What You Need to Know About the Mortgage Process [INFOGRAPHIC]

What You Need to Know About the Mortgage Process [INFOGRAPHIC]

Presented as a public service by Joe Peters of Coldwell Banker

Some Highlights:

  • Many buyers are purchasing homes with down payments as little as 3%.
  • You may already qualify for a loan, even if you don’t have perfect credit.
  • Your local professionals are here to help you determine how much you can afford, so take advantage of the opportunity to learn more.

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Want to Be in a New Home By the End of the Year?

Want to Be in a New Home By the End of the Year?

Presented as a public service by Joe Peters of Coldwell Banker

Homes are selling quickly, and inventory is typically low during this time of year. If you’re considering listing your house, let’s connect so you can settle into your dream home before the holidays.


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You Might Still Qualify as a First Time Buyer–Even If You’ve Owned a Home Before

You Might Still Qualify as a First Time Buyer–Even If You’ve Owned a Home Before

Presented as a public service by Joe Peters of Coldwell Banker

First time home buyers are sometimes considered a “pump primer” in real estate. Buying an initial home typically means buying from someone else who then buys another home. And on it goes. But it’s often that first time buyer that starts the ball rolling and why they’re encouraged to stop renting and start owning. This group is so important that many state agencies and mortgage companies offer loan programs that cater to first time buyers with special incentives. The incentives could be a lower rate or a contribution toward closing costs and even assistance with a down payment.

How does a lender know if someone is a first time buyer? By asking. Lenders who have access to programs such as a Down Payment Assistance product, will ask the applicant at the early stages of prequalification. A lender will also want to know how many funds are available to close on a home purchase, which includes not just the down payment, but associated closing costs and cash reserves as well. If the applicant responds with “selling my home” then a first time buyer program won’t apply.

Depending upon where the subject property is located, there may be grants available to help with funds needed to close. Grants are funds issued to first time buyers that do not have to be paid back. Many such programs do ask that the applicants live in the property for at least three years and if that’s the case, when the home is sold, the grant is forgiven. Various government agencies can also participate in the first time buyer market with loan programs that offer discounted interest rates. There will typically be certain income limitations for such programs, which limit the amount of household income of the applicants. Or, homes located in underserved markets may also work only with first time buyers. There are different variants depending upon the location of the property but most such programs do carry these guidelines.

Someone can qualify for a first time buyer incentive even if they’ve owned a home before. At first glance that doesn’t make a whole lot of sense, but most programs require someone to not have owned a home within the previous three years. If that litmus test is passed, someone may qualify for a first time buyer program after all. Lenders can ask about previous home ownership but can also look at a credit report for the applicants to see if there is a mortgage account listed. The credit report will report the mortgage account and provide dates when the mortgage was originally issued and when it was paid off. If the mortgage was retired more than three years ago, the report will say so. If the mortgage was retired less than three years, the applicant would not be approved for a first time home buyer loan program.

Finally, if a couple buys a home together, there’s the possibility one will be a first time buyer and the other having owned a home before. In this instance, the loan would not be considered for a first time buyer program because one of the borrowers was a previous homeowner.


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Homeownership is the Top Contributor to Your Net Worth

Homeownership is the Top Contributor to Your Net Worth

Presented as a public service by Joe Peters of Coldwell Banker

Many people plan to build their net worth by buying CDs or stocks, or just having a savings account. Recently, however, Economist Jonathan Eggleston and Survey Statistician Donald Hays, both of the U.S. Census Bureau, shared the biggest determinants of wealth,

“The biggest determinants of household wealth [are] owning a home and having a retirement account.” (Shown in the graph below):

Homeownership is the Top Contributor to Your Net Worth | MyKCMThis does not come as a surprise, as we often mention that homeownership can help you to increase your family’s wealth. This study reinforces that idea,

 “Net worth is an important indicator of economic well-being and provides insights into a household’s economic health.”

Having equity in your home can help your family move in that direction, building toward substantial financial growth. According to the report noted above, people are not only creating net worth in the homes they live in, but many are also earning equity in rental property investments too. (See below):Homeownership is the Top Contributor to Your Net Worth | MyKCMJohn Paulson said it well,

If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

Bottom Line

There are financial and non-financial benefits to owning a home. If you would like to increase your net worth, let’s get together so you can learn all the benefits of becoming a homeowner.


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62% of Buyers Are Wrong About Down Payment Needs

62% of Buyers Are Wrong About Down Payment Needs

Presented as a public service by Joe Peters of Coldwell Banker

According to the ‘2019 Home Buyer Report conducted by Nerdwallet, many first-time buyers still believe they need a 20% down payment to buy a home in today’s market:

“More than 6 in 10 (62%) Americans believe you must put at least 20% down in order to purchase a home.”

When potential homebuyers think they need a 20% down payment to enter the market, they also tend to think they’ll have to wait several years (in some markets) to come up with the necessary funds to buy their dream homes. The report continues to say,

“The truth: 32% of current U.S. homeowners put 5% or less down on their home, according to census data.” (as shown below):

62% of Buyers Are Wrong About Down Payment Needs | MyKCMThe lack of knowledge about the home-buying process is unfortunately keeping many motivated buyers on the sidelines.

Bottom Line

Don’t let a lack of understanding keep you and your family out of the housing market. Let’s get together to discuss your options today.


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