-buying process, is super important. Brena Swanson from HousingWire explores what affects a credit score. According to a recent TransUnion survey released Oct. 21, 53% of respondents incorrectly believe that payments for cable/Internet are regularly reported to credit bureaus — they are not, for now. It’s important to always live within your budget. Beyond managing your income and expenses, you may want to check out this article for a better understanding of what payments and debts do and do not get reported to credit bureaus, so you can help to ensure a better credit score. Finding a starter home is not always so simple. If you’re like me, you probably have a list of things that you want in a home, but your budget can’t quite accommodate all your wants — stainless steel appliances, live in a trendy neighborhood, doorman, rooftop deck, dry cleaners on-site. OK, those last couple might just be on my list, but you get what I mean. Anyway, looking at starter homes may be a good idea, but depending on where you live, there may not be a lot of starter homes to choose from. Marcie Geffner from Bankrate gives some strategies that millennials and first-time homebuyers can try if they find themselves struggling to find starter homes to purchase. For renters on the fence about becoming a homeowner, this Forbes article may help clear up some uncertainty. According to the Trulia contributor, buying is 38% cheaper than renting on average nationally, assuming a buyer has a traditional 20% down, 30-year mortgage. However, in addition to location, there are two big factors you may want to consider — how much will your down payment be and what type of mortgage will you get. If you live in either New York or California, the buy-versus-rent comparison isn’t as clear. To make the decision a little easier, Trulia’s Rent versus Buy calculator can help you compare renting and buying costs based on key assumptions, such as prices, rents and other factors. If you’re still on the fence, check out the article and calculator to get a clearer picture of your options.