Thinking about becoming a home owner? By all accounts first-time home buyers are in for a great year in 2020! According to new analysis and home ownership survey by credit bureau, TransUnion, “up to 9.2 million first-time home buyers will hit the market between 2020 and 2022.” This is an increase from previous years. From 2013 to 2015 there were 6.67 million first-time home buyers and from 2016 to 2018 there were 7.64 million reported first-time home buyers. With over 2 million first-time home buyers expected to begin this year, it’s going to make for a very competitive real estate market heading toward spring 2020.
TransUnion Senior Vice President, Joe Mellman, says “the next couple of years should mark a turn-around for home buyers. While we’ve recently seen a boom in refinancing activity, actual home ownership rates are down. Challenges have included high home prices, sluggish wage growth, and limited housing inventory, but we may be starting to see daylight as slowing home price appreciation, low unemployment, increased wage growth, and low interest rates are helping affordability. As a result, we are optimistic that first-time home buyers will contribute more to home ownership than at any time since the start of the Great Recession.”
As this exciting news is released, it comes on the heels of a brand-new year with loads of possibilities! The following are our top 3 tips for purchasing your first home in 2020
Becoming a Home Owner in 2020:
Start saving for a home down payment
If you’re becoming a home owner, consider this: many first-time home buyers use between 15% and 20% as a down payment to purchase a home. However, lenders today offer a variety of mortgage programs for first-time home buyers that allow little to no down payment to qualify for a mortgage. On the flip side, it’s important to note that putting down less than 20% may mean higher costs and paying for private mortgage insurance (PMI), and even a small down payment can still require the use of PMI. Some tips for saving for a down payment include setting aside tax refunds and work bonuses, setting up an automatic savings plan and using an app to track your progress.
At Noonan Lombardi Realtors we work closely with a group of trusted and experienced mortgage lenders who we are familiar with and recommend to many of our clients, such as Byron Kirk with South Wind Financial, INC. and Justin Conrad of Northpointe Bank in Rhode Island.
Becoming a Home Owner in 2020:
Explore your down payment and mortgage options
We cannot express this enough: there are many options out there for a home mortgage. Each program offers a combination of pros and cons, which are suitable for the majority of people seeking a mortgage loan. That said, only you know what will work financially for you. Here are some loan types to review that may work for your home buying situation:
- Conventional mortgages: These conform to standards set by government-sponsored entities, such as Fannie Mae and Freddie Mac, and require as little as 3% down. Learn more now.
- FHA loans: FHA Loans are insured by the Federal Housing Administration and permit down payments as low as 3.5%. Learn more now.
- VA loans: VA Loans are guaranteed by the Department of Veterans Affairs and sometimes require no down payment at all. That’s 100% financing! Learn more now.
First-time Home Buyers should consider that putting a higher down payment on a mortgage loan will mean having a lower monthly mortgage payment, which can be considerable depending upon the amount of money offered as a down payment. In addition to federal first-time home buyer programs, many states offer assistance programs for first-time home buyers with perks, such as down payment assistance, closing cost assistance, tax credits and discounted interest rates. Your county or municipality may also have first-time home buyer programs. What’s the best way to find out? Go to the municipality website or visit the town office/tax assessors office for the town you are considering purchasing a home in.
Becoming a Home Owner in 2020:
Be aware of property tax rates in your new town or city
As a first-time home buyer is it easy to forget everything involved with purchasing a home. One major financial detail is reviewing the tax rates for your new home’s city or town. In the end, when you choose to purchase a home, the tax rate for that city or town will be added to your mortgage payment each month. The higher the taxes, the higher your mortgage will be, in addition to any PMI and any other points or fees associated to your mortgage loan. Our best advice? Look for areas that are still developing offering lower tax brackets, which will allow you room to grow without incurring excessive property tax payments from the start.
Home Ownership in RI:
Meet Noonan Lombardi Realtors
The Noonan Lombardi Realtors team is transforming the way consumers make home-related decisions and connect with professionals across Southern New England. Based on this team’s wealth of experience in the real estate markets across Rhode Island, Massachusetts and Connecticut, this team feels confident you will be pleasantly pleased with the real estate services they provide, as they continually strive to meet each client’s specific needs, every single time.
In addition, Noonan Lombardi Realtors operates one of the most successful real estate teams for real estate home sales, property management and rentals in Rhode Island, Connecticut and Massachusetts. Our advertising and social media presence are second to none, giving each client the backing of exceptionally planned marketing and experienced realtors waiting to work with you.
Using top-of-line resources to make all your property dreams come true, Noonan Lombardi Realtors are centrally located at Remax Properties, Noonan Lombardi and Associates 696 Douglas Pike, Smithfield, RI 02917. Phone: (401) 580-8672
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