how much to save for a down payment

How Much Do You Need to Save for a Down Payment?

Wondering How Much You Need To Save for a Down Payment?

Wondering How Much You Need To Save for a Down Payment? | MyKCM

If you’re getting ready to buy your first home, you’re likely focused on saving up for everything that purchase involves. You may be wondering how much you need to save for a down payment. But don’t let a common misconception make the process harder than it could be.

Understand 20% Isn’t Always the Typical Down Payment

Freddie Mac explains:

“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.

Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your home buying dream than you realize. According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, the median down payment today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):

Wondering How Much You Need To Save for a Down Payment? | MyKCM

Learn About Options That Can Help You Toward Your Goal

If saving for a down payment still feels like a challenge, know that there’s help available. A real estate professional and trusted lender can show you options that could help you get closer to your down payment goal. According to latest Homeownership Program Index from Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.

Plus there are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.

To understand your options, be sure to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like Down Payment Resource. Then, partner with a trusted lender to learn what you qualify for on your home buying journey.  We know some great ones who we are happy to connect you with.

Bottom Line

Remember, a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect. You’ll also want to make sure you have a trusted lender so you can explore your down payment options.

Planning to retire soon? It may be time to make a move.

Planning to Retire Soon?

If you are planning to retire soon it could be time for you to consider making a move.

Planning to Retire? It Could Be Time To Make a Move. | MyKCM

If you’re thinking about retirement or have already retired this year, you may be planning your next steps. One of your goals could be selling your Richmond-area house and finding a home that more closely fits your needs.

Fortunately, you may be in a better position to make a move than you realize. Here are a few things to think about when making that decision.

Consider How Long You’ve Been in Your Home

From 1985 to 2008, the average length of time homeowners typically stayed in their homes was only six years. But according to the National Association of Realtors (NAR), that number is rising today, meaning many homeowners are living in their houses even longer (see graph below):

Planning to Retire? It Could Be Time To Make a Move. | MyKCM

When you live in a home for a significant period of time, it’s natural for you to experience a number of changes in your life while you’re in that house. As those life changes and milestones happen, your needs may change. And if your current Richmond-area home no longer meets them, you may have better options waiting for you.

Consider the Equity You’ve Gained

Additionally, if you’ve been in your home for more than a few years, you’ve likely built up significant equity that can fuel your next move. That’s because the longer you’ve been in your home, the more likely it’s grown in value due to home price appreciation. Data from the Federal Housing Finance Agency (FHFA) illustrates that point (see graph below):

Planning to Retire? It Could Be Time To Make a Move. | MyKCM

While home price growth varies by state and local area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by over 50%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time.  We here in Richmond have definitely seen healthy appreciation as of late.

Consider Your Retirement Goals

Whether you’re looking to downsize, relocate to a dream destination, or move so you live closer to loved ones, that equity can help you achieve your homeownership goals. NAR shares that for recent home sellers, the primary reason to move was to be closer to loved ones. Plus, retirement played a large role for those moving greater distances.

Whatever your home goals are, we can work with you to find the best option. We’ll help you sell your current house and guide you as you buy the home that’s right for you and your lifestyle today.

Bottom Line

Retirement can bring about major changes in your life, including what you need from your home. Let’s connect to explore your opportunities in Richmond or beyond.

update your house

Should You Update Your House Before You Sell?

Before you update your house for listing, call us for our professional advice.

Should You Update Your House Before You Sell? Ask a Real Estate Professional. [INFOGRAPHIC] | MyKCM

Some Highlights

  • You may be wondering what needs to be renovated before you sell your house. In today’s shifting market, making your house appealing is more important than ever.
  • That’s why it’s essential to lean on a real estate professional who has in-depth knowledge of today’s housing market. They know what buyers are looking for and how to highlight any upgrades you make.
  • Let’s connect so you know where to focus your efforts so your house will stand out in a today’s market.
sell before the holidays

3 Reasons to Sell Before the Holidays

1. Get One Step Ahead of Other Sellers

Typically, in the residential real estate market, homeowners are less likely to list their houses toward the end of the year. That’s because people get busy around the holidays and deprioritize selling their house until the start of the new year when their schedules and social calendars calm down.

Selling now, while other homeowners may hold off until after the holidays, can help your house stand out. Start the process with a real estate professional today so you can get your house on the market and get ahead of your competition.

2. Get in Front of Serious Buyers This Season

Even though housing supply has increased this year as buyer demand has moderated, it’s still low overall. That means there aren’t enough homes on the market today, especially as the millennial generation reaches their peak home-buying years. As Mark Fleming, Chief Economist at First American, says:

“While not the frenzy of 2021, the largest living generation, the Millennials, will continue to age into their prime home-buying years, creating a demographic tailwind for the housing market.”

Serious buyers will still be looking this winter and your house may be exactly what they’re searching for. If you work with us to list your house now, you’ll be able to get in front of the eager buyers who are hoping to make a move before the year ends.

3. Seize a Great Chance To Move Up

Don’t forget, today’s homeowners have record amounts of equity. According to CoreLogic, the average amount of equity per mortgage holder has climbed to almost $300,000. That’s an all-time high. That means the equity you have in your house right now could cover some, if not all, of a down payment on the home of your dreams.

And as you weigh the reasons to sell before winter, don’t lose sight of why you’re thinking about moving in the first place. Maybe it’s time to buy a house that’s in a better location for you, has the space you and your loved ones have been craving, or simply gives you that sense of home. We, as experienced real estate advisors, can help you determine how much home equity you have and how you can use it to achieve your goal of making a move.

Bottom Line

If you’re thinking about selling your house so you can find a home that better suits your needs, don’t delay your plans. Call us today to accomplish your goals before winter.

Four Things That Help Determine Your Mortgage Rate

Are you considering buying a home in the Richmond area?

Whether you are relocating to Richmond, looking to upsize or downsize from your current Richmond home, or thinking about hanging up your “renter” hat to finally become a Richmond home buyer, you will most likely need to consider interest rates and monthly payments.  Here are four things that help determine your mortgage rate.

Four Things That Help Determine Your Mortgage Rate | MyKCM

If you’re looking to buy a home, you probably want to secure the lowest interest rate possible for your home loan. Over the last couple of years, that was easier to do as the housing market saw record-low mortgage rates, but this year rates have risen dramatically.

If you’re looking for ways to combat today’s higher rates and lock in the lowest one you can, here are a few factors to focus on. Since approval opportunities can vary, connect with a trusted lender for customized advice.

Your Credit Score

Credit scores can play a big role in your mortgage rate. Freddie Mac explains:

When you build and maintain strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you’ve paid back your loans as agreed and used your credit wisely. Strong credit also means your lender is more apt to approve you for a mortgage that has more favorable terms and a lower interest rate.”

That’s why it’s important to maintain a good credit score. If you want to focus on improving your score, your trusted advisor can give you expert advice to help.

Your Loan Type

There are many types of loans, each offering different terms for qualified buyers. The Consumer Financial Protection Bureau (CFPB) says:

There are several broad categories of mortgage loans, such as conventional, FHA, USDA, and VA loans. Lenders decide which products to offer, and loan types have different eligibility requirements. Rates can be significantly different depending on what loan type you choose.”

When working with your real estate advisor, make sure you find out what’s available in your area and which types of loans you may qualify for.

Your Loan Term

Another factor to consider is the term of your loan. Just like with location and loan types, you have options. Freddie Mac says:

When choosing the right home loan for you, it’s important to consider the loan term, which is the length of time it will take you to repay your loan before you fully own your home. Your loan term will affect your interest rate, monthly payment, and the total amount of interest you will pay over the life of the loan.”

Depending on your situation, the length of your loan can also change your mortgage rate.

Your Down Payment

If you’re a current homeowner looking to sell and make a move, you can use the home equity you’ve built over time toward the down payment on your next home. The CFPB explains:

In general, a larger down payment means a lower interest rate, because lenders see a lower level of risk when you have more stake in the property. So if you can comfortably put 20 percent or more down, do it—you’ll usually get a lower interest rate.”

To learn more, connect with a lender to find out the difference a higher down payment can make for your new mortgage.

Bottom Line

These are just few factors that can help determine your mortgage rate if you’re buying a home. The best thing you can do is have a team of professionals on your side. Connect with us and a trusted lender so you have the expert advice you need in each step of the process.

Why Buying a Richmond Home May Make More Sense Than Renting

If you are renting or thinking of renting a home or apartment in Richmond, VA, you need to read this.

In the last year alone, Richmond area rents rose a whopping 36% on average.  That’s the 8th highest of all markets in the country. Here’s why buying a Richmond home could be a sound financial move.

For those who think they have no choice but to rent because they can’t afford to buy, we promise that there are alternatives to high down-payments.  And even though mortgage rates are higher than you may be used to, they are still far below averages over the past several decades.  Keep in mind that rent is a 100% interest rate and you are building no equity at all.  If buying a Richmond home, experts anticipate that you will continue to build equity on that purchase and you can always refinance if rates go down in the future.

If you are already renting and have roommates, consider buying and becoming a landlord yourself!  Rent those extra bedrooms out to friends and they can help you pay down that mortgage.

Check out this fantastic infographic.  It really puts all the numbers in perspective.  We’d love to help you run your own numbers to put your life-changing move into motion!

Why Buying a Home May Make More Sense Than Renting [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you’re trying to decide whether to rent or buy a home, consider the advantages homeownership offers.
  • Buying a home can help you escape the cycle of rising rents, it’s a powerful wealth-building tool, and it’s typically considered a good hedge against inflation.
  • If you’re ready to take advantage of the benefits of homeownership, let’s connect to explore your options.
benefit of buying a home in Richmond

The True Strength of Homeowners Today

The main benefit of buying a home in Richmond is that our housing market is strong and building home equity is one of the best ways to build wealth.

Richmond homeowners are wondering what’s going on with the Real Estate market and how home values will hold up with the recent shift.  The article below gives a great overview of the benefit of buying a home in Richmond.

The True Strength of Homeowners Today | MyKCM

The real estate market is on just about everyone’s mind these days. That’s because the unsustainable market of the past two years is behind us, and the difference is being felt. The question now is, just how financially strong are homeowners throughout the country? Mortgage debt grew beyond 10 trillion dollars over the past year, and many called that a troubling sign when it happened for the first time in history.

Recently Odeta Kushi, Deputy Chief Economist at First American, answered that question when she said:

“U.S. households own $41 trillion in owner-occupied real estate, just over $12 trillion in debt, and the remaining ~$29 trillion in equity. The national “LTV” in Q2 2022 was 29.5%, the lowest since 1983.”

She continued on to say:

“Homeowners had an average of $320,000 in inflation-adjusted equity in their homes in Q2 2022, an all-time high.”

What Is LTV?

The term LTV refers to loan to value ratio. For more context, here’s how the Mortgage Reports defines it:

“Your ‘loan to value ratio’ (LTV) compares the size of your mortgage loan to the value of the home. For example: If your home is worth $200,000, and you have a mortgage for $180,000, your LTV ratio is 90% — because the loan makes up 90% of the total price.

You can also think about LTV in terms of your down payment. If you put 20% down, that means you’re borrowing 80% of the home’s value. So your LTV ratio is 80%.”

Why Is This Important?

This is yet another reason we won’t see the housing market crash. Home equity allows homeowners to be in control. For example, if someone did need to sell their home, they likely have the equity they need to be able to sell it and still put money in their pocket. This was not the case back in 2008, when many owed more on their homes than they were worth.

Bottom Line

Homeowners today have more financial strength than they have had since 1983. This is a combination of how homeowners have handled equity since the crash and rising home prices of the last two years. And this is yet another benefit of buying a home in Richmond and why homeownership in any market makes sense.