Archive for January 22, 2013

FHA vs Conventional Financing


What’s the difference between FHA and Conventional financing?  Both can be a good fit for first time home buyers, but can vary a bit.  FHA tends to be looser on borrower guidelines, but a bit stricter in regards to the property.  Conventional tends to be the opposite, with typically looser property guidelines and stricter borrower guidelines.

Does either have mortgage insurance?  Both can have mortgage insurance.  FHA mortgage insurance tends to be a bit higher than Conventional and is put in place regardless of the down payment amount.  Conventional mortgage insurance tends to be less expensive, has more flexibility depending on down payment amount, and completely goes away with a down payment of 20% or more.

What are their minimum down payments?  FHA’s minimum down payment is 3.5%, and Conventional’s is 3%.  Because of their low minimums, either may be a good fit for first time home buyers.  However, if you can’t afford either of these down payment amounts, we do offer down payment assistance programs for qualified first time home buyers.

Don’t make the biggest decision of your life without getting educated first!  If you’d like more information on these loan programs or our down payment assistance programs, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.


King County Home Prices Up 20% YOY!


King County home prices are up 20% year-over-year!  The Seattle PI stated a couple different reasons as to why this could be.  The first being that due to an incredibly low level of available housing, many first time home buyers are getting caught in bidding wars.  The second being that as continued reports surface about a recovering economy, people become more confident in buying more expensive housing.

Are those the only reasons prices are up?  Another reason prices are probably rebounding so quickly is because they fell so far.  In mid-2011, many home prices we’re so low that you could buy a home with barely any down payment and still pay less per month to own than you would pay to rent the same place.  Many renters/first time home buyers (and investors) saw this opportunity as a no brainer, causing a huge flood of new buyers into the market, leading to increasing prices.

Regardless of the reason, prices are still up drastically!  You can debate the reasons behind these increases to no avail.  But the reality is as prices rise, consumer confidence rises, causing more people to jump into the market, causing prices to rise.  It will continue to build on itself, and hopefully this time around now that prices are a bit more realistic, the prices will rise at a more sustainable level (5-7%/yr) moving forward.

Did I miss the boat?  If you’re a first time home buyer, it’s not too late to get a great deal.  You just need to know what you’re up against so you can properly navigate the landscape with confidence.  Staying informed will help you make the best decision for your specific situation.

Don’t make the biggest decision of your life without getting educated!  If you’re a first time home buyer looking to get more information about down payment assistance or the home buying process in general, go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.


Good News for Short-Sales

Good News for Short-Sales!  Part of the fiscal cliff deal approved last week included an extension of the forgiveness for taxes owed on relieved mortgage debt related to short-sales.  This extension will last until 12/31/2013.  In the past, when a homeowner completed a short-sale, the forgiven debt would have been counted as income and therefore taxed.

How does this help first time home buyers though?  Extending this tax forgiveness will probably mean more underwater homeowners will make the decision to sell.  If the Federal Government wouldn’t have extended this break, it would have potentially been one more thing forcing underwater homeowners to stay in a home they couldn’t afford.

But how does that help me, if I’m buying my first home?  The Greater Seattle area has had quite a lack of inventory for some time now.  Home prices in Seattle are continuing to rise partially because there are a lot of first time home buyers looking to buy, but not many homes on the market.  This causes multiple offer situations and bidding wars, which increases prices for first time home buyers.

So should first time home buyers buy short-sales?  Short-sales can be great deals in some cases, but there are some risks first time home buyers need to be aware of.  If you are considering buying a short-sale, you should first become educated on how they function.

Don’t buy a home without getting educated first!  If you’re thinking about buying a short-sale, or are looking for general information about buying your first home, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.