Find Out Why More Than Half of Buyers are Wrong About Down Payments

True or false: if you’re buying a home, you need to have at least a 20% down payment? If you answered true, you aren’t alone—so did 62% of Americans.

But in reality, that couldn’t be further from the truth—and you don’t have put off your home-buying dreams just because you can’t come up with 20% down!

While a 20% down payment will help you avoid private mortgage insurance (PMI), it isn’t some sort of home-buying hurdle that you must clear in order to buy. In fact, it’s far from the most common amount that U.S. buyers put down!

Here’s the truth about down payments—and why you shouldn’t let that 20% number prevent you from reaching your buying goals.

The Truth about Down Payments

A piggy bank standing against a white background.

According to NerdWallet’s 2019 Home Buyer Report, around 6 in 10 Americans think you need a 20% down payment in order to buy a house. Because of this, they also tend to think that it takes several years to come up with the necessary funds for buying.

Unfortunately, this way of thinking unnecessarily postpones plenty of people’s home-buying dreams!

The truth? The most common down payment amount—put forward by around 32% of buyers—was just 5% or less. Put that in terms of concrete amounts, and it translates to just $7,500 on a $150,000 home or $15,000 on a $300,000 home.

Other Common Down Payment Amounts

A single dollar bill sitting on a wooden surface.

While 5% or less is the most common down payment amount, it’s still just one of the many options that buyers choose. Here’s how the rest of the numbers break down:

  • 16% of buyers put down 6 – 10%
  • 23% of buyers put down 11 – 20%
  • 18% of buyers put down more than 20%
  • 10% of buyers bought their home outright

A 20% down payment is a great goal, but you don’t have to feel locked into that amount! Instead, consider how much money you’d feel comfortable with putting down, then work from there.

Buyers are Optimistic

A woman packing up her home and writing on a cardboard box.

Despite prevailing misconceptions about down payments, buyers are still feeling optimistic about the market. Around 42% of Americans feel better about their home-buying prospects this year, which is up almost 20% from last year.

Additionally, 44% of people say that the current economic and political conditions make them more likely to buy in the next year, which is around a 10% increase from last year.

Long story short? Now’s a great time to buy!

Find Your Dream Triangle Home

Buying a home is major step, so it’s important that you have trusted and experienced professionals on your side. At Linda Craft & Team REALTORS®, we have over 300 years of combined real estate experience, making us well-equipped to provide you with everything you need to find home-buying success.

Take some time to explore our resources for home-buyers, learn a little more about what our past clients have to say, and use our specialized search tool to narrow down your options. Once you’re ready to get started, we’d love to talk details!

Your Latest Course in Homebuying: The 5 Acronyms You Need to Know

You might think that since you’ve put some distance between now and high school and college, your days of memorizing vocabulary and learning new definitions is long gone. But if you’re buying a home, then you’re going to want to dust off those skills and start studying up.

Real estate comes with its own confusing jargon, and knowing what each term means makes you all-the-more prepared to tackle the process. Here are the top five homebuying acronyms that you should add to your vocabulary!

APR

Calculator

APR, or annual percentage rate, represents the annual cost of borrowing money based on your loan amount, interest rate, and other specific fees. The calculations for APR are a little confusing, but there are plenty of online calculators that can help you figure out what the number might look like for you!

FRM

FRM stands for fixed-rate mortgage, which is one of the most common types of mortgage. Luckily, this one pretty much means what it sounds like: with FRM, your interest rate will not change during the entire term of your loan.

DTI

A credit card.

One of the most important aspects of your finances that a lender looks at is your DTI, or debt-to-income ration. Your DTI is calculated by measuring your total monthly income against your total monthly debt payments. Ideally, you’d want to have around a 36% DTI.

PMI

If you can’t afford a 20% down payment, you’ll have to pay PMI, or private mortgage insurance. This acts as an added safeguard for lenders who work with you by ensuring that they’ll be protected from losses if you default on loan payments. Once you’ve paid off around 80% of your home, you’ll no longer have to pay PMI.

P & I

People at a bank.

P & I is just a fancy way of saying principal and interest, which are the portions of your monthly mortgage payment that go towards paying off the money you borrowed to purchase your home.

Ace Your Real Estate Experience

Of course, these five acronyms aren’t the only ones that’ll come up during your buying journey—but we’ll be around to make sure you can handle any other letter combinations that get thrown your way.

At Linda Craft & Team, REALTORS®, we’ve been working in the Raleigh real estate world for years, and we’d be more than happy to leverage our experience to your benefit. Get to know a little more about what we bring to the table, explore our resources for buyers, and give us a call when you’re ready to get started!

The Biggest Reasons Why Homeowners are Happy… and Renters Aren’t

Coffee or tea? Cake or pie? Rent or buy? Life is full of big questions—some a little harder to answer than others. But in the case of renting versus buying, there are a few big reasons why ownership still wins the battle.

Thinking about making the jump from renting to owning? Here’s how your life might change.

Does Owning Make You Happier than Renting?

A family with pets.

That’s the big question posed by the most recent Bank of America Homebuyer Insights Report. The answer? A resounding yes. In fact, out of the modern homebuyers interviewed, 93% of respondents said that owning a home made them happier than renting, and 83% said that they would never go back to renting after owning.

It doesn’t just end with happiness, though—79% of homeowners believe that buying their own property has changed them for the better and 88% say it’s the best decision they’ve ever made.

On the flip side, according to the latest Zillow Housing Aspirations Report, 45% of renters regret not buying, with the biggest reasons being lack of customization opportunities, high rent payments, and lack of private outdoor space.

The Effects of Owning a Home

A grandmother and granddaughter.

You hear a lot about the financial equity of owning a home, but Bank of America’s survey sought out information on the “emotional” equity of ownership—which brought up some interesting numbers.

When asked if they viewed the home as a place to make memories or a financial investment, more than half of respondents chose the former. After buying, more than 76% of people pursued new hobbies—including landscaping and gardening, cooking and baking, and interior design.

And it’s not just the individuals: family relationships also benefited. Homeownership allowed 49% of respondents to entertain more often and 24% to bring the entire family under one roof.

Current Homeowners versus Prospective Homeowners

A house.

If you’re still on the fence about buying a home, consider these numbers:

  • Time spent pursuing hobbies
    • Current homeowners: 82%
    • Prospective homeowners: 63%
  • The quality of social life
    • Current homeowners: 78%
    • Prospective homeowners: 58%
  • Financial well-being
    • Current homeowners: 77%
    • Prospective homeowners: 42%
  • Quality of life overall
    • Current homeowners: 88%
    • Prospective homeowners: 70%

Ready to Become a Homeowner?

Owning a home comes with a myriad of benefits—both financial and emotional. If you’re ready to take the leap into homeowning, then congratulations!

At Linda Craft & Team REALTORS ®, we’re dedicated to not only finding you the best Triangle-area home for your wants and needs, but also ensuring that your journey is seamless and stress-free. Browse some of the resources we have to offer our buyers, and use our specialized home search tool to narrow down your options. Once you’re ready to get started, just give us a call!

Why Owning a Home is One of the Most Effective Saving Strategies

Over the past few months, we’ve talked a great deal about the benefits of owning a home—and why today’s market is one of the best windows to buy.

With a new set of numbers released on home equity, we’ve got another major reason why owning a home pays: it forces you to save, and in the process, those savings only appreciate.

It’s All About Equity

A jar of coins.

As you pay off your home, you start building up your equity—which is, in short, the difference between the current value of the home and what you still owe on the home. As your home appreciates in value and you chip away at the payments, your equity increases. Think of it as a “forced savings account.”

During the housing crisis and recession from 2006 to 2008, it was common for homeowners to dip into their equity and pull out money for other big ticket purchases, which ended up spelling major trouble for their personal finances.

Since your equity is technically an asset, it’s part of your net worth. The greater your equity, the greater your net worth, the better your chance of building future wealth.

The Latest Numbers

A person paying off their bills.

According to a recent report from CoreLogic, the average homeowner gained a staggering $65,000 in equity over the last 5 years. Not only that, but another study from the Urban Institute found that 37.1% of all homes in the country are totally mortgage-free. Of the remaining 63% of homes, about half of them have at least 50% equity—and that number is only going up.

Crunch the numbers, and you’ll find that just over 50% of all homes in the country have at least 50% equity. That means a whole lot of homeowners are continuing to pay into that “forced savings account” and are setting themselves up for major future wealth in the process.

The Importance of Equity

A house.

By building up your equity, you’re ensuring that you have a firm financial base to stand on in the future. It does, however, take time to accumulate. That’s why it’s important to take advantage of current market conditions, and begin your journey to increased equity.

Ready to Invest in Your Savings Account?

Buying a home now means building your equity sooner and ensuring a stable financial future. Now’s the time to jump in! If you’re ready to get started with the buying process, the Linda Craft & Team, REALTORS® is here to help. Take some time to browse our resources, use our specialized search tool to narrow down your options, and give us a call to get started.

6 Key Real Estate Graphs that You Need to See

No matter what capacity you’re entering the Triangle area real estate market in—whether it’s buying, selling, or investing—it’s crucial to be prepared. By knowing all of the latest numbers on mortgage rates, median sales price, and average days on the market, you can gain a major advantage over your competition!

Since we want to ensure that each and every one of our clients is well-equipped to reach their goals, we wanted to give you a quick snapshot at all of the trends you need to know.

Here are the top 6 real estate graphs that you should study up on.

The Strength of the Current Market

Key takeaways:

  • Keeping an eye on the current status of the housing market is one of the best ways to make powerful and confident decisions when buying or selling a home.
  • Mortgage rates remaining near historic lows and houses selling in an average of only 29 days are just two key elements driving the strength of today’s market.
  • With the national data shown here, make sure to also determine what’s happening in your local market so you are fully informed when you’re ready to make your next move.

Navigate the Market with Linda Craft & Team REALTORS®

At Linda Craft & Team REALTORS®, we know the ins and outs of the local and national real estate market—and we’re more than happy to share that knowledge with you. Whether you’re buying and looking for a little help or selling and hoping for top dollar, our track record of satisfied clients shows that we have what it takes to lead you to success.

Ready to get started? Feel free to give us a call!

Ace Your Real Estate Experience: A+ Reasons to Hire an Agent

In a lot of ways, buying and selling a home is like a test. You want to make sure you study up on all of the materials and have the right supplies before you get started.

But maybe most importantly, you want to make sure you have a teacher that can guide you through the material in a way that’s easy to understand and sets you up for success.

If you’re on the fence about hiring an agent to help you buy or sell your home, here are a few ways we can help you ace the process.

Decode Contracts

Paperwork.

During the real estate journey, you’re going to have to deal with a lot of paperwork. Sometimes it’ll be easy to understand, but other times, all of that jargon will probably look like a foreign language—especially if it’s your first time.

We’ll make sure you’ll know exactly what the papers say, why they’re necessary, and what they mean for you.

Breeze through Negotiations

People shaking hands across a table.

If you aren’t used to negotiating, then this step in buying or selling a home can be tough to handle—especially since you’ll be emotionally invested in the process.

When you work with an experienced realtor, we’ll act as a buffer between you and the other party. Not only will we work to get the best deal possible for your wants and needs, but we’ll also provide a level-headed perspective.

Understand Pricing

People pointing at a laptop screen.

If you’re selling your home, then finding the right price is the key to success. Price too low, and you won’t maximize your investment. Price too high, and you’ll miss out on buyers—and maybe even have to bring your price down.

Luckily, we can make sure you have the right price from the get-go. With our home valuation, we’ll take into account all of the local and national real estate trends, as well as any updates you’ve made to your property.

When it comes to buying, we can also help you figure out whether you’re getting a fair price for your purchase. The last thing you want to do is spend your hard-earned money on a home that isn’t worth it!

Translate Market Conditions

People in a meeting.

Did you know we’re in a period of nearly unprecedented drops in mortgage rates? That home prices have been steadily ticking up this year? That more and more millennial buyers are entering the market?

We know all about the intricate details that make up the market conditions. These details can help decide everything from how high you can price your home to how long it’ll sit on the market. Before you even list or start searching, we can breakdown what the current conditions mean for your experience.

Benefit from Experience

People getting keys to a home.

Above all, we know the ins and outs of buying and selling. We’ve been around the block more than a few times—after all, our team does have hundreds of years of combined experience in real estate—so we know exactly what it takes to be successful.

You might have other options when it comes to real estate professionals in the Triangle, but if you get to know a little more about our team, you’ll start to understand why our clients swear by us.

Don’t Flunk Your Real Estate Journey

If real estate is like a test, then we think we can help you ace it. At Linda Craft & Team REALTORS®, we have years of experience with buying and selling homes in Raleigh—meaning we know exactly how to handle whatever the market throws at us.

Take some time to explore our resources, whether you’re buying, selling, or just exploring the area, and give us a call when you’d like to get started!

Nervous About a Recession? Here’s Why You Don’t Need to Worry about a 2008 Repeat

If you’re getting ready to buy a home soon, then you’ve probably heard whispers of an imminent recession—and the real estate market and recessions don’t have a great track record. Although it’s hard not to be plagued by memories of the 2008 recession and the housing market crash, you need to know: the conditions of 2008 will not happen again.

Here’s what makes this year’s market different, and why you shouldn’t be nervous about buying a home.

Even Though People are Wary…

People talking around a laptop.

It must be addressed that the events of 2008 are enough to give any buyer some PTSD. In fact, a recent survey from realtor.com found that 53% of buyers (both first-time and repeat) believe a recession will occur this year or next, and 57% believe it’ll be worse than 2008. On top of that, 55% said they would cancel their plans to move if a recession did occur.

While these people are certainly right in their prediction that a recession could soon hit, it won’t have nearly the same effect on the housing market that it did ten years ago.

…The Housing Market Won’t Resemble 2008

A large house.

Jeff Tucker, a Zillow economist, sheds a little more light on this point. In a recent article, he outlines how unusual the 2008 housing market was—largely because of risky borrowers taking unpredictable, adjustable-rate mortgages when they may not have been financially prepared. This year, however, the market is mostly made up of buyers with great credit scores taking out predictable, 30-year fixed-rate mortgages.

George Ratiu, a senior economist for realtor.com, echoes Tucker’s sentiments, adding that a recession now would likely be much shorter than the one we saw in the past.

2001 vs. 2008

In the recent history of our country, there have been two major recessions: 2008 and 2001. While most people vividly remember the almost 20% drop in home prices during the 2008 recession, not many remember that homes prices actually went up almost 7% during 2001’s.

When it comes to the next recession, you can expect conditions to be more similar to 2001, not 2008.

Still on the Fence?

People shaking hands.

It’s true that no one can predict the future, and the state of the economy could greatly change over the next 12-24 months. While it’s great to be cautious, it’s also important to keep a realistic mindset—and listen to the experts.

If you’re hoping to buy a home soon, you should know that you don’t have to worry about 2008-like conditions. The current and future market are still great for buying!

Start Your Buying Journey

Ready to get started with your home search? Then Linda Craft & Team REALTORS® is here to help. Get to know more about our expertise and local knowledge, explore some of our resources, and give us a call when you’re ready to explore all of your Raleigh real estate options!

5 Simple Steps to Decrease Your Buying & Selling Stress and Avoid Information Overload

The internet is an amazing tool, but sometimes, having easy access to all of the information we could ask for can be overwhelming—especially when facing a major decision like buying or selling a home.

Which season is the best for buying? How do you price your home correctly? What do you need for your mortgage application? Oftentimes, conflicting answers can complicate our decisions.

Avoid confusion, take a deep breath, and stay on the right track by following these five steps!

Calm Down

According to productivity expert Jeff Davis, the first and most important step is to recognize any stress or concern that might be building up, and stop it in its tracks before it leads to more panic.

Slow Down

A woman in a coffee shop.

Take a minute, and let yourself breathe. The pace at which you can find information gets quicker and quicker as technology improves, and it can often make you feel pressured by unrealistic time constraints. Stop for a moment and collect your thoughts!

Think

Why did you want to buy or sell your home? Why did you choose now? What are you hoping to achieve? Remind yourself of your goals, and recognize anything that might be impractical. Are you still focused on what’s most important?

Plan

A person journaling.

Now that you’ve gained some new knowledge, does anything about your search need to change? Do you need clarification on a few points, or are you worried about a certain outcome? Your agent is the perfect resource for any of your questions or concerns—that’s what they’re there for!

Act

Have you taken time to consider your options? Give it some thorough consideration before making any concrete moves, then meet with your agent and get the ball rolling.

Avoid Information Overload

Two women meeting around a laptop.

Don’t get stressed out about all of the conflicting information on buying and selling—and don’t overload yourself by not coming up for air! Instead of consulting the World Wide Web, take your questions to Linda Craft & Team REALTORS®. With over 300 years of combined real estate experience, we can give you the right answer to any and all of your buying and selling questions.

Ready to Get Started?

So are we. Get in touch with Linda Craft & Team REALTORS®, and we’ll guide you through the confusing ins and outs of the real estate process. Get to know more about our resources, expertise, and local knowledge, and give us a call when you’re ready to explore all of your Raleigh real estate options!

The Best Real Estate Advice for Millennials—from a Millionaire

If you’re a millennial, then you’re probably a little tired of hearing all the criticism towards your generation. Buying avocado toast instead of saving money, always texting instead of calling—they’re all pretty unfair generalizations.

Another common criticism of millennials? That they never buy homes. But actually, that couldn’t be further from the truth! In fact, millennials represent the largest portion of homebuyers in the market.

And according to millionaire David Bach, buying a home is one of the best decisions you can make for your future equity.

It’s All About Owning

A beautiful home.

Since you’re likely working with limited funds, your first home probably won’t be your dream home—but that’s okay. Getting your foot in the door and buying a home is the stepping stone to building wealth and equity, according to Bach. Even if your budget isn’t as high as you’d like, it’s best to buy as soon as you can!

In Bach’s opinion, you should start by crunching the numbers. You might think you can’t afford a home, but setting clear goals based on concrete numbers will help put things into a realistic perspective.

A good rule of thumb? Make sure your home payments don’t total more than 30% of your take-home pay.

David Bach’s Background

A person pulling money out of their wallet.

Why should you trust what Bach has to say? Well, his resume speaks for itself. A self-made millionaire, Bach has written nine consecutive New York Times bestsellers.

Not only that, but he’s also one of the only business authors to ever have four books on the New York Times, Wall Street Journal, BusinessWeek, and USA Today bestseller lists at the same time. His book The Automatic Millionaire even spent 31 weeks on the New York Times bestseller list!

Additionally, Bach is considered to be one of the foremost authorities on finance, appearing as a contributor on NBC’s Today Show,  ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS.

Why Now is a Great Time to Buy

A person holding up house keys.

If you’re all in on following Bach’s advice, then you should know: now is the perfect time to buy a home—and we’re not just saying that.

Mortgage rates are hitting near-record lows, and home prices are steadily increasing. Buying a home soon means saving on payments now and benefitting from higher prices in the future.

Ready to Get Started?

We understand that buying a home is a major decision. But with over 300 years of combined real estate experience, in-depth area knowledge, and a wide collection of resources, Linda Craft & Team REALTORS® are well-equipped to lead you to buying success.

Explore a few of our resources, kick off your home search, and give us a call when you’re ready to get started.

Boost Your Equity over the Next Five Years with One Important Decision

Dipping your toes in the waters of home-buying? Based on the latest numbers, you may want to consider jumping in. In fact, buying a home right now could lead to an equity boost of almost $50,000 in the next five years!

Take a look at a few numbers from the experts, see where home prices are headed, and learn how the Linda Craft & Team REALTORS® can help you today.

Home Prices are Steadily Rising

A computer with graphs and charts.

According to the most recent Home Price Expectation Survey (HPES), home values will appreciate by 4.1% by the end of 2019. That trend will continue well past this year, as well, with an average annual appreciation of 3.2% over the next five years. By 2023, you can expect a staggering 16.8% cumulative jump!

Maybe you’re thinking that those numbers are a little optimistic. We don’t blame you—but even the more pessimistic experts estimate a 6.7% cumulative appreciation over the next five years.

What This Means for You

A miniature house and key.

Assuming those numbers all pan out, buying a home right now could mean major profits in the future. For example: let’s say you find a home you love, you make an offer, and you close for $250,000. By next year, that home’s value will have jumped to $260,000. By 2022, it’ll be almost $275,000. And by 2025? You’re looking at $292,000, a $42,000 jump since your initial purchase.

These numbers might sound too good to be true, but they’re calculated by a panel of over 100 economists, investment strategists, and housing market analysts.

Gearing up to Buy a Home?

A house surrounded by trees and greenery.

Sold on buying a home? In all honestly, you won’t find a much better time than now. With mortgage rates still hovering at near-record lows and home prices steadily ticking up, you could buy a new home for a great price now and make an amazing profit when you list it later. Your future self—and future equity—will thank you.

Trust Linda Craft & Team REALTORS®

Buying a home is a big decision, and one that you want to be well-equipped for. Luckily, the professionals at Linda Craft & Team REALTORS® have over 100 years of combined real estate experience in the Triangle area. Not only can we guide you to the best listings on the market, but we can also offer a wide variety of resources along the way.

Are you ready to buy a home and boost your equity? Give our team a call today!