In 2024, new homeowners are seeing mortgage interest rates have more than doubled since 2021, making the dream of home ownership with the traditional down payment of 20% seem like a bridge that is very far.
However, there are many options and programs that don’t require 20% down. Some loan programs now allow for a much lower down payment, requiring as little as 3 percent in cash. This development significantly eases the burden for homebuyers, especially first-timers.
Understanding 3 Percent Down Mortgage Options
These low down payment mortgages are often part of special programs, typically targeting first-time homebuyers or those who haven’t owned a home in the recent past. Here’s a closer look at these options:
1. Conventional 97
• Backed By: Fannie Mae
• Key Features: Only 3% down required; down payment can be a gift, grant, or other assistance.
• Qualifications:
• Must be a first-time homebuyer or not have owned a home in the past three years.
• Homebuyer education course required for all first-time buyers.
• Minimum credit score of 620.
• The home must be a primary residence.
• Conforms to loan limits (e.g., $766,550 for a one-unit property in most areas).
• Additional Info: Requires private mortgage insurance (PMI) until 20% equity is reached.
2. Fannie Mae’s HomeReady Program
• For: A wider range of properties, including multi-family units.
• Qualifications:
• Open to those who haven’t owned a primary residence in the past three years.
• Credit score minimum of 620.
• Income cannot exceed 80% of the area’s median income.
• At least one unit must be the owner’s primary residence.
• Unique Feature: Counts rental income towards income requirements; down payment can be entirely from gifts or assistance.
3. Freddie Mac’s HomePossible Program
• Distinctive Feature: Allows non-occupying co-borrowers to contribute to the down payment.
• Qualifications:
• Homeownership education for first-time buyers.
• Credit score of 660 or above.
• Income limits apply.
• Must live in the home as a primary residence.
• Additional Info: PMI required until 20% equity is achieved.
4. HomeOne by Freddie Mac
• Target Audience: First-time homebuyers and those looking for cash-out refinances.
• Qualifications:
• At least one applicant must be a first-time homebuyer.
• Usable credit score required.
• Property must be a single-unit primary residence.
• No Restrictions: No income or geographical limitations.
Other Low-Down Payment Options
• FHA Loans: Minimum 3.5% down. Available to a broader audience, including those with lower credit scores.
• USDA and VA Loans: No down payment required, specific to rural area borrowers (USDA) and military personnel (VA).
The path to homeownership in 2024, despite the daunting landscape of high interest rates and challenging savings goals, is made smoother with these innovative low down payment mortgage options. Whether you’re a first-time homebuyer or someone looking to re-enter the housing market, these programs offer a ray of hope and an opportunity to achieve the dream of owning a home. Fill out our easy pre-qualifier on our website and we can see what program best fits your needs!

As we enter 2024, inflation is improving while home prices remain high, if you are planning on buying a home in 2024 here are 5 key steps to take to get ready.
1. Put Savings In A High-Yield Account
If you are planning on buying you will need your money to be “liquid” or relatively easy to access for a down payment.
2. Check Your Credit
You may have heard this before but it’s important, so we’ll say it again. Review your credit report to make sure there are not any errors or attempts at identity theft that can erroneously lower your credit score.
3. Down Payment or Closing Costs Assistance
It’s a good idea to check to see if you qualify for down payment or closing cost assistance or grants.
4. Monitor Your Market Real estate is local as they say so keep an eye on the areas you are looking to buy to see if there are trends in prices and inventory
5. Get Preapproved!
You can fill out our approval qualifier on our website and we’ll help you see how much you can qualify for and pre-approval, this will help you to know you’re buying range.

As we usher in the new year, we want to extend our warmest wishes to you and your family. May this year bring new happiness, new goals, new achievements, and a lot of new inspirations to your life. Remember, a new year means new beginnings, new adventures, and thankfully, new homes! We’re excited to be a part of your journey, whether you’re buying your first home, refinancing, or simply exploring your options. Happy New Year from all of us! Here’s to a prosperous and joyful 2024! 🎉

As 2023 comes to end its a good idea to do a year end financial checkup.
1. Review your budget and savings plan
Analyze your spending and saving for the year. Your savings might not have gone to plan this year and that’s ok – focus on replenishing your emergency fund first if needed and recalibrate plan for 2023 if needed.
2. Maximize Retirement Plan Contributions
If you participate in a 401k make sure you maximize contributions before the December 31 deadline, you have until April for Roth contributions
3. Review Your Insurance Coverage
Check your insurance coverage in many parts of the country housing prices went up, make sure you home is covered under current market prices. Also check your liability coverage and consider getting an umbrella liability policy that covers all your assets, you can get a million dollar policy for a few hundred dollars a year!
4. Health Savings Account
Make sure you contribute to your health savings account (if needed) as there are great tax benefits. Also check to see if you need to reimburse yourself from the account for out of pocket payments you made during the year!
5. Charitable Contributions
Finally remember to give if you can! Even if you don’t itemize your returns you can still deduct up to $300 for charitable contributions!

As 2023 comes to end its a good idea to do a year end financial checkup.
1. Review your budget and savings plan Analyze your spending and saving for the year. Your savings might not have gone to plan this year and that’s ok – focus on replenishing your emergency fund first if needed and recalibrate plan for 2023 if needed.
2. Maximize Retirement Plan Contributions If you participate in a 401k make sure you maximize contributions before the December 31 deadline, you have until April for Roth contributions
3. Review Your Insurance Coverage Check your insurance coverage in many parts of the country housing prices went up, make sure you home is covered under current market prices. Also check your liability coverage and consider getting an umbrella liability policy that covers all your assets, you can get a million dollar policy for a few hundred dollars a year!
4. Health Savings Account Make sure you contribute to your health savings account (if needed) as there are great tax benefits. Also check to see if you need to reimburse yourself from the account for out of pocket payments you made during the year!
5. Charitable Contributions Finally remember to give if you can! Even if you don’t itemize your returns you can still deduct up to $300 for charitable contributions!

A lot of homeowners that are thinking about moving have an option with their home: rent it out or sell it? What to do hinges on various factors, including one’s financial situation and local market conditions. Let’s explore the key aspects to consider, including the financial implications of both options.

Deciding Between Selling and Renting Out Your Home:
A home is often the largest financial asset for many people, making the decision of what to do with it a significant one. Selling your home offers a substantial cash windfall, while renting it provides a steady monthly income. Renting also allows you to continue building equity if property values rise. Consider your personal circumstances to determine the best choice.

When Selling is the Best Option:

Need Cash for Next Home Purchase: If buying a new home depends on the cash from selling your current one, selling is your best option. This approach allows you to apply the proceeds towards a new down payment.
Not Interested in Landlord Responsibilities: Managing a rental property requires time and effort. If you’re not prepared for the responsibilities of being a landlord, such as maintenance and tenant management, selling might be preferable.
Potential for Significant Profit: With property values increasing nationwide, selling your home could result in substantial profit. Analyze your local real estate market to gauge potential gains.
Eligibility for Capital Gains Tax Exemptions: If your home was your primary residence for at least two of the past five years, you may qualify for significant capital gains tax exemptions, making selling financially advantageous.
When Renting Out is a Better Choice:

Temporary Relocation: If you’re moving temporarily and plan to return, renting out your home can be more cost-effective than selling and later buying another property.
Desire for Rental Income: Extra income from renting can be appealing, but remember, if you’re buying another home, lenders will consider your rental income when assessing your mortgage eligibility.
High Rental Demand: If your home is in a sought-after location, renting can be a smart move. Evaluate the rental market in your area to ensure finding tenants is feasible.
Expectation of Property Value Increase: If you anticipate an increase in your home’s value in the near future, renting now and selling later could maximize your profits.
Cost Considerations in Renting vs. Selling:

Costs of Renting Out: These include mortgage payments, maintenance, finding tenants, potential vacancies, property management fees, HOA fees, and landlord insurance.
Costs of Selling: Preparing your home for sale, real estate commissions, closing fees, home staging, and paying off your mortgage are some of the expenses involved in selling.
Economic Downturn Considerations:
With potential recessions, assess your job stability and financial resilience. If you’re unsure about managing two mortgages or dealing with reduced rental income, selling might be the safer option.

Bottom Line:
Choosing between renting and selling your home requires a thorough evaluation of your financial status, lifestyle, and the local housing market. Weigh the costs of both options, consider your future plans, and your willingness to take on landlord responsibilities before making a decision. Of course schedule a free consult on our website and we can let you know how your specific situation looks when we crunch the numbers.

A VA Streamline Refinance, officially known as the Interest Rate Reduction Refinance Loan (IRRRL), is a mortgage refinancing option for eligible veterans and active-duty military personnel with existing VA home loans. The primary purpose of the VA IRRRL is to help borrowers reduce their monthly mortgage payments by refinancing at a lower interest rate.

Here’s how the VA Streamline Refinance works:

Eligibility: To qualify for a VA IRRRL, you must already have a VA home loan. Additionally, you need to meet certain eligibility criteria set by the Department of Veterans Affairs (VA).

No Appraisal or Credit Underwriting Package: One of the significant advantages of the VA IRRRL is that, in many cases, an appraisal or credit underwriting package is not required. This simplifies and expedites the refinancing process, making it more streamlined compared to a traditional refinance.

Interest Rate Reduction: The primary goal of the VA Streamline Refinance is to secure a lower interest rate than what you currently have on your existing VA loan. This reduction in interest rate helps to lower your monthly mortgage payments.

Closing Costs: The VA IRRRL allows for the inclusion of closing costs in the new loan amount. However, some lenders may offer “no-closing-cost” or “low-closing-cost” options, where the closing costs are either minimized or rolled into the loan without requiring an upfront payment.

No Cash Out: Unlike some other types of refinancing, the VA Streamline Refinance does not allow borrowers to take cash out of their home equity. It is focused solely on reducing the interest rate and monthly payments.

Simplified Documentation: The documentation requirements for a VA IRRRL are generally less stringent than those for a traditional refinance. This is part of what makes the process streamlined.

Automatic Authority: Lenders often have automatic authority from the VA to approve IRRRLs, which further accelerates the approval process.

It’s important to note that while the VA IRRRL offers various benefits, borrowers should carefully consider their individual financial situations and compare the costs and benefits of refinancing. It’s advisable to work with a knowledgeable lender who can guide you through the process and help you make an informed decision based on your specific circumstances.

For more information about this VA program call Kevin Tinsley 253-472-1500 (evenings & weekends OK) for a more detailed description of the program and how it can help lower your monthly VA mortgage payments.  

This year has seen challenges for home buyers, with higher rates and lower inventory. However as the year closes, current trends suggest a shift that could be beneficial for homebuyers. This change is primarily due to falling mortgage rates and an increase in the number of properties for sale.

Decrease in Mortgage Rates:
Freddie Mac reports that the rate for a 30-year fixed mortgage has fallen to an average of 7.03%. This is a considerable drop from its 23-year peak of just over 8% recorded in early October. Such a reduction in mortgage rates can greatly influence the affordability and appeal of buying a home.

Surge in Mortgage Applications:
In response to lower mortgage rates, Redfin has observed a 15% increase in mortgage applications since early November, which previously reached a 28-year low. This rise in applications reflects a growing interest in purchasing homes, spurred by more favorable lending conditions.

More Homes on the Market:
Additionally, there’s been a 7% increase in new home listings compared to last year, when interest rates were on the rise. This increase in available properties provides more choices for buyers and may help reduce the intense competition for homes.

Gradual Recovery of the Housing Market:
Despite these positive signs, the recovery of the housing market is progressing slowly. Freddie Mac warns that the increase in applications is beginning to slow down, indicating that while the market is improving, a full recovery is not immediate.

Impact of Federal Reserve’s Rate Increases:
The recent decline in mortgage rates is partly linked to expectations that the Federal Reserve may pause its interest rate hikes. From March 2022 to July 2023, the Fed significantly raised its benchmark rate, affecting the cost of mortgages. This has been a major factor in the sluggish movement of the housing market.

Homeowners’ Hesitance to Sell:
Elevated rates also meant that homeowners with mortgages at rates between 3% and 4% were less likely to sell, leading to fewer homes on the market. This shortage played a role in driving up home prices, adding another hurdle for new buyers.

The current changes in the housing market, characterized by lower mortgage rates and an increase in home listings, offer positive news for homebuyers. However, the market’s recovery is ongoing, and its future trajectory remains uncertain. Homebuyers should stay informed and alert to navigate these shifting market conditions.

The Federal Housing Administration (FHA) has recently made a significant announcement that will impact many homebuyers and homeowners across the United States. As we step into the calendar year 2024, the FHA has updated its loan limits for both Single Family Title II forward and Home Equity Conversion Mortgage (HECM) insurance programs. This change, driven by the persistent rise in home prices throughout 2023, brings new opportunities and considerations for borrowers.

Reflecting on the Housing Market Trends

Julia Gordon, the Assistant Secretary for Housing and Federal Housing Commissioner, highlighted the changes as a response to the continuous upsurge in home prices witnessed nationwide in 2023. With affordability becoming a growing concern, these increased loan limits aim to make FHA’s low-down-payment financing more accessible, ensuring that well-qualified borrowers can still enter the market.

Understanding the New Loan Limits

The FHA adheres to a formula prescribed in the National Housing Act for setting annual loan limits. This involves analyzing county or Metropolitan Statistical Area (MSA) home sale data to adjust loan limits across different cost categories. For 2024, the loan limits are as follows:

One-Unit Properties: The low-cost area “floor” is set at $498,257, with the high-cost area “ceiling” at $1,149,825. For Alaska, Hawaii, Guam, and the U.S. Virgin Islands, the ceiling is $1,724,725.
Two-Unit Properties: Limits range from $637,950 in low-cost areas to $1,472,250 in high-cost areas, and up to $2,208,375 in the special exception areas.
Three-Unit Properties: These start at $771,125 and go up to $1,779,525 and $2,669,275 in high-cost and special exception areas, respectively.
Four-Unit Properties: The limits are set at $958,350 for low-cost areas, $2,211,600 for high-cost areas, and $3,317,400 for the special exception areas.
These adjustments, particularly for the special exception areas, account for the higher costs of construction in regions like Alaska, Hawaii, Guam, and the U.S. Virgin Islands. The changes will be effective for FHA case numbers assigned on or after January 1, 2024.

HECM Loan Limits on the Rise

The HECM maximum claim amount is also seeing an increase. From $1,089,300 in 2023, it will rise to $1,149,825 in 2024, applicable to all areas including the special exception regions.

The Calculation Process

The process of setting these limits is detailed and follows specific guidelines. The FHA sets Single Family forward mortgage loan limits at 115 percent of area median house prices, subject to established floor and ceiling limits. These are based on the national conforming loan limit set by the Federal Housing Finance Agency (FHFA) for conventional mortgages.

For 2024, the national conforming loan limit for a one-unit property is $766,550. The FHA’s minimum national loan limit floor for a one-unit property is 65 percent of this, equating to $498,257. High-cost areas are those where the loan limit exceeds this floor, and the maximum loan limit ceiling for such areas is $1,149,825.

Accessing Detailed Information

For those seeking more information or a complete list of FHA loan limits, including areas at the FHA ceiling and between the floor and ceiling, the FHA’s Loan Limits Page offers comprehensive details.

As we navigate through these changes, it’s essential for borrowers, real estate professionals, and lenders to stay informed and understand how these new limits might influence their decisions and opportunities in the housing market. The FHA’s adjustments for 2024 are a clear response to the dynamic housing market and aim to support sustainable homeownership in a diverse range of economic environments. If you want to see what you can qualify for in the coming year please fill our our quick mortgage analysis on our website!

VA Interest Rates Hit a 2-Month Low in Washington State

In the ever-shifting landscape of the financial world, news of interest rates hitting a two-month low has sparked both attention and speculation. Whether you’re a seasoned investor, a potential homebuyer, or simply someone with an eye on economic trends, the implications of this development are worth exploring. In this blog post, we’ll delve into the reasons behind the recent dip in interest rates and how it might impact various aspects of the economy.

The Current Landscape:
As interest rates take a dip, it’s crucial to understand the current economic climate. Various factors contribute to fluctuations in interest rates, including inflation, employment rates, and central bank policies. A two-month low suggests that prevailing economic conditions are influencing lenders to offer more favorable rates to borrowers.

Impact on Borrowers:
Lower interest rates typically translate to reduced borrowing costs for individuals and businesses. This could be particularly beneficial for those looking to secure loans for homes, cars, or investments. Homebuyers, in particular, might find this period opportune for locking in a mortgage at a more affordable rate, potentially saving thousands of dollars over the life of the loan.

Investment Considerations:
Investors, too, must pay attention to interest rate movements. Fixed-income investments like bonds often see increased demand when interest rates fall, as existing bonds with higher rates become more attractive. Conversely, stock markets may experience increased activity as lower interest rates can stimulate economic growth and corporate profitability.

Real Estate Opportunities:
The real estate market is particularly sensitive to interest rate fluctuations. With rates at a two-month low, prospective homebuyers may find themselves in a favorable position. However, the increased demand for real estate could lead to a more competitive market, potentially driving property prices higher.

Central Bank Policies:
Understanding the role of central banks in influencing interest rates is key. Central banks, such as the Federal Reserve, play a pivotal role in setting monetary policy to achieve economic stability. Monitoring their statements and actions can provide valuable insights into the direction interest rates may take in the coming months.

Conclusion:

In a financial landscape where change is the only constant, the recent dip in interest rates offers a unique set of opportunities and considerations. Whether you’re a borrower, investor, or someone closely watching economic trends, staying informed and adapting to the evolving financial climate is essential. As interest rates hit a two-month low, now is the time to assess your financial goals, explore potential opportunities, and make informed decisions that align with your long-term objectives.