The Lawhead Team would like to share the latest One Cool Thing on unique ways you can get help with your down payment for your home:

One of the biggest misconceptions about homebuying is the need for a 20% down payment. Here are some unique ways you can get help with your down payment –

• Crowdsource: Some people use crowdsourcing websites, like Kickstarter, to fund short films and concert tours, so who says you can’t crowdsource your first home?
• Your Employer: Employer Assisted Housing (EAH) programs help connect low-to moderate-income workers with down payment assistance through their employer. Ask the HR or benefits personnel at your employer if the company is party of an EAH program.
• Lender Programs: Many lenders offer programs to help people buy a home with a small down payment. FHA mortgages, for example, can require as little as 3.5% down.
• Government Options: The U.S. Department of Housing and Urban Development offers a number of homeownership programs including ones based on profession such as law enforcement officers, firefighters, teachers and EMT’s.

The California Association of Realtors also offers a Down Payment Resource Directory that will help you find out if you are eligible for any of the 400 plus down payment assistance programs available in California.

The Lawhead Team would like to share the C.A.R.’s Center for Real Estate’s latest “One Cool Thing” about what stands in the way of achieving the American Dream.

Prospective home buyers face numerous challenges when it comes to achieving the American Dream of homeownership, but obstacles remain and often vary among ethnic groups.

Among those who plan to buy a home, the biggest challenges home buyers face are:

• 29% Saving for a down payment
• 27% Lack of inventory
• 22% Access to credit and financing
• 19% Personal debt

Click the image below for more hurdles home buyers face achieving the American Dream.

Source: The Futures Company in partnership with the CALIFORNIA ASSOCIATION OF REALTORS® Center for California Real Estate

The Lawhead Team would like to share the following article from Time about low down payment loans on your new home.

Low Down Payment Loans Are Back

A feature of the housing crisis is back.

Just because you haven’t saved up enough for a 20% down payment—or even 10%—doesn’t mean you’re locked out of the housing market.

In 2015, 26% of loans for home purchases were made with down payments of less than 10% of the home’s value, according to data released Thursday from RealtyTrac. That’s a 10% increase from 2014. In fact, the number of home owners who purchased homes with low down payments has been steadily increasing for the past five years.

The uptick is due in large part to a reduction in the cost of mortgages offered by the Federal Housing Administration, which underwrites loans to borrowers with subpar credit. While critics worry that a surge in low-money-down lending could set the stage for a reprise of the housing bubble, market watchers say the most important result of the change is to make homeownership a more realistic goal for many people, especially first-time buyers. In recent years, there has also not been a significant difference in the number of people who default on low-down-payment loans as opposed to those with higher down payments, according to data from the Urban Institute.

If you’re looking to become a homeowner but can only afford to put a small amount down, here are a few more things to keep in mind:

• Talk to a certified credit counselor, Bailey says. An adviser can walk you through your finances and help you decide if you’re in a position to buy a home despite not having a lot of savings built up. 
• Keep in mind the cost of private mortgage insurance, which is required for anyone buying a home with a down payment of less than 20% of the value of the home. Add that on top of monthly mortgage premiums (and the higher interest rates you’ll likely pay when you put down less money), and in the long run taking out an FHA loan with a low down payment could be more expensive than paying 20% upfront. Additionally, the agency now also requires that certain borrowers pay insurance for the entire term of the mortgage, unless they refinance.
• Make sure you’re able to set aside at least 1% of the house’s value in cash, in case you need to tap into it for maintenance or emergency repairs, says Mark Calabria, director of financial regulation studies at the Cato Institute. And of course, be prepared for unforeseen financial challenges in your own life: For instance, if you were to lose your job, you’d ideally want to have enough savings to cover six months of mortgage payments.

Click here to read entire article.

The Lawhead Team would like to share the latest “One Cool Thing” from the California Association of Realtors about student loan debt and buying a home.

The majority of adults say that owing a home is either the “most important” or “very important” part of the American Dream.

However, the burden of student loan debt and a tight lending environment appear to be working against many potential home buyers.

• 1 out of 4 Americans knows someone who has delayed buying a home because of student loan debt
• 60% say owning a home is either the “most important” or a “very important” part of the American Dream

Potential obstacles preventing homeownership:

• 17% –  Student loan debt
• 14% – Lack of down payment
• 13% – Ability to afford a home in a preferred neighborhood
• 11% – Lack of job security

Source: NeighborWork America. “America at Home” survey.

Are you looking to purchase a home in North San Diego County? Check out the latest in housing affordability from the CAR’s HomeDex Report:

Housing Affordability – Single-Family Detached Homes

• The monthly payment – including principal, interest, property taxes, and insurance – for the median-priced SFD home in North San Diego County fell, from $3,004 in September 2014 (based on a conventional mortgage) to $2,826 in October 2014.
• The monthly payment for the median-priced SFD home in non-North San Diego County declined, from $2,338 in September 2014 to $2,313 in October 2014.
• The percent of San Diego County households that could afford the median-priced SFD home in North County increased, from 25 percent in September 2014 to 28 percent in October 2014, according to the North San Diego County HomeDex; the affordability percentage in non-North County zip codes also increased, from 36 percent in September 2014 to 37 percent in October 2014.
• The affordability percentage was 25 percent in North San Diego County and 37 percent in non-North San Diego County in October 2013.
• The HomeDexTM affordability percentage for all homes in North San Diego County – single-family detached and single-family attached together – remained at 32 percent in October 2014

Housing Affordability – Single-Family Attached Homes

• The monthly payment – including principal, interest, property taxes, and insurance – for the median-priced SFA home in North County increased to $1,932 in October 2014. The monthly payment for the median-priced SFA home in non-North San Diego County zip codes dropped, to $1,561 in October 2014 from $1,602 in September 2014.
• The percent of San Diego County households able to afford the median-priced SFA home in North County fell, from 46 percent in September 2014 to 45 percent in October 2014.
• The SFA home affordability level for non-North San Diego County zip code increased, to 56 percent in October 2014 from 54 percent in September 2014.
• 52 percent of county households were able to afford the median-priced SFA home in North San Diego County in October 2013; 57 percent were able to afford the median-priced SFA home in non-North County zip codes in October 2013.

The Lawhead Team would like to share the latest from the North San Diego County Association of Realtors® HomeDex Report for all of 2013 for households in San Diego:

Single-Family Detached Median Prices and Home Characteristics

• The median price for North San Diego County single-family detached (SFD) homes sold increased 20 percent in 2013, from $450,000 in 2012 to $540,000 in 2013.
• Median price-per-square foot increased 19.10 percent, to $255 in 2013 from $214 in 2012.
• The number of SFD homes sold San Diego County during 2013 increased 1.01 percent, compared to 2012.
• The increased sales and prices increased total sales volume (total value of all homes sold) by 18.76 percent in 2013, compared to 2012.

Housing Affordability – Single-Family Detached Homes

• The monthly payment for a conventional mortgage – including principal, interest, property taxes, and insurance – for the median-priced SFD home in North San Diego County ranged between $2,128 and $2,905 in 2013.
• The percent of San Diego County households that could afford the median-priced SFD home in North County ranged between 25 and 37 percent in 2013, according to the North San Diego County HomeDexTM
• In non-North County, the percentage of households that could afford the median-priced home in 2013 ranged between 36 and 49 percent.

Single-Family Attached Median Prices and Home Characteristics

• The median-priced single-family attached (SFA) home in North San Diego County increased 27.84 percent, to $326,000 in 2013 from $255,000 in 2013.
• Median SFA home price per-square-foot increased 25.78 percent, to $262 in 2011 from $208 in 2013.
• The number of sold SFA homes increased 3.74 percent in 2013 compared to 2013
• Total dollar sales volume jumped 28.45 percent in 2013 compared to 2013.

Housing Affordability – Single-Family Attached Homes

• The monthly payment for a conventional mortgage (principal, interest, property taxes, and insurance) to purchase the median-priced SFA home in North San Diego County during 2013 ranged between $1,321 and $1,793.
• The percent of San Diego County households that could afford the median-priced SFA home in North County ranged between 47 and 60 percent in 2013, according to the North San Diego County HomeDexTM
• In non-North County, the percentage of households that could afford the median-priced SFA home ranged between 57 and 70 percent in 2013.

Whether you go with a conventional loan, FHA loan or a VA loan, there are different features that many loans offer.

The following are some of those features:

Fixed Rate – A mortgage with a fixed rate means your interest and mortgage payments remain the same, or “fixed”, through the entire loan. Typically the loans are for 15 to 30 years. A 15 year loan will obviously have higher monthly payments but you will end up saving more than half of the interest costs than a 30 year fixed loan and pay it off in half the time.

Adjustable Rate – This type of mortgage is also known as an ARM. The interest rate on an ARM fluctuates during the entire life of the loan. Your interest rate will be modified based on a predetermined economic index established at the beginning of the loan. Most of the time a max is set on the interest rate to avoid enormous increases. An ARM is usually safe only if your budget can afford to handle fluctuating payments.

Payment Option Adjustable Rate – This type of loan accommodates a households fluctuating cash flow which include minimum payment options, interest only payment options and others. You will want to thoroughly understand these types of loans because you need to make sure you are prepared for a sudden increase in payment.

Balloon Rate – A balloon mortgage has a fixed rate but for a shorter term than 15 or 30 years. At the end of the balloon rate (the fixed rate), the borrower must pay the remaining lump sum or refinance. If the buyer is purchasing unimproved property that they plan to build on in less than ten years, a balloon mortgage may be a good option.

Talk to a lending professional to find out what the best type of loan for you is. We highly recommend knowing exactly what you are getting into when you apply for a home loan.

The Lawhead Team would like to share the North San Diego County Homedex Report’s Housing Affordability report for single family detached and attached homes. Read below to see what type of home in North San Diego County you can afford:

Housing Affordability – Single-Family Detached Homes:

• The monthly payment – including principal, interest, property taxes, and insurance – for the median-priced SFD home in North San Diego County increased, from $2,902 in January 2014 (based on a conventional mortgage) to $2,913 in February 2014.  The monthly payment for the median-priced SFD home in non-North San Diego County increased, from $2,196 in January 2014 to $2,214 in February 2014.
• The percent of San Diego County households that could afford the median-priced SFD home in North County remained at 26 percent in February 2014, according to the North San Diego County HomeDexTM; the affordability percentage remained at 38 percent in February 2014 in non-North County zip codes.
• The affordability percentage was 36 percent in North San Diego County and 47 percent in non-North San Diego County in February 2013.
• The HomeDexTM affordability percentage for all homes in North San Diego County – single-family detached and single-family attached together – remained 33 percent in February 2014.

Housing Affordability – Single-Family Attached Homes

• The monthly payment – including principal, interest, property taxes, and insurance – for the median-priced SFA home in North County decreased, to $1,657 in February 2014 from $1,717 in January 2014.  The monthly payment for the median-priced SFA home in non-North San Diego County zip codes increased, to $1,522 in February 2014 from $1,452 in January 2014.
• The percent of San Diego County households able to afford the median-priced SFA home in North County increased, from 50 percent in January 2014 to 52 percent in February 2014.
• The SFA home affordability level for non-North San Diego County zip code decreased to 55 percent in February 2014, from 57 percent in January 2014.
• 59 percent of county households were able to afford the median-priced SFA home in North San Diego County in in February 2013, and 71 percent were able to afford the median-priced SFA home in non-North County zip codes.

Check out entire article to see what you can afford at the HomeDex^TM Report

Buying a home takes preparation and it is important to make sure you are ready to make the commitment to buy a home.

The Lawhead Team would like to share some helpful ways to know if you are ready to buy a home:

• You’ve created a budget – When you own your own home, money management is a must. There will be unforeseen expenses and emergencies you will have to fork up money for. If you haven’t started a budget yet, start it now and make sure to use it!
• Save up for a down payment – For a conventional loan, you will need to save up 20% of the cost of the home. If you plan to buy a $400,000 home, you will need to have $80,000 saved up. If you haven’t started saving yet, start now!
• You can show a solid proof of steady income – It is important to make sure you will be able to not only afford the monthly mortgage payment, but also the extra little expenses that come with home ownership.
• You’ve created an emergency savings fund – This is on top of your down payment savings you’ve built up. Say a serious illness happens or an unexpected layoff. You will still be able to survive for a few months while you are unable to work because of your emergency fund.
• Your credit report looks good – Good credit history will help you get a lower interest rate on your mortgage while lowering your monthly payment. Check out your credit report to make sure there aren’t any incorrect marks before you go to buy your home.
• You can stay in the home for at least three to five years – That is usually how long you’ll have to keep the home in order to recoup any buying and selling costs. If you aren’t sure how long you can stay in the home you may want to wait to buy  a home and rent for a bit until you know where you’ll be for three to five years.

If you are renting and are on the fence about buying a home in 2014, continue reading!

If you are considering purchasing a home in North County San Diego, call The Lawhead Team if you want a professional and extremely knowledgeable team on your side!

Here are some benefits to owning rather than renting a home:

Forced Savings – When paying your mortgage, homeowners are putting money away into their house which they own, instead of paying for someone else’s mortgage if they were to rent.  If you sell your home and your home is worth more than when you bought it, there is a good chance you will walk away cash in your pocket from equity of the home.

Second Line Of Income – If you have a separate entrance, extra driveway space, etc, you can rent that area out.  In some areas, homeowners even rent out small patches of grass for people who want to grow vegetables.

Energy Efficiency – There are many ways you can make low cost improvements within your home to save on monthly utility bills when you buy.  You can add solar panels, install an energy efficient roof or upgrade your air conditioning unit to save overall in utility bills.

Customize Your Area – No need to get approval from your landlord to knock down a wall and make a larger master bedroom.  When owning your home, you have the freedom to do whatever you’d like to change and improve your home.

No Landlord – Sometimes when renting the landlord may be forced to evict you should he sell the home, rent to someone else or otherwise end the lease.  If you have a fixed income, in particular, homeownership is the way to go, especially if you plan to stick around for a while in that area.

Ready to buy your new home?  Contact The Lawhead Team to get started!