Tami Savage, Realtor

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Financial Fundamentals for Homebuyers [INFOGRAPHIC]

January 22, 2021 By Tami Savage

Financial Fundamentals for Homebuyers. Thinking of buying a home? Here are some mission-critical steps to take before you begin your search. SAVE FOR YOUR DOWN PAYMENT. Contrary to common belief, your down payment could be substantially less than 20%. Start Saving now - you might be closer than you think! To-do list item: Automate your checking account to pull a portion of your paycheck into a separate house fund. BUILD YOUR CREDIT. Your credit score is one element that helps determine which home loan you'll qualify for in the application process. It also impacts your mortgage interst rate, so a higher score could lead to a lower monthly payment. To-do list item: Stay on top of your loans and make sure to pay your credit card bills on time. CONNECT WITH A TRUSTED AGENT. Real estate professionals help you make strong decisions throughout the homebuying process. They know the market and can guide you toward a sound investment. To-do list item: Let's connect to get your homebuying process started today. GET PRE-APPROVED. A pre-approval letter lets you know how much money you can borrow and helps you determine how much home you can afford. It also shows sellers you're a serious buyer. To-do list item: Contact a loan officer. Your real estate agent should be able to provide a trusted referral.

Some Highlights

  • When you’re thinking about buying a home, there are a few key steps to take before you even start to look at houses.
  • From saving for your down payment to getting pre-approved for a mortgage, you’ll want to make sure you keep your financial plan on track from the beginning.
  • Let’s connect today to make sure you have an introduction to a trusted lender and the best possible real estate guidance as you begin your homebuying process.

Tagged With: Buying Myths, Down Payments, First Time Home Buyers, For Buyers, Infographics

How to Make the Dream of Homeownership a Reality This Year

January 18, 2021 By Tami Savage

How to Make the Dream of Homeownership a Reality This Year

In 1963, Martin Luther King, Jr. inspired a powerful movement with his famous “I Have a Dream” speech. Through his passion and determination, he sparked interest, ambition, and courage in his audience. Today, reflecting on his message encourages many of us to think about our own dreams, goals, beliefs, and aspirations. For many Americans, one of those common goals is owning a home: a piece of land, a roof over our heads, and a place where we can grow and flourish.

If you’re dreaming of buying a home this year, start by connecting with a local real estate professional to understand what goes into the process. With a trusted advisor at your side, you can then begin to answer the questions below to set yourself up for homebuying success.

1. How Can I Better Understand the Process, and How Much Can I Afford?

The process of buying a home is not one to enter into lightly. You need to decide on key things like how long you plan on living in an area, school districts you prefer, what kind of commute works for you, and how much you can afford to spend.

Keep in mind, before you start the process to purchase a home, you’ll also need to apply for a mortgage. Lenders will evaluate several factors connected to your financial track record, one of which is your credit history. They’ll want to see how well you’ve been able to minimize past debts, so make sure you’ve been paying your student loans, credit cards, and car loans on time. If your financial situation has changed recently, be sure to discuss that with your lender as well. Most agents have loan officers they trust and will provide referrals for you.

According to ConsumerReports.org:

“Financial planners recommend limiting the amount you spend on housing to 25 percent of your monthly budget.”

2. How Much Do I Need for a Down Payment?

In addition to knowing how much you can afford on a monthly mortgage payment, understanding how much you’ll need for a down payment is another critical step. Thankfully, there are many different options and resources in the market to potentially reduce the amount you may think you need to put down.

If you’re concerned about saving for a down payment, start small and be consistent. A little bit each month goes a long way. Jumpstart your savings by automatically adding a portion of your monthly paycheck into a separate savings account or house fund. AmericaSaves.org says:

“Over time, these automatic deposits add up. For example, $50 a month accumulates to $600 a year and $3,000 after five years, plus interest that has compounded.”

Before you know it, you’ll have enough for a down payment if you’re disciplined and thoughtful about your process.

3. Saving Takes Time: Practice Living on a Budget

As tempting as it is to pass the extra time you may be spending at home these days with a little retail therapy, putting that extra money toward your down payment will help accelerate your path to homeownership. It’s the little things that count, so start trying to live on a slightly tighter budget if you aren’t doing so already. A budget will allow you to save more for your down payment and help you pay down other debts to improve your credit score.

A survey of millennial spending shows, “68% reported that shelter in place orders helped them save for their down payment.” Danielle Hale, Chief Economist at realtor.com, also notes:

“If there is any silver lining to the current economic landscape, it’s that mortgage rates are hanging around record lows…Additionally, shelter-in-place orders helped many who were fortunate enough to keep their jobs save for a down payment — one of the largest hurdles of buying a home. The combination of low rates and the opportunity to save is enabling many millennials to move up their home buying timeline.”

While you don’t need to cut all of the extras out of your current lifestyle, making smarter choices and limiting your spending in areas where you can slim down will make a big difference.

Bottom Line

If homeownership is on your dream list this year, take a good look at what you can prioritize to help you get there. To determine the steps you should take to start the process, let’s connect today.

Tagged With: Down Payments, First Time Home Buyers, For Buyers, Move-Up Buyers, Rent vs Buy

Homeowner Equity Increases an Astonishing $1 Trillion

December 17, 2020 By Tami Savage

Homeowner Equity Increases an Astonishing $1 Trillion

In a year that was financially devastating for many Americans, some good news for most homeowners is the dramatic gain in home equity over the last twelve months. Last week, CoreLogic released its 2020 3rd Quarter Homeowner Equity Insights report, which reveals four major findings:

  1. U.S. homeowners with mortgages have seen their equity increase by a total of $1 trillion since the third quarter of 2019.
  2. The average homeowner gained approximately $17,000 in equity over the past year.
  3. This is a 10.8% increase in equity over last year.
  4. The average household with a mortgage now has $194,000 in home equity.

This has given many homeowners the ability to redesign their homes to meet their changing needs. Frank Martell, President and CEO of CoreLogic, explains in the report:

“The housing market has remained a strong pillar in an otherwise tumultuous economic year. A sharp rise in demand, spurred by record-low interest rates, continues to bolster homeowner equity. And with many people now spending more time than ever before at home, some homeowners have tapped into their strengthening equity to fund renovations.”

This build-up in equity also gives more options to homeowners who have been financially impacted by the pandemic. Today, homeowners with substantial equity are in a much better position to work out a deal with their lender if they cannot pay their mortgage. Alternatively, they also have the power to sell and walk away with their equity in the form of cash or as a down payment toward a more affordable house. Frank Nothaft, Chief Economist for CoreLogic, addresses the issue in the report:

“Over the past year, strong home price growth has created a record level of home equity for homeowners…This provides an important buffer to protect families if they experience financial difficulties and is one reason for the generational-low in foreclosure rates reported.”

Here’s a map showing equity gains by state:

Year over year Homeowner Equity Gains.  United States $17,000, Florida Equity Gain $14,000. Source: CoreLogic.

This gain in home equity is a blessing for homeowners in these trying times, and it seems that the next two years will continue to reward those who own a home.

Last week, the National Association of Realtors (NAR) held their 2020 Real Estate Forecast Summit. At the summit, they shared the results of a recent survey of 23 economic and housing market experts. The median forecast among the experts called for home values to increase further by 8% in 2021 and 5.5% in 2022.

Bottom Line

In a year that has many of us reevaluating what “home” really means, those who own their homes have been rewarded with a financial windfall that averages $17,000 individually and totals $1 trillion nationally.

Tagged With: Down Payments, For Buyers, For Sellers, Housing Market Updates, Move-Up Buyers, Pricing

The Path to Homeownership [INFOGRAPHIC]

December 4, 2020 By Tami Savage

The path to homeownership. (1) Save for your down payment. Create a budget and do your research. There are lots of low down payment options available.  (2) Know your credit score. Learn your score and clean up outstanding debts like student loans and credit cards. (3) Find a real estate agent. Contact a local professional to guide you through the process. (4) Get pre-approved. Differentiate yourself as a serious buyer and have a better sense of what you can afford. (5) Find a home. Work with your agent to find a home in your budget that meets our needs. (6) Make an offer. Determine your price and negotiate the contract. (7) Have a home inspection. Address any hidden issues in the home with the seller. (8) Get a home appraisal. Ensure the property is worth the price you are prepared to pay. (9) Close the sale. Schedule a closing date once the loan is approved so you can sign the final paperwork. (10) Move in. Congrats! You're a homeowner. Contact Tami Savage 727-282-4390.

Some Highlights

  • If you’re thinking of buying a home and not sure where to start, you’re not alone.
  • Here’s a map with 10 simple steps to follow in the homebuying process.
  • Let’s connect today to discuss the specific steps along the way in our local area.

Tagged With: Down Payments, First Time Home Buyers, For Buyers, Infographics

Knowledge Is Power on the Path to Homeownership

December 1, 2020 By Tami Savage

Knowledge Is Power on the Path to Homeownership

Homeownership is on the goal list for many young adults, but sometimes it’s hard to know exactly how to get there. From understanding the homebuying process to pre-approval and down payment assistance options, uncertainty along the way can ultimately hold some buyers back.

Today, there are over 75 million Millennials and 67 million Gen Z’ers in the U.S., making up a significant number of both current and soon-to-be homebuyers. According to a recent Fannie Mae survey of more than 2,000 of these individuals:

“88% said they are confident they will achieve homeownership someday.”

In addition, the survey also reveals that for younger generations, the motivation to own a home may be more emotional than financial compared to previous generations:

  • <50% say they want to use their home as an asset
  • 78% believe it’s the best way to live the way they want, without restrictions
  • 80% believe homeownership is the best way to make it on their own

Whether homeownership goals come from the heart or are driven by financial aspirations (or maybe both), the obstacles standing in the way don’t have to bring these dreams to a screeching halt. The same survey also reveals two key roadblocks for potential buyers. Thankfully, they’re both easily overcome with the power of knowledge and trusted advisors leading the way. Here’s a look at these two challenges potential homebuyers face today:

1. 73% of future homebuyers are unaware of low-down-payment mortgage options

For those who want to purchase a home, low-down-payment options are instrumental to affording one sooner rather than later, especially given the amount of debt many younger adults have accumulated. Fannie Mae also notes:

“Among the challenges they face is an unprecedented amount of debt, along with a lack of understanding of the mortgage process and their own purchasing power. Debt, in particular, creates many obstacles such as a limited ability to save and the fear of taking on more debt.”

Today, there are more than 2,340 down payment assistance programs available nationwide to help relieve this pressure. Understanding what’s out there and the options available may help many buyers become homeowners faster than they thought possible. In a year like this, with record-low mortgage rates making their mark in the history books, being able to take advantage of the opportunity buyers have right now is essential to long-term affordability.

2. 64% of buyers expect lenders and other real estate professionals to educate them about the mortgage process

While many people love to do a quick search online to find instant answers to their questions, it isn’t the only way younger generations want to consume information or build their knowledge base. As the survey mentions, having trusted professionals help them learn what it takes to achieve their dreams is definitely on their wish list too.

Bottom Line

If you’re aiming for homeownership someday, it may be in closer reach than you think. Let’s connect so you can learn about the process and get the guidance you need to make it happen.

Tagged With: Buying Myths, Demographics, Down Payments, First Time Home Buyers, For Buyers, Gen Z, Generation Z, Interest Rates, Millennials

Key Terms to Know in the Homebuying Process [INFOGRAPHIC]

November 27, 2020 By Tami Savage

Key Terms to Know in the Homebuying Process. Here's a list of some of the most common terms in the homebuying process. Appraisal = A professional analysis used to estimate the value of a home.  A necessary step in validating a home's worth to you and your lender as you secure financing.  Closing costs = The fees required to complete the real estate transaction.  Paid at closing, they include points, taxes, title insurance, financing costs, and items that must be prepaid or escrowed.  Ask your lender for a complete list of closing cost items.  Credit score = A number ranging from 300 to 850 that’s based on an analysis of your credit history.  Helps lenders determine the likelihood you’ll repay future debts.  Down payment = Down payments are typically 3 to 20% of the purchase price of the home.  Some 0% down programs are also available.  Ask your lender for more information.  Mortgage rate = The interest rate you pay to borrow money when buying a home.  The lower the rate, the better.  Pre-approval letter = A letter from a lender indicating you qualify for a mortgage of a specific amount.  This is a critical step in today’s competitive market.  Real estate professional = An individual who provides services in buying and selling homes.  Real estate professionals are there to help you through the confusing paperwork, find your dream home, negotiate any of the details that come up, and so you know exactly what’s going on in the housing market.  The best way to ensure your homebuying process is a confident one is to find a real estate pro who will guide you through every aspect of the transaction with ‘the heart of a teacher’ by putting your needs first.  Source:  Freddie Mac

Some Highlights

  • Buying a home can be intimidating if you’re not familiar with the terms used throughout the process.
  • To point you in the right direction, here’s a list of some of the most common language you’ll hear along the way.
  • The best way to ensure your homebuying process is a positive one is to find a real estate professional who will guide you through every aspect of the transaction with ‘the heart of a teacher’ by putting your needs first.

Tagged With: Down Payments, First Time Home Buyers, For Buyers, Infographics, Interest Rates, Move-Up Buyers

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DISCLAIMER: The information contained, and the opinions expressed, on this site are NOT intended to be construed as investment advice. Tami Savage LLC does NOT guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should ALWAYS conduct your own research and due diligence and obtain professional advice before making any investment decision. Tami Savage LLC will NOT be liable for any loss or damage caused by your reliance on the information or opinions contained herein.