How Much Do You Need for a Down Payment?

When you are saving money for your first home, it can be daunting to think about how much cash you will need to become a homeowner.

How Much Do You Need for a Down Payment?

While there are FHA-insured loans that require just 3.5% for your down payment, those loans require you to pay mortgage insurance for the life of the loan, which will keep your monthly payments higher. Most conventional lenders offer home loans with either a 10% or a 20% down payment, although some lenders offer loans requiring as little as 5% down.

You will need to consult with a lender to evaluate your individualized loan options, but before you do that, you should consider the pros and cons of various down payment scenarios.

Why a 20% Down Payment Is Ideal for Lenders

Mortgage lenders evaluate your credit profile, your debt-to-income ratio, your job history and your assets to make an educated guess about whether you will manage to repay your loan responsibly. A  20% down payment is viewed as ideal by lenders because you are investing a significant amount of your own money in your home and therefore the lender’s risk is reduced.

If you make a 20% down payment, you won’t have to pay private mortgage insurance. PMI provides insurance to the lender in case you default on your loan.

Buyer Advantages of 20% Down

In addition to eliminating the need for PMI, a 20% down payment will qualify you for a slightly lower interest rate than a borrower who makes a smaller down payment. Another benefit is that you will borrow less money, making your monthly payments smaller.

In addition, you will instantly have 20% equity in your home, which you can borrow against in the future or get back as part of your profit when you sell.

On the other hand, keep in mind that 20% of the average home price in the nation ($200,000) is $40,000. It can take years to amass that much cash and you will need additional cash for closing costs, cash reserves in case of an emergency and moving costs.

In the meantime, home prices may have risen and interest rates may have gone up, both of which will increase the cost of your purchase.

Smaller Down Payment Pros and Cons

If you make a down payment of 10% ($20,000 on the average home) or 5% ($10,000 on the average home), then you will be able to become a homeowner faster, since you won’t have to save as much cash. If you are able to save additional cash, it’s a smart idea to keep a robust savings account to cover emergencies and even anticipated expenses of homeownership such as maintenance and repairs.

There are some disadvantages, however, to making a smaller down payment:

  • You will need to pay PMI to your lender, which increases your monthly payments.
  • Your home loan will be larger, so your monthly payments will be larger, too.
  • Your interest rate will be a little higher, too, than for someone who makes a 20% down payment.
  • In order to qualify for a mortgage, your maximum debt-to-income ratio must be 43% or less, so a smaller down payment will make it harder to qualify for a loan.

The decision about the size of your down payment depends on a variety of factors including home prices in your market and your income. Find a good lender who will consult with you and help you make the best choice in the context of your individual financial plan.

This article was originally published by Michele Lerner on realtor.com. Click here to see the original article.

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How is Mid-Missouri doing in Home Sales? News from the Columbia Board of REALTORS®

So what’s been going on in Mid-Missouri homes sales so far this year? And what does that mean for you, in terms of buying or selling a home?

The following 11 graphs, courtesy of Columbia Board of REALTORS®, have the low-down on what has been happening in residential real estate in Boone County every month, from 2009 to the present.

Flustered by graphs? Don’t have time? Here’s a summary: We’re doing pretty well! Much is the same as last year, but there are some good changes.  This is a great time for sellers; market prices are rising, and the average days on market are continually decreasing this year. There has been lower inventory the past two years, and a shortage of homes creates a demand for new listings. With the lower inventory and higher demand, a higher percentage is going under contract than in past years. New construction sales are up compared to past years as well.

Keep in mind, too, that it’s only March!

If you want to see exactly what we’re talking about, take a look at the data!

1. Single Family Homes Sales 

1-single family home sales

2. Existing Single Family Home Sales 

2-existing single family home sales

3. New Construction Single Family Home Sales

3-new construction single family home sales

4. Single Family Average Sold Price

4-single family homes average sold price

5. Single Family Homes Median Sold Price

5-single family homes median sold price

6. Single Family Homes Average Days on Market

6-single family homes average dom

7. Single Family Homes Average Cumulative Days on Market

7-single family homes ave cumulative dom

8. Single Family Pending Listings on Market

8-single family pending listings on market

9. Single Family Active Listings on Market

9-single family active listings on market

10. Single Family New Listings Added to Market10-single family new listings added

11. Months Supply of Inventory of Single Family Homes

11-inventory of single family homes

How to Create a More Functional and Inviting Laundry Room

Does anyone really love their laundry room? Perhaps that overly affectionate word is, and always will be, a bit much when it comes to a room dedicated to a basic, yet necessary, household chore. But laundry isn’t the task it once was, so why should the room dedicated to its purpose be? Even if your laundry room was ill-conceived from the start, there are some simple ways to turn it from a workroom into a performance room. Here are five ways to help you “love” your laundry room.

 

Terracotta, Cottage, Built-in bookshelves/cabinets

Create some counter space

Having adequate surface area for sorting and folding clothes is certain to make your life easier. If you have sufficient floor space, consider adding a center island (similar to one you would select for your kitchen). In addition to serving up a generously sized counter area, it will offer more storage options below. Not enough space in the center of the room? Consider adding a countertop over a side-by-side washer and dryer that load in the front. That way, you can be sure you’re making good use of the space and giving the room a custom, built-in look.

Maximize storage options

Regardless of your laundry room’s size, there are always ways to add storage options. Any storage will help keep things in their place and, if not out of sight, at least confined and organized. Stock cabinets are inexpensive and can be installed easily. Consider both base- and wall-mounted units wherever possible. If cabinets are not an option, you’ll find a myriad of specially designed products to improve the storage capacity of any laundry room.

Upgrade your old appliances

If your existing washer and dryer are old, replacing them with new models will not only make your life easier but help you save on energy and water costs. Today’s machines offer a wealth of special, high-efficiency features from larger-capacity washers and dryers to power-foam and steam-cleaning options. Take into account front- and top-loading machines to determine the best solution for your needs. And don’t overlook the option of having a stacked pair; it’s an easy way to open up floor space for a cabinet and counter or sink.

Add a sink

If you don’t have a utility sink in your laundry room, investigate whether there is a way to add one. The cost may be less than you think and the convenience of having it for hand-washed clothing and other cleanup jobs will be well worth the consideration. If plumbing lines are already in place, you can probably do the installation yourself.

Paint the walls a soothing color

There is nothing like a fresh coat of paint to enliven a room. Think about painting the laundry room in a color that sets the right mood for you — perhaps a soothing blue or green, or a more energy-infused color like Tangerine Tango. Hang some art, install a new chandelier, add decorative window treatments — anything to make it seem less like an afterthought and more like any other room of the house. The simple decorative touches will create a more inviting space, one you could even grow to “love.”

To see some examples of stellar laundry rooms, and to get some inspiration for your own, take a look at some laundry rooms we love.

 

This article was originally published by BobVila.com on Zillow Blog. For the original article, click here

Bob Vila is the home improvement expert widely known as host of TV’s This Old House, Bob Vila’s Home Again, and Bob Vila. Today, Bob continues his mission to help people upgrade their homes and improve their lives with advice online at BobVila.com. His video-rich site offers a full range of fresh, authoritative content – practical tips, inspirational ideas, and more than 1,000 videos from Bob Vila television.

NHL Great Claude Lemieux Sells Arizona Oasis

Chalk up a win in the real estate column for NHL legend Claude Lemieux.

from realtor.com

The retired hockey great has sold his trophy home in the Phoenix valley for $2.9 million. While that figure is south of the $3.5 million price tag Lemieux put on the home when it went on the market last March, it’s $800,000 more than what the former right winger for the Montreal Canadiens, New Jersey Devils and other teams was asking when he first listed the desert property in 2011.

from realtor.com

The home is located in Paradise Valley, AZ, roughly 30 miles east of where Lemieux played for the Phoenix Coyotes during the twilight of his career. With its standard Southwestern Tuscan-style design, the home has five bedrooms, six bathrooms and more than 7,300 square feet of living space.

from realtor.com

from realtor.com

from realtor.com

Inside, an open floor plan contains various luxury appointments and finishes, including wood-beamed ceilings, coffers, and custom built-ins and cabinetry. A chef’s kitchen has top-tier appliances, and a palatial master suite has a fireplace and spa-like bathroom with a large soaking tub.

from realtor.com

from realtor.com

Outside, the one-acre property has a covered patio, a pool and spa with a waterfall feature, and a detached guest house.

from realtor.com

from realtor.com

from realtor.com

Lemieux, 48, is an Olympic gold-medalist and one of four NHL players to hoist the Stanley Cup trophy with three different teams. He scored 379 goals and 407 assists over the course of a 21-season career with the Canadiens, Devils, Colorado Avalanche, Coyotes, Dallas Stars and the San Jose Sharks.

Sandra Baldwin of Russ Lyon Sotheby’s International Realty was the listing agent.

This article was originally published by Neal J. Leitereg on realtor.com. To see the original article and more photos, click here.

The Dos & Don’ts of Picking a New House Color

There’s nothing like paint to transform the look of your home’s exterior, but when there’s no shortage of shades from which to choose, it can be challenging to make a final selection. We’ve collected some essential do’s and don’ts to help you find a hue you’ll be happy and proud to live with for years to come.

from Zillow

from Zillow

The do’s


Consider colors.
 Many homeowners worry that a unique color scheme will end up costing more, but fortunately that’s not the case! Applying a little imagination to the selection process won’t stress your wallet any more than choosing a neutral shade would — so why not have a little fun?

Take a hint. Notice what colors exist on your exterior that cannot be changed — the dark gray flecks in your brick, for instance, or that blue cast in your roofing shingles. A cohesive color scheme will take into account these unchangeable shades.

Accent. Add character and charm by painting your window trim and architectural details in a contrasting accent color. And, don’t forget that you can also use color to emphasize your entryway.

Consider trends. Trends in exterior paint move at a snail’s pace. The color you choose today is very likely to still be in style tomorrow or 10 years from now. White used to be the “safe” choice, but more and more homeowners are experimenting with color and tinted neutrals. Tour a few neighborhoods to get a sense of what others are opting for.

Light vs. dark. Light colors make a house look larger and more inviting and if painted on a house set back from the curb, they can bring the structure visually forward. Dark colors, meanwhile, make a house look more substantial. Especially if applied to a home’s lower portion, they suggest stability and permanence.

The don’ts


Misplace the accent. 
Accenting is great, but only when used to highlight the more attractive elements of your home. Avoid drawing attention to drab features like gutters, air conditioning units or unevenly placed windows.

Ignore the neighbors. While it’s a good idea to get creative, it’s usually a bad idea to pick colors that will clash with your neighbors’ exteriors. You can always stand out but try to do so in an unobtrusive way!

Ignore the landscaping. Maximize curb appeal by ensuring your house and yard are in harmony. A green-painted house would get lost on a heavily wooded lot, while a bright color might appear too brash where landscaping is sparse.

Wing it. Exterior painting is a big deal so plan accordingly! Try painting a small amount of your main, trim and accent color choices next to each other on a hidden side of the house. That way, you can test how your scheme is coming together.

This article was originally published on Zillow by Bobvila.com. Read the original here.

Bob Vila is the home improvement expert widely known as host of TV’s This Old House, Bob Vila’s Home Again, and Bob Vila. Today, Bob continues his mission to help people upgrade their homes and improve their lives with advice online at BobVila.com. His video-rich site offers a full range of fresh, authoritative content – practical tips, inspirational ideas, and more than 1,000 videos from Bob Vila television.

Pros and Cons of First-Time Homebuyer Loans

Navigating the range of home loans to find the one that best meets your needs can be difficult, particularly if this is the first home you’re buying.

Pros and Cons of First Time Homebuyer Loans

To make things easier, the federal government and most states offer insured home loans tailored to first-time homebuyers. These loans offer attractive benefits that can make the home-buying experience less costly and less restrictive. But they aren’t for everyone.

What Is a First-Time Homebuyer Loan?

A first-time homebuyer loan is a mortgage tailored to people buying their first home. While definitions of first-time homebuyer vary, it is usually someone who has never been listed on a deed as the owner of real estate. Be sure to confirm this with the loan provider when looking to obtain such a loan.

First-time homebuyer loans offer a low down payment, reduced interest, limited fees and the possibility of deferring payments. These types of loans are offered at a federal level by the Federal Housing Administration and by most states.

FHA first-time homebuyer loan programs offer easier qualifying guidelines than many other loan types. These loans allow higher debt ratios, lower credit scores, reduced closing costs and fees and limited down payments—typically around 3.5% of the purchase price.

Likewise, many state loans for first-time homebuyers are funded by the federal government. Most offer low interest rates, comparatively smaller down payment requirements and reduced fees.

Pros of First-Time Homebuyer Loans

The comparatively lower restrictions on these loans make them ideal for first-time homebuyers. You might want to consider these loans if:

  • You don’t have enough money saved up for a large down payment.
  • You have a limited ability to meet high interest payments and fees.
  • Your credit score is not high enough to qualify for other loan types.

But even if you do have funds saved for a large down payment, the low interest rates on first-time homebuyer loans could be too good to pass up.

Cons of First-Time Homebuyer Loans

If you are looking to buy a really expensive home in an affluent area, you might have to look elsewhere. On Jan. 1, the federal Housing and Urban Development department reduced the “national ceiling-loan limit” to $625,500 for most affluent of areas. Loan limits vary depending on the median income in that area, so be sure to check with your real estate agent or lender.

Another potential drawback is the requirement that the home you buy will be your primary place of residence. In other words, if you were looking to buy the property with the intention of renting it out, you probably won’t qualify for the loan.

Some other potential drawbacks include:

  • If you sell your home soon after purchasing it, you could lose some of the loan benefits.
  • If you want to refinance at a later date or otherwise change the terms of your debt or your collateral, this may not be possible with a first-time homebuyer loan.
  • While some of these loans don’t require you to purchase private mortgage insurance, you may be required to take out insurance provided by the loan program, and this insurance policy could have higher fees and longer payment terms than a private insurance option.

Despite these drawbacks, a first-time homebuyer loan could still be the most attractive type for you. Take a step back, evaluate your financial situation, consider the home you’re looking to buy and consider your options.

This article was originally published by Angela Colley on realtor.com. See the original article here

7 Tips to Stage Your House for Selling

The first step to getting buyers to make an offer on your home is to impress them with its appearance so they begin to envision themselves living there. Here are seven tips for making your home look bigger, brighter, and more desirable. Time allotted: 2-3 weekends.

Warm, neutral-colored paint is key when staging your home. Image: Radius Images/Getty Images

Warm, neutral-colored paint is key when staging your home. Image: Radius Images/Getty Images

 1. Start with a clean slate.

Before you can worry about where to place furniture and which wall hanging should go where, each room in your home must be spotless. Do a thorough cleaning right down to the nitpicky details like wiping down light switch covers. Deep clean and deodorize carpets and window coverings.

2. Stow away your clutter.

It’s harder for buyers to picture themselves in your home when they’re looking at your family photos, collectibles, and knickknacks. Pack up all your personal decorations. However, don’t make spaces like mantles and coffee and end tables barren. Leave three items of varying heights on each surface, suggests Barb Schwarz of Staged Homes in Concord, Pa. For example, place a lamp, a small plant, and a book on an end table.

3. Scale back on your furniture.

When a room is packed with furniture, it looks smaller, which will make buyers think your home is less valuable than it is. Make sure buyers appreciate the size of each room by removing one or two pieces of furniture. If you have an eat-in dining area, using a small table and chair set makes the area seem bigger.

4. Rethink your furniture placement.

Highlight the flow of your rooms by arranging the furniture to guide buyers from one room to another. In each room, create a focal point on the farthest wall from the doorway and arrange the other pieces of furniture in a triangle around the focal point, advises Schwarz. In the bedroom, the bed should be the focal point. In the living room, it may be the fireplace, and your couch and sofa can form the triangle in front of it.

5. Add color to brighten your rooms.

Brush on a fresh coat of warm, neutral-color paint in each room. Ask your real estate agent for help choosing the right shade. Then accessorize. Adding a vibrant afghan, throw, or accent pillows for the couch will jazz up a muted living room, as will a healthy plant or a bright vase on your mantle. High-wattage bulbs in your light fixtures will also brighten up rooms and basements.

6. Set the scene.

Lay logs in the fireplace, and set your dining room table with dishes and a centerpiece of fresh fruit or flowers. Create other vignettes throughout the home — such as a chess game in progress — to help buyers envision living there. Replace heavy curtains with sheer ones that let in more light.

Make your bathrooms feel luxurious by adding a new shower curtain, towels, and fancy guest soaps (after you put all your personal toiletry items are out of sight). Judiciously add subtle potpourri, scented candles, or boil water with a bit of vanilla mixed in. If you have pets, clean bedding frequently and spray an odor remover before each showing.

7. Make the entrance grand.

Mow your lawn and trim your hedges, and turn on the sprinklers for 30 minutes before showings to make your lawn sparkle. If flowers or plants don’t surround your home’s entrance, add a pot of bright flowers. Top it all off by buying a new doormat and adding a seasonal wreath to your front door.

This article was written by G.M. Filisko and originally published on HouseLogic.com.

G.M. Filisko is an attorney and award-winning writer who occasionally rearranges her furniture to find the best placement—and keep her dog on his toes. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.