Who doesn’t love fun facts? We do, here at Young Team Realtors. We rounded up 10 real estate facts that are sure to entertain your brain. So read on to learn some interesting facts about real estate.
#4 Mark Zuckerberg purchased four houses next to his home in Palo Alto and leased them back to the families that lived there. He did it to avoid the houses from being marketed as “next door to Mark Zuckerberg.”
#8 In 1945, a B-25 bomber pilot crashed into The Empire State Building. The impact snapped the cable of the building’s elevator shaft. By the time the carriage reached the bottom, a thousand feet of cable had piled up beneath it, acting like a spring, which allowed the lone occupant in the car to escape injured, but alive.
#9 In a competition to build the world’s tallest building, the architect of the Chrysler Building secretly built it with a 125 ft long spire inside. When his competitor’s building was completed, the spire was pushed up through the building, making it taller by 119 feet.
What did you think? Which fact was the most interesting to you? Let us know on our Instagram, Twitter and Facebook posts of this blog! If you have any interesting real estate facts of your own, leave them in the comments!
HOW DO DOWN PAYMENTS WORK? FIND OUT HOW MUCH MONEY YOU NEED TO PUT DOWN FOR A HOME
Whether you’re a first time homebuyer or exploring different financing options for your next home, you may have heard a lot of conflicting information about the size of a down payment when buying a house.
Most people looking to buy a home choose to finance their purchase through by getting a mortgage, rather than paying cash for a home. Generally, lenders like to see good income, low debt, strong credit, and of course, enough money for a down payment. A down payment is defined by the amount of cash that is your initial equity in the home.
If you’re thinking about buying a home, you have probably started saving up in anticipation for the down payment. But how much do you really need for a down payment? Generally, mortgage lenders like to see a 20% down payment, but do you really need that much?
A STANDARD 20% DOWN PAYMENT FOR A HOME
Ideally, putting 20 percent down is what you want to strive for as a homebuyer. If you are able to put this much down, you have a better chance of getting approved for a loan, most lenders won’t require you to take out a private mortgage insurance (PMI), and you’re more likely to be offered lower interest rates on your mortgage.
These advantages stem from your substantial stake in the home, meaning there’s less probability to default on your mortgage. There are all sorts of other benefits from putting 20 percent down such as:
- Lower upfront fees
- Lower ongoing fees
- More equity in your home right off the bat
- A lower monthly payment
The down payment is not the only upfront money you have to deal with. There are other monetary factors that come into play to consider as well. Explore below for some lower down payment options.
PROGRAMS THAT HELP YOU BUY A HOME WITH LESS THAN A 20% DOWN PAYMENT
Saving up 20 percent for a down payment can be a lot to ask for, even in the current economic upswing. If you’re looking to buy a $100,000 dollar house, that’s $20,000 you will need in savings. With stagnant wages, as well as rising rent and home prices achieving this can be extremely difficult. First time homebuyers may have more of a struggle affording a home because they’re younger, earn less, and have excessive amounts of student loan debt.
One commonly used loan programs is the option FHA option, which is one of the most popular financing options in the U.S.. It insures mortgages for homebuyers with lower credit scores, higher debt-to-income ratios, or less money for a down payment. FHA loans are insured by Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), a federal government agency.
The minimum down payment for an FHA loan is just 3.5 percent of the home’s purchase price. That means the down payment for, say, a $350,000 home would be just $12,250 with this type of loan. Your credit score should be 580 or higher, and your debt-to-income ratio can creep up to 56% or so. If your numbers look a little different, for example, your credit score is below 580, it’s still worth looking into the possibility of getting an FHA-backed loan.
VA AND USDA LOANS
VA loans, guaranteed by the U.S. Department of Veterans Affairs (VA), and USDA loans, backed by the U.S. Department of Agriculture, don’t require a down payment, which means buyers can purchase a home with very little cash upfront. The VA loan is open to most active-duty military personnel and U.S. military veterans, among other groups. The USDA loan is available in rural and outlying suburban areas.
A conventional mortgage loan is one that’s not backed by the government. This makes it distinct from FHA loans, VA loans, and other forms of government-insured mortgages. With a down payment of at least 5 percent, ranging to 20 percent, you can often qualify for a conventional mortgage loan, as long as you have adequate income, a reasonable debt-to-income ratio, and a credit score that exceeds the lender’s required minimum, typically between 660 and 700.
With this loan, you’ll still be offered a decent interest rate for this type of mortgage, but you’ll just have to pay a private mortgage insurance (PMI). This insurance protects the lender in case of a loan default. A PMI typically costs between 0.5% and 1.0% of the borrowed amount.
FANNIE MAE HOMEREADY LOANS
Another new option recently introduced by Fannie Mae is the HomeReady program and allows a down payment of just 3% and says the income of non-borrowing household members, as well as rental income, can be used to determine the debt-to-income ratio. This option is available for home purchases in specific low-income census tracts and other designated areas.
The bottom line is most people actually don’t choose to make a big down payment to buy a home because there are other options available. Some people can pay as little as 5% or some don’t need any down payment at all.
The only way to find out for sure is to talk to a lender. Most people don’t think they could qualify to obtain a loan, but you would be surprised with your options.
Do you have an eye on your next home?
This mortgage calculator can be used to figure out monthly payments of a home mortgage loan, based on the home’s sale price, the term of the loan desired, buyer’s down payment percentage, and the loan’s interest rate. This calculator factors in PMI (Private Mortgage Insurance) for loans where less than 20% is put as a down payment. Also taken into consideration are the town property taxes, and their effect on the total monthly mortgage payment.
When you use The Young Team’s Guaranteed Sale program to sell your home, you can rest assured that when you see another home you fall in love with, you can confidently make an offer knowing that your home is sold!
STEPS TO GET YOUR HOME SOLD
STEP 1: EXPERT EVALUATION