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Buyers: Challenged by Student Debt? Consider Down Payment Programs

Student loan debt is one of the biggest factors impacting millennials’ ability to purchase a home. According to the National Association of REALTORS® (NAR), 80 percent of millennials do not own a home, and, of that, 83 percent say student loan debt is impacting their ability to buy. Millennials expect to be delayed from home-buying for a median of seven years, the NAR research shows.

There are alternatives, however, that millennials may not know about. In fact, according to a 2016 ATTOM Data Solutions survey, few buyers and real estate agents know about the close to 2,500—mostly local—down payment assistance programs. Across the 513 counties surveyed in the ATTOM Data Solutions report, buyers that used these programs saved, on average, $17,766 over the life of their loan.

From offerings that benefit first-time homebuyers to options for refinancing costly student loan interest rates, it’s important that today’s homebuyer is aware of all the viable options for purchasing a home.

What’s Out There?
For consumers who are having trouble saving for a large enough down payment, there are plenty of options that offer grants or down payment assistance. The National Homebuyers Fund (NHF), for example, has multi-state Down Payment Assistance (DPA) programs that offer closing assistance or down payment grants for up to 5 percent of the loan amount.

The U.S. Department of Agriculture (USDA) also has low- and no-down payment options via its Single Family Housing Guaranteed Loan Program, which assists lenders in offering low- and moderate-income households with purchasing opportunities in rural areas, for which closing costs and other related expenses can be rolled into the loan.

Additionally, there are more localized options available on a state-by-state basis. Here are a few examples:

  • Baltimore, Md./Washington, D.C. – The Maryland Mortgage Program offers a discounted mortgage rate and up to $5,000 in down payment assistance when consumers purchase in a sustainable community.
  • Ohio Grants for Grads offers reduced-rate mortgages for first-time homebuyers who’ve earned their associate, bachelor, master or doctorate degrees within the last four years.
  • Rhode Island – The First Down Program allows first-time homebuyers to purchase a one- to four-family home or condominium with down payment assistance of $7,500, forgivable after five years of owning the home as a primary residence.

More and more companies are introducing homebuyer assistance programs to tackle the student loan debt challenge that many of today’s buyers are facing, as well; however, buyers and agents should first consult a financial expert before participating in or recommending these programs. For example, the student loan cash-out refinance that multiple lenders offer, which allows homebuyers to use their equity to pay off high-interest student loans, may not make as much financial sense with the introduction of the new tax bill. as home equity financing is no longer tax-deductible.

With other incentive programs, such as the Eagle Home Mortgage’s Student Loan Debt Mortgage Program, homeowners can pay off outstanding student loan debt (up to $13,000 for this specific program) by redirecting 3 percent of their purchase price to student debt payoff when buying a new home from the home builder. Buyers should carefully assess whether these programs are financially worthwhile.

These are just a sampling of the available down payment assistance and grant programs that can help consumers with high student loan debt achieve their homeownership dream. It’s imperative that real estate agents research these offerings in order to assist consumers who believe homeownership is still out of reach.

Dominguez_Liz_60x60_4cLiz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post Buyers: Challenged by Student Debt? Consider Down Payment Programs appeared first on RISMedia.

5 Tips to Help You Find a Starter Home

(TNS)—First-time homebuyers might well wonder: Where are all the starter houses? They’re right to ask, because starter homes are becoming increasingly scarce in many housing markets. Housing inventory is low and home prices are soaring.

What’s a first-time buyer to do?

Here are five tips for finding a starter home:

Be realistic about today’s market. Sellers clearly have an advantage in the current market. Inventory is low, which keeps pushing home prices to record levels, according to the National Association of REALTORS® (NAR). Buyer competition is fierce, as homes in the lower price ranges fly off the market.

Unfortunately, that leaves many first-time buyers––especially those with tight budgets––on the sidelines. If you’re searching for your first home, be realistic about what you can afford and what amenities come with that budget. (Hint: You may have to forgo top-of-the-line appliances and shiny quartz countertops.)

A starter home isn’t necessarily your forever home. Be prepared to make some compromises to get your foot in the homeownership door.

Adjust your wish list. Buyers shopping for their first home need to be open-minded about the location, size and condition of the home they want to buy, says Tim Deihl, associate broker with Gibson Sotheby’s International Realty in Boston.

For many buyers, a classic starter home, which traditionally doesn’t have many amenities, is more achievable.

“If your first home is the place you’re going to have your family, maybe build an addition and stay there forever; that’s one set of criteria. If your starter home will be a financial launch pad into a larger, better home, that’s a different approach,” Deihl says.

Another strategy: Look for an older home in a well-established neighborhood. Resales typically cost less than brand-new homes, says Bradley Hunter, chief economist for HomeAdvisor.com, a home improvement matching service based in Golden, Colo.

Older homes typically need more maintenance and repairs, which offset some of the savings; however, Hunter says, buyers who choose a used home might be able to do repairs and renovations over time, pacing themselves to make the cost manageable.

Hire the right real estate agent. When you’re up against stiff competition, working with an experienced real estate agent who knows the local market is key.

Look for an agent who specializes in the neighborhoods you’re interested in. Savvy agents should be able to answer your questions about neighborhood amenities, local schools and nearby home values.

A good agent shines when it comes to negotiating the deal and writing a strong offer letter backed with solid data. Your agent can suggest certain strategies to win in a competitive market, such as limiting contingencies or writing a personal letter.

Ask friends and relatives to recommend agents they have used and were happy with. Also, interview two or three different agents. Find out how they prefer to communicate with clients and how often you’ll get updates. Finally, research the agents you’re considering online to see what past clients have said about their work.

Rethink location. If you’re thinking about starting a family in the future, don’t focus too much on your home’s location, size and school district just yet, Deihl says. Resetting those parameters can make it easier to buy a first home.

“Buyers may be in a position where schools won’t impact them for six or seven years,” Deihl says. “That’s a good opportunity to buy in the city, make some money and roll that into a community where they want to be longer-term with the kids.”

Buyers who sacrifice location for affordability can find themselves in a neighborhood far from major job centers with a long daily commute and expensive transportation costs. Sometimes that trade-off makes sense, but not always, says Cathy Coneway, a broker for Stanberry & Associates REALTORS® in Austin, Texas.

“You have to look at how much you make and how much you can afford to spend for gas,” Coneway says. “You might actually be better off buying a house that’s closer to town so you have more cash flow for property taxes, insurance and living expenses.”

Make a strong offer. When a well-priced starter house comes on the market, the quest to buy it can be “super competitive,” Deihl says.

One way to strengthen an offer is to present a loan preapproval that includes everything but a title search, appraisal and hazard insurance, says Jay Dacey, a mortgage broker at Metropolitan Financial Mortgage Co. in Minneapolis.

A strategic phone call might help, too.

“We call the listing agent and say, ‘Mr. and Mrs. Jones submitted an offer on your property. Not only are they preapproved, but they’ve gone through the underwriting approval process with our bank,'” Dacey says. “That makes the offer stronger.”

Other ways to entice sellers: Offer above asking price (if you can afford to), keep repair requests to a minimum, make a larger down payment or give them more time to move after closing.

© 2018 Bankrate.com
Distributed by Tribune Content Agency, LLC

For the latest real estate news and trends, bookmark RISMedia.com.

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5 Tips for Buying a Foreclosed Home

(TNS)—Buying a foreclosed home is not like the typical home purchase.

In many cases, only one real estate agent is involved.

The seller wants a preapproval letter from a lender before accepting an offer.

There is little, if any, room for negotiation.

The home is sold as-is, and it’s up to the buyer to pay for repairs.

On the upside, most bank-owned homes are vacant, which can speed up the process of moving in.

“Buying a foreclosure is definitely a bit of a grind. It’s not easy,” says Robert Jensen, broker and president of the Rob Jensen Co. in Las Vegas. “You’re getting fantastic pricing, but sometimes it takes going through a lot of houses and writing a lot of offers to get the home you want.”

Find a real estate broker and a lender.
The first two steps for buying a foreclosure should be taken at the same time. While you’re looking for a real estate broker who works directly with banks that own foreclosed homes, get a preapproval letter from a lender.

Elaine Zimmerman, a real estate investor and author, recommends that shoppers first visit any site with a database of foreclosed homes. You also could look at a local real estate website that lets you filter the results to see only foreclosures.

You might find the acronym REO, which means “real estate owned.” This signifies that the property has been foreclosed on and the lender now owns it and is selling it.

Get a broker on your side.
The goal of combing through foreclosure listings is not to find a house; it’s to find an agent. Banks usually hire real estate brokers to handle their REO properties. In many cases, the buyer works directly with the bank’s broker instead of using a buyer’s agent. That way, the commission doesn’t have to be split between two brokers.

“A lot of these REALTORS® have a long-term relationship with these banks, and they know of listings that haven’t even come on the list yet,” Zimmerman says. “Call them about the listings that you’re interested in, but also ask them about listings that may be coming up, because sometimes it may take a day or two or even a week before a listing actually comes onto the database.”

Get a preapproval letter.
Unless you plan to pay cash, you’ll need a recent preapproval letter from a lender. The letter will detail how much money you can borrow, based on the lender’s assessment of your credit score and income.

“The problem is, buyers want to find the house first, and then they think they’ll work out the financing,” Jensen says. “But the problem is, the really good deals on these bank-owned, they go quick—and the buyer doesn’t necessarily have time to try to work out the financing afterward. They need to work that out first.”

Zimmerman says some first-time buyers make the mistake of assuming that the bank selling the home will also finance the mortgage as part of the deal. “Don’t expect to get financing from the bank that foreclosed on it,” she says. “That’s a totally separate transaction, and they view it that way. The people in the (bank’s) REO department are not loan officers. They are getting rid of bad assets.”

Look at comps before making an offer.
There’s no rule of thumb on what the bank’s bottom line is on price. Just as with any other real estate purchase, you have to look at the recent sales prices of comparable properties, or “comps.”

“You really have to look at the comps in today’s current market conditions and write a competitive offer based on that,” says Jensen. “Sometimes the bank prices the homes really low, and the home will have multiple offers over list price within hours.

“Sometimes it’s priced too high, and you can come in lower. A lot of times, buyers will come to me and say, ‘We want to write offers for half price.’ It just doesn’t work that way.”

Bid the higher price if homes are selling quickly.
Keep in mind that foreclosed houses generally are sold as-is. That means that you shouldn’t expect to get a discount to compensate for repairs.

Jensen says: “Let’s say the house is listed for $200,000, all the comps are $200,000, and so the client comes in and says, ‘Hey, look, I want to buy this house but I’ve got to do paint, carpet and fix some mold damage, so I want to take $15,000 off the price.’ You know what? All the other ones were in the same condition, and they sold for $200,000.”

Jensen further advises finding out how quickly comparable houses are selling. With foreclosures, a 3,500-square-foot house with a pool in a gated community might sell within days or hours, but more modest homes might sit on the market for weeks, or vice versa, depending on market conditions.

If the foreclosed homes you’re looking at are selling swiftly, “the best advice on a bank-owned property is to come in at your highest and best, unless the property has been sitting on the market forever with no activity,” Jensen says.

“If you’re going to be upset because you would have gone $5,000 more but you lost the property, just bid the higher price in the first place.”

Find tradespeople who can assess and repair damage.
Because repairs are almost inevitable with foreclosed houses, Jensen and Zimmerman recommend getting to know tradespeople who can assess and repair damage from pests, mold and leaks. Zimmerman says you should assume that the air conditioning needs to be fixed, and possibly the heating system, too.

It all sounds daunting—but at least you don’t have to wait for the owner to move out of the house.

©2018 Bankrate.com
Distributed by Tribune Content Agency, LLC

For the latest real estate news and trends, bookmark RISMedia.com.

The post 5 Tips for Buying a Foreclosed Home appeared first on RISMedia.

 

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About Chautauqua

Chautauqua County occupies the extreme southwest corner of New York State. The county takes its name from the largest lake in the area, which is twenty miles long and 1,308 feet above sea level. At one end is located Mayville, the county seat and at the other end is the city of Jamestown. 

Outstanding recreational opportunities exist in the county, from hiking and biking on the county's public trail systems, to fishing, boating and canoeing on the lakes, to skiing and snowmobiling. The famous Chautauqua Institution, founded in 1874 and located on Chautauqua Lake, hosts educational and cultural programs each summer. 
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