Author: Diane Nguyen

How Homeownership Is Life-Changing for Many Women

Diane Nguyen

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Throughout Women’s History Month, we reflect on the impact women have in our lives, and that includes the impact on the housing market. In fact, since at least 1981, single women have bought more homes than single men each year, and they make up 17% of all households.

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The rise in women pursuing homeownership hasn’t just made an impact on the housing market. It’s also been an asset for those buyers and their households. That’s because homeownership has many benefits, both financial and personal.

On the financial side, housing proves to be the key to building wealth for single women. Ksenia Potapov, Economist at First American, says:

“For single women, housing has always made up a large share of total assets. Over the last 30 years, the average single woman’s wealth has increased 88% on an inflation-adjusted basis, from just over $142,000 in 1989 to $267,000 in 2019, and housing has remained the single largest component of their wealth.”

The financial security and independence homeownership provides can be life-changing, too. And when you factor in the personal motivations behind buying a home, that impact becomes even clearer.

A recent report from the National Association of Realtors (NAR) shares the top reasons single women are buying a home right now (see chart below):

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Bottom Line

Homeownership can be life-changing no matter who you are.  At United Family Mortgage, we get it!  United Family Mortgage is a Mortgage Broker.  We shop for mortgage deals for our borrowers, from conventional low-interest mortgages and low-down-payment mortgages to zero-downpayment options and VA (veteran) mortgages.

So why get a personal shopper, like United Family Mortgage, for your mortgage?  Because you want an advocate, not an order taker.  For a no-obligation mortgage consultation or a mortgage pre-approval, contact us today at 763-241-0306.

How Changing Mortgage Rates Can Affect You

Diane Nguyen

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The 30-year fixed mortgage rate has been bouncing between 6% and 7% this year. If you’ve been on the fence about whether to buy a home or not, it’s helpful to know exactly how a 1%, or even a 0.5%, mortgage rate shift affects your purchasing power.

The chart below helps show the general relationship between mortgage rates and a typical monthly mortgage payment:

Even a 0.5% change can have a big impact on your monthly payment.  And since rates have been moving between 6% and 7% for a while now, you can see how it impacts your purchasing power as rates go down.

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You may be tempted to put your homebuying plans on hold in hopes that rates will fall.  But that can be risky.  No one knows for sure where rates will go from here, and trying to time them for your benefit is tough. Lisa Sturtevant, Housing Economist at Bright MLS, explains:

“It is typically a fool’s errand for a homebuyer to try to time rates in this market . . . But volatility in mortgage rates right now can have a real impact on buyers’ monthly payments.”

That’s why it’s critical to lean on your local expert, United Family Mortgage to explore your mortgage options, understand what impacts mortgage rates, and plan your homebuying budget around today’s volatility.  United Family Mortgage also offers tailored advice to your specific situation and goals, so you have what you need to make an informed decision.

Bottom Line

For a 2nd opinion or updated mortgage pre-approval letter, contact United Family Mortgage today.  When it comes to the biggest purchase of your life, don’t take the first mortgage offer that comes along, contact United Family Mortgage to shop on your behalf.  We are a mortgage broker, not a mortgage bank.  We will shop for the best mortgage options, rates, and terms for you.  Contact us today at 763-241-0306.

 

VA Loans Can Help Veterans Achieve Their Dream of Homeownership

Diane Nguyen

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For over 78 years, Veterans Affairs (VA) home loans have provided millions of veterans with the opportunity to purchase homes of their own. If you or a loved one have served, it’s important to understand this program and its benefits.

Here are some things you should know about VA loans before you start the homebuying process.

What Are VA Loans?

Mortgage Broker, 0 down mortgage, zero down home loans, home loans with no down payment, down payment assistance, apply for VA home loan, VA home loan, veteran home loan, veteran home mortgageVA home loans provide a pathway to homeownership for those who have served our nation. The U.S. Department of Veterans Affairs describes the program like this:

“VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy.”

Top Benefits of the VA Home Loan Program

In addition to helping eligible buyers achieve their homeownership dreams, VA loans have several other great benefits for buyers who qualify. According to the Department of Veteran Affairs:

  • Qualified borrowers can often purchase a home with no down payment.
  • Many other loans with down payments under 20% require Private Mortgage Insurance (PMI). VA Loans do not require PMI, which means veterans can save on their monthly housing costs.
  • VA-Backed Loans often offer competitive terms and mortgage interest rates.

A recent article from Veterans United sums up just how impactful this loan option can be:

“For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. These flexible, $0-down payment mortgages have helped more than 24 million service members become homeowners since 1944.”

John Bell, Acting Executive Director of the Department of Veterans Affairs Loan Guaranty Service, also explains why this program is so powerful:

“It provides early ownership for many people that would not have that opportunity to begin with. Since there’s no down payment, it allows people to hold their wealth and it gives them the ability to have long term financial security by being able to own a house and let that equity grow.”

Bottom Line

Homeownership is the American Dream.  Our veterans sacrifice so much in service to our nation, and one way we can honor and thank them is to ensure they have the best information about the benefits of VA home loans.   Thank you for your service.  If you are a service member or veteran, ask us what a VA mortgage would look like for you.  You’ll be glad you did.  Contact United Family Mortgage to shop on your behalf at 763-241-0306.

 

Financial Fundamentals for First-Time Homebuyers

Diane Nguyen

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Are you prepping to buy your first home? If so, one of the steps you should take early on is to make sure you’re financially ready for your purchase. Here are just a few of the financial fundamentals you’ll need to focus on as you set out to buy a home.

Build Your Credit

Your credit is one element that helps determine which home loan you’ll qualify for. It also impacts your mortgage interest rate. While there are many factors that go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.

So how do you make sure your credit is in the best shape possible when it’s time to buy? A recent article from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include:

  • Tracking your credit and disputing any errors that show up on your reports.
  • Paying your bills on time. This includes making loan payments and paying down any open lines of credit.
  • Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able can help.

Automate Your Savings for Your House Fund

You might also be wondering how you can achieve your down payment savings goals. Bankrate provides buyers with a number of tips to help them save, including searching for down payment assistance programs and ways you can save more, faster. As the article says:

“One of the best ways to save for anything — including a down payment — is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.”

Get Pre-Approved

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As you prepare for your purchase, you’ll also need to have a good grasp on your budget and how much you’ll be able to borrow for your home loan. That’s where the pre-approval process comes in.

Pre-approval from a lender lets you know how much money you can borrow for your home loan. And having that knowledge, plus an understanding of your savings can help you decide on your target price range for a house.

From there, you can start browsing for houses online and see what’s available in your area at that general price point. This can help you really understand your options so you can start to picture your future home.

For Customized Advice, Build a Team of Professionals

For a hassle-free mortgage consultation or a second opinion, contact Jim Riley with United Family Mortgage today at 612-968-2601 or email jriley@unitedfamilymortgage.com.

Bottom Line

If you’re ready to get the homebuying process started, let’s connect so you can begin to build your team of professionals today.

Wondering How Much You Need To Save for a Down Payment?

Diane Nguyen

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If you’re getting ready to buy your first home, you’re likely focused on saving up for everything that purchase involves. One cost that’s likely top of mind is your down payment. But don’t let a common misconception about how much you need to save make the process harder than it could be.

Understand 20% Isn’t Always the Typical Down Payment

Freddie Mac explains:

“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”

Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize. According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, the median down payment today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):

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Learn About Options That Can Help You Toward Your Goal

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If saving for a down payment still feels like a challenge, know that there’s help available. A real estate professional and trusted lender can show you options that could help you get closer to your down payment goal. According to the latest Homeownership Program Index from Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.

Plus there are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.

To understand your options, be sure to do your homework. If you’re interested in learning more about down payment assistance programs, contact Jim Riley with United Family Mortgage today at 612-968-2601 or email jriley@unitedfamilymortgage.com.  Jim has over 30 years of experience helping buyers secure mortgage financing.

 

Bottom Line

Remember, a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect. You’ll also want to make sure you have a trusted lender so you can explore your down payment options.

Avoid the Rental Trap in 2023

Diane Nguyen

 

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If you’re a renter, you likely face an important decision every year: renew your current lease, start a new one, or buy a home. This year is no different. But before you dive too deeply into your options, it helps to understand the true costs of renting moving forward.

In the past year, both current renters and new renters have seen their rent go up based on information from realtor.com:

“Three out of four renters (74.2%) who have moved in the past 12 months reported seeing their rent increase. The strain from recent rent hikes isn’t exclusive to renters who have recently moved. Nearly two-thirds of renters (63.2%) who have lived in their current rental between 12 and 24 months, and likely renewed their lease, have also reported increases in their rent.”

And if you look back at historical data, that shouldn’t come as surprise. That’s because, according to the Census, rents have been rising fairly consistently since 1988 (see graph below):

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So, if you’re considering renting as an option in 2023, it’s worth weighing whether this trend is likely to continue. The 2023 Housing Forecast from realtor.com expects rents will keep climbing (see graph below):

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That forecast projects rents will increase by 6.3% in the year ahead (shown in green). When compared to the blue bars in the graph, it’s clear that the 2023 projection doesn’t call for an increase as drastic as the ones renters have seen over the past two years, but it’s still above the historical average for rent hikes between 2013-2019.

That means, if you’re planning to rent again this year and you’ve not yet renewed your lease, you may pay more when you do.

Homeownership Provides an Alternative to Rising Rents

These rising costs may make you reconsider what other alternatives you have. If you’re looking for more stability, it could be time to prioritize homeownership. One of the many benefits of owning your own home is it provides a stable monthly cost that you can lock in for the duration of your loan. As Freddie Mac says:

“Monthly rent payments may increase over time, but a fixed-rate mortgage will ensure that you’re paying the same amount each month. With a fixed-rate mortgage, your interest rate is locked in for the life of loan. Steady payments allow you to budget wisely and make plans for the future.”

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If you’re planning to make a move this year, locking in your monthly housing costs for the duration of your loan can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases like you would if you left your housing payment up to your landlord and their renewal cycle.

Homeowners also enjoy the added benefit of home equity, which has grown substantially. In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $34,300 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage on a house, you grow your wealth through the forced savings that are your home equity.

Bottom Line

If you’re thinking of renting this year, it’s important to keep in mind the true costs you’ll face. Let’s chat to see how you can begin your journey to homeownership today.

For a hassle-free mortgage consultation or a second opinion, contact Jim Riley with United Family Mortgage today at 612-968-2601 or email jriley@unitedfamilymortgage.com.

Mortgage Pre-Approval in 2023: What You Need To Know

Diane Nguyen

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One of the first steps in your home-buying journey is getting pre-approved. To understand why it’s such an important step, you need to understand what pre-approval is and what it does for you. Business Insider explains:

“In a preapproval [sic], the lender tells you which types of loans you may be eligible to take out, how much you may be approved to borrow, and what your rate could be.”

Basically, pre-approval gives you critical information about the home-buying process that’ll help you understand your options and what you may be able to borrow.

How does it work? As part of the pre-approval process, a lender will look at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. That can make it easier when you set out to search for homes because you’ll know your overall numbers. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.

Pre-Approval Helps Show You’re a Serious Buyer

Another added benefit is pre-approval can help a seller feel more confident in your offer because it shows you’re serious about buying their house. A recent article from Forbes notes:

“From the seller’s perspective, a preapproval [sic] letter from a reputable local lender often can make the difference between accepting and rejecting an offer.”

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This goes to show, even though you may not face the intense bidding wars you saw if you tried to buy during the pandemic, pre-approval is still an important part of making a strong offer. In fact, Christy Bieber, Personal Finance Writer at The Motley Fool explains it may be the most important part of making an offer:

“Pre-approval maximizes the chances you’ll be able to actually close the deal – and sellers want to see that.

The fact that a pre-approval gives you a better chance of getting your offer accepted is undoubtedly the most important reason to complete this step . . .”

Bottom Line

Getting pre-approved is an important first step toward buying a home. It lets you know what you can borrow and shows sellers you’re serious about purchasing their home.  For a no-obligation mortgage consultation or a second opinion, contact Jim Riley with United Family Mortgage today at 612-968-2601 or email jriley@unitedfamilymortgage.com.