Tax-Free Accounts for Homes
Source: The New York Times
A coalition led by Smart Growth America of Washington is calling for policy that would allow Americans to have a tax-exempt account to save for the down payment on a mortgage, just like tax-free savings accounts for health care and college tuition. Proponents suggest it would encourage Americans to start saving earlier for a down payment and closing costs. Pretax contributions could be made to such an account for up to 10 years.
Read the full story.
Click Here to find a new home and put that Down Payment to good use.
Asking Mom and Dad for Cash to buy that Home
Source: Wall Street Journal
Loans from family members could go the extra mile in making a down payment, but financial experts say parental help is most useful when it comes as a gift rather than a loan during the mortgage application process. A family loan may not be viewed favorably by a lender and could lead to disqualification for a mortgage since the loan is considered unsecured debt. Read the full story.
Click HERE to find out what your home is worth in today’s market.
For Buyers, only the most fit will survive and succeed in purchasing a home – those with excellent credit and a sizeable down payment can compete with Investors paying all cash. According to C.A.R.’s 2013 Home Buyer Survey, 96% of buyers use the internet to find a home and 70% of those use their smartphones to do so. Not a laptop, not an i-Pad…. their phone. That is a significant change in how buyers shop for homes. Other factors Buyers will face in order to compete include:
- Tighter lending standards with 85% of buyers obtaining 30-year fixed loans (they have to put more “skin” in the game than before)
- Higher Down payments; the average is now 25%
- Rising interest rates
- It takes longer to find a home due to lower inventory of houses on the market ( average of 9.8 weeks)
- Instant Text notifications from Listing sites allow buyers to “jump” on a new listing before others,
- In multiple offer situations you will need to add a “cover story” page to your offer that makes you unique and appeals to the Seller’s emotional side.
Yet there is good news on the horizon. As the number of lower-priced homes available on the market begins to decline, Buyers will find the competition leveling out as Cash Investors rarely delve into properties that are priced over $500k.
Click HERE to watch a video on “What you DON’T want to do before you Buy that Home.”
Register Here for our FREE Home Buying Class the second Saturday of every Month.
CA BRE # 01929144