The MYTH of 20% Downpayments

Many potential home buyers give up before they’ve even gotten started because they think they don’t have enough for a down payment. Oftentimes it’s because they’ve bought into the myth that you can’t buy a home with less than a 20% down payment. Many people think you must use an FHA loan for a low down payment too. NOT true! In fact, with a conventional loan, you can go as low as 3%! That’s lower than FHA’s 3.5% minimum. Plus, VA loans and USDA loans are as low as ZERO percent! Woohoo! Check out these myth-busters in this infographic (click the link to make it larger; may need to click it twice), and CALL, EMAIL, or TEXT me about purchasing a home now.

DAISY CASILLAS
1% Real Estate Broker
(206) 866-8090 call or text
ListingsFor1.com

1% listings. Just 1.5% total if I represent your buyer too.

Two Things You Need to Know About Mortgage Interest Rates

Number 1 – There are 7 factors that determine your rate. According to the Consumer Financial Protection Bureau, your credit score, home location, home price, loan amount, down payment, rate type, and loan term and type can all affect your rate.

Number 2 – Your interest rate and annual percentage rate (APR) are different. Both are expressed as a percentage, but your interest rate is the cost you pay each year to borrow money. An APR is a broader measure that includes your interest rate, points (if applicable), and other charges you may pay to get a loan. It’s what allows you to compare one lender’s offer to another.

CLICK HERE TO LEARN MORE ABOUT MORTGAGE LENDERS.

Pay YOURSELF Rent

Are you a first-time home buyer afraid to take the leap? You continue to pay rent – money that never comes back to you when you move. Goodbye money 💸!

You DO pay a mortgage though – your landlord’s mortgage! AND you pay for the repairs too. People who buy real estate to rent take into account mortgage and repair/maintenance costs and calculate that into their rental rates before they even buy an investment property.

With interest rates super low right now, it IS a good time to buy. Take this house (pictured above) I sold in 2015. It was a cosmetic fixer purchased by first-time buyers in Seattle for just under $280,000. It’s now worth over $500,000. That’s about $44,000 per year of appreciation! That’s REAL MONEY when they’re ready to sell – money they didn’t have to sweat for at a job. When they sell, all that rent they paid themselves will be returned to them WITH appreciation. 💰💰💰 Although they pay interest, the appreciation FAR outpaces the interest and they will walk away with a major profit. Contact me about buying your own home!

Outlook for Interest Rates

A recent economist I respect said we should expect deflation over the next two years with inflation at the 3-5 year mark. Of course, no one has a crystal ball! These are assumptions based on what’s happening today and many things can happen to impact and change this assumption. Over the next one to two years, we believe that deflation is probably more of a risk than inflation. We expect that the recovery from the coronavirus downturn is likely to be slow, keeping inflation and interest rates low. As the economy mends, the Fed will gradually unwind some of its emergency lending. As loans get repaid, the Fed will let some of its holdings roll off its balance sheet, and start lifting interest rates—perhaps two or three years from now. We expect the Fed to keep the federal funds rate pegged near zero for at least two years, and 10-year Treasury yields to remain under 1% in 2020 and under 2% in 2021. Let’s remain positive and rooting for our communities and nation!

Coronavirus not slowing down Seattle region’s supercharged housing market

Reprinted from Puget Sound Business Journal

Home buyers hoping the coronavirus pandemic will cool off the Puget Sound region’s red-hot housing market are out of luck.

Sale prices of lower cost and mid-range homes remain torrid, with multiple offers common. The virus has, however, altered the way sellers handle open houses, nationally but especially in Washington state, the nation’s COVID-19 epicenter.

Nearly a quarter of U.S. sellers are changing how their homes are viewed, according to a new National Association of Realtors survey of its members. The percentage of sellers stopping open houses or requiring potential buyers to wash their hands and take other precautionary steps climbs to 44 percent in the Evergreen State.

In the Seattle area, some sellers no longer want to host open houses and have their brokers screen potential buyers for by-appointment showings. This ensures they’re dealing with either all-cash buyers or ones who have pre-qualified for mortgages.

Some companies are urging brokers to work with buyers and sellers to implement virtual-tour viewing

“Just like every other industry, things are changing so quickly, but right now our market is more on fire than I’ve ever seen it,” said one WA real estate broker, who has worked 15 years in real estate. Especially hot is the sector of the market with homes listed for $800,000 or less, she said. She has one such listing in Kent. “By last night it had 20 showings,” she said. “People are begging me to take an offer.”

One of her buyers looked for a condominium in Bellevue last weekend, and she said it “was a race against the clock to see condos before they went pending.” Some units are going pending as fast as 12 hours.

One area of weakness is homes priced at $1.2 million or more.

“Things have slowed slightly because I think many of those buyers are more reliant on the stock market” when the S&P plummeted 9.5 percent, the worst slide in 33 years.

The market continues to not have enough inventory, Northwest Multiple Listing Service data shows. Across the four counties in the Seattle metro, the number of single-family homes for sale fell 39 percent last month compared to February 2019, while the pace of closed sales was about the same.

“This is rapidly evolving, but so far, we have seen a continuation of the robust spring market and have seen little effect on how quickly a home sells,” Scott said. He added the market will know more in the coming weeks how the virus will affect the industry.

Also fueling the market are record low mortgage rates. According to Mortgage News Daily, a 30-year fixed loan is 3.5 percent.

Last week, one homeowner we spoke with refinanced and got a 3.1 percent rate on a 30-year fixed. On Wednesday, the rate on a 15-year mortgage was 2.5 percent.

Windermere Real Estate Chief Economist Matthew Gardner said this is making some buyers conflicted. They might want to hold off on a home purchase in light of the uncertainty caused by the virus, but they don’t feel they can do so because of the low mortgage rates.

“Every situation is different, but talking to our brokers, they’re saying they’re getting offers left, right and center,” said Gardner, who added the market “is tight and getting tighter.”