Alternative Ways to Come Up With the Down Payment on a Home

To successfully purchase a home today, you will need a down payment of at least 3.5 percent of the purchase price. Gone are the days of no down payment alternatives, down payment assistance and seller-offered programs to come up with the money needed to buy a home. Instead, let's look at the five ways you can come up with a down payment to seal the deal. Full Article

1. Gift Money: Gift money is simply that -- a gift from family or documented close relationship. The giftor needs to provide a gift letter and paper trail for the monies they are gifting for the benefit of the buyer. In other words, they'll have to provide a bank account showing that they had the ability to gift the money. In short, gift monies cannot be funds sitting at home in a safe.

2. 401(k)/Retirement Loan: Typically, borrowed funds for a down payment are a no-go, but the exception is a 401(k) or equivalent retirement account (or current home equity line). If you can borrow money from your 401(k) for your down payment, this is accepted for obtaining a purchase mortgage loan. Note: Depending on the terms of your loan, this could be counted as a liability andfactored into your debt-to-income ratio.

3. Sale of a Good: Believe it or not, you can sell your recreational vehicle and use the net proceeds from the transaction as your down payment. Let's say that you decide to sell your motorcycle for $10,000. You'll need to provide the full bill of sale -- as well as the bank statement depositing those funds, matching the bill of sale -- to your mortgage lender. Same goes for any other recreational vehicle, or other item that "makes sense." The key is as long as it's plausible and passes the litmus test and you can paper trail the monies from start to finish, you should have no problem using those monies for the house purchase.

4. Trust Funds, Settlement Awards, etc.: If you come into a chunk of change via an inheritance, settlement, lottery winning, trust fund disbursement, family buyout, even a gambling victory, all of these monies can be used for the down payment as long as the sourcing of the monies is fully documented from A to Z with no stone left unturned. Matching of the amounts of monies used to the original deposits will be required when it comes time to secure the loan.

5. Line of Credit: Where a down payment lacks, enter strength in income. You can take out a line of credit or a personal loan, deposit the full funds into your bank account and after two months, the funds will be eligible for use in the transaction.

While a down payment is needed to purchase in the current real estate market, a prudent homebuyer should also have plans for having available funds for closing costs. The same out-of-the-box strategies listed above can also be used to procure funds for closing costs.

Closing costs run at about 3 percent of the purchase price, on average. So the total funds to close would be 3 percent of purchase price plus 3.5 percent down.

Do your homework. If you don't have a down payment for a house, or your down payment is coming from more than one source, make sure that you talk to a lender upfront so they can help you navigate the best way to properly support and document your monies used. Doing this on the front end will save you from wasting time creating and gathering unnecessary paperwork.

Are Dining Rooms Dead? 5 Better Ways To Use That Space

How many times did your family use your dining room last year? If you can count the meals at the table on one hand, then you may want to consider repurposing that room. It can be hard to let go of the dining-room dream, but let’s be realistic. A room that only gets used during holidays isn’t worth keeping. If you’re willing to break out of the traditional dining-room mold, the possibilities can go a lot further than three-course meals and dress shoes. Here are five ways to get more from your dining room. For example, if you spend a lot of time in the kitchen and love the idea of your kids playing close by, then turn your dining room into their playroom. Ditch the fancy table and replace it with a craft table and add toy bins or book shelves. Full Article 

Source

30-Year Fixed Mortgage Rates Fall for First Time in Five Weeks

Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 4.37 percent, down from 4.52 percent at this same time last week.

The 30-year fixed mortgage rate hovered between 4.56 and 4.48 percent for the majority of the week before steadily declining near the current rate during the weekend.

“Mortgage rates retreated late last week on a significant drop in new home sales and weaker-than-expected manufacturing data,” said Erin Lantz, director of Zillow Mortgage Marketplace. “This week, if scheduled economic reports reveal additional downbeat economic data, rates could drift even lower heading into the Labor Day weekend.”

Additionally, the 15-year fixed mortgage rate this morning was 3.34 percent and for 5/1 ARMs, the rate was 3.12 percent. Full Article

Landscape Your Home To Sell

When selling your home, landscaping determines whether your home feels inviting from the outside. Curb appeal is important to 71 percent of homebuyers when choosing their abode, according to a 2013 National Association of Realtors survey. Landscaping is a large part of that curb appeal, says Frank J. Lucco, managing director of IRR-Residential Appraisers & Consultants in Houston. “That first impression is important,” says Lucco. “If they don’t like the looks of the front of the house, which is mostly landscaping,” often they won’t even go inside. A landscaping investment could potentially pay a 215 percent return in home value, says Margaret Woda, a Realtor with Long & Foster Real Estate in Crofton, Md. While you may only recoup 68 percent of kitchen renovation fees, Woda says landscaping is money well-spent. Here are five things to consider with your landscaping. Full Article

Source

Selling Your Home: Should You Build A Fence So Buyers Won’t Worry About Privacy?

“It’s never great to be able to look into someone else’s window,” said Lyn Stevens, a real estate broker at Sotheby’s International Realty in Greenwich, Conn. And it’s worse still when they can look into yours. But before trying to solve the problem, she said, “think about return on investment, and salability.” A thoughtfully designed fence may improve the look of your yard and resolve privacy issues, she said, which could make the property more salable. But that doesn’t necessarily mean a higher sale price. “These things end up costing a lot of money, and you won’t necessarily get the value out of them,” she said. “If you had two homes side by side, and one had a fence in the backyard and the other one didn’t, I don’t see the one with the fence selling at a higher number.”  Full Article

source

Mortgage Rates Are On The Rise But It’s No Big Deal

For the first time in a long time, the nation is buzzing over mortgage rates - and it’s not because they’re dropping to new lows. On the contrary, mortgage rates shot up well over 4 percent. Mortgage rates have been kept artificially low for a long time, and we all knew they had to go up at some point. The truth is rising mortgage rates are no big deal, and home financing is still incredibly affordable at today’s rates. So before you toss aside your dream of becoming a homeowner, just because rates aren’t the lowest they’ve been in the history of mortgage rates, remember that previous generations of homebuyers financed property at double-digit rates and did just fine. Today’s homebuyers are still poised to achieve the American Dream at a price we may never see again. As long as you’re realistic about your ability to buy and what you can afford, rising rates should have little impact on your decision to go through with a purchase. Full Article 

Homes For Sale Are Spending Less And Less Time On The Market

The median time that homes spent on the market was down to 37 days in June, from 41 days in May. This is 47% faster than a year ago. The housing market has clearly been moving fast. Redfin’s Fastest Markets Report showed that 32% of homes went under contract within two weeks, and 20% in one week or less. While this was less that 33.2% in May, this was still one of the fastest markets in years, according to Redfin. Earlier this year Business Insider reported on flash sales in parts of the country, where homes sold with 24 hours of hitting the market as supply remained tight. “The spike in mortgage rates led buyers that were already in the market for a new home to rush to lock in low rates while they could,” according to Ellen Haberle, economist at Redfin. Full Article