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Dont Get Caught In The Renters Trap
In a recent press release, Zillow stated that the affordability of the nation’s rental inventory is currently much worse than affordability of the country’s home sale inventory. The release revealed two things:
- Nationally, renters signing a lease at the end of the second quarter paid 29.5% of their income to rent
- U.S. home buyers at the end of the second quarter could expect to pay 15.3% of their incomes to a mortgage on the typical home
Don’t Become TrappedIf you are currently renting you could get caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment. ZillowChief Economist Dr. Stan Humphries explains:
"The affordability of for-sale homes remains strong, which is encouraging for those buyers that can save for a down payment and capitalize on low mortgage interest rates… As rents keep rising, along with interest rates and home values, saving for a down payment and attaining homeownership becomes that much more difficult for millions of current renters.”
Know Your OptionsPerhaps you already have saved enough to buy your first home. HousingWire recently reported that analysts at Nomura believe:
“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)Freddie Mac came out with comments on this exact issue:
- A person “can get a conforming, conventional mortgage with a down payment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets)”.
- Freddie Mac's purchase of mortgages with down payments under 10 percent more than quadrupled between 2009 and 2013.
- More than one in five borrowers who took out conforming, conventional mortgages in 2014 put down 10 percent or less.
Bottom LineDon’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.
Jason has been a real estate broker since 2005 and has continued to sharpen his skills to become one of the most outstanding agents in Portland. Working with Jason you will find that he is an excelle....
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