Key Savings Goals When Purchasing a HomeKey Savings Goals When Purchasing a Home

Buying a home can feel overwhelming, especially when it comes to budgeting—but it doesn’t have to be. By understanding the upfront costs you may encounter, you can approach the process with confidence. Here are three key expenses experts recommend factoring into your budget: 1. Down Payment Your down payment is often the first thing you think of when saving for a home. But how much do you really need? Contrary to popular belief, you don’t always need to put down 20%. Depending on your loan type and financial goals, some options may require as little as 3.5% or even 0% down. As The Mortgage Reports explains: “The amount you need to put down will depend on a variety of factors, including the loan type and your financial goals. If you don’t have a large down payment saved up, don’t worry—there are plenty of options available…” A trusted lender can guide you through loan options, down payment requirements, and potential assistance programs to help you plan effectively. 2. Closing Costs Don’t forget to budget for closing costs, which include fees for services such as appraisals, title insurance, and loan underwriting. According to Bankrate: “Mortgage closing costs are the fees associated with buying a home that you must pay on closing day. Closing costs typically range from 2% to 5% of the total loan amount.” Your lender can provide detailed estimates and answer any questions so you’re well-prepared. Additionally, plan for your real estate agent’s professional service fee, which may or may not be covered by the seller. 3. Earnest Money Deposit An earnest money deposit shows the seller you’re serious about buying their home. Typically 1%–2% of the home’s purchase price, this deposit is applied to your down payment and closing costs if your offer is accepted. As Realtor.com describes: “It tells the real estate seller you’re in earnest as a buyer...earnest money funds go toward the down payment and closing costs.” While not mandatory, an EMD can strengthen your offer. Your real estate advisor can help you determine whether it’s necessary and how it fits into your overall plan. By working closely with trusted professionals, you’ll gain the knowledge and support you need to navigate these expenses and make confident decisions on your journey to homeownership. Bottom Line The cornerstone of a successful homebuying savings strategy lies in being well-informed about the expenses you’ll encounter along the way. When you have a clear understanding of what to expect, you can create a plan that aligns with your financial goals and minimizes surprises. By working closely with an expert real estate agent and a trusted lender, you’ll gain valuable insights into the process, from navigating down payments and closing costs to exploring assistance programs that may be available to you. This partnership empowers you to make informed decisions and approach your homebuying journey with confidence, ensuring that you’re well-prepared every step of the way.

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Mortgage Forbearance: A Lifeline for Homeowners in Tough Times

Life can be unpredictable. From job losses to unexpected expenses or natural disasters, financial struggles can impact anyone. But here’s some good news: if you’re a homeowner feeling the pinch, you still have options. One powerful yet often overlooked tool is mortgage forbearance. What Is Mortgage Forbearance? Mortgage forbearance allows borrowers to temporarily pause or reduce their mortgage payments during a short-term financial crisis, such as unemployment, illness, or other unexpected setbacks. As explained by Bankrate: “Mortgage forbearance gives borrowers a chance to pause or lower their payments, providing them time to sort out their finances and regain stability.” While many associate forbearance with relief programs during the COVID-19 pandemic, it’s important to note this option remains available for qualifying homeowners facing financial challenges today. Forbearance can help prevent delinquency and even foreclosure, making it an essential safety net for those in need. The Current Landscape of Mortgage Forbearance Forbearance continues to be a crucial resource for homeowners navigating temporary hardships. Though there has been a slight uptick in forbearance rates recently, it’s essential to understand the broader context. According to Marina Walsh, Vice President of Industry Analysis at the Mortgage Bankers Association (MBA): “The overall mortgage forbearance rate increased three basis points in November and has now risen for six consecutive months.” While this trend might seem worrisome, historical data offers a clearer perspective. A closer look at the numbers shows how forbearance remains a critical tool for supporting homeowners through life’s unexpected challenges. While the percentage of mortgages in forbearance has dropped significantly since its peak in mid-2020, there has been a slight uptick in recent months. This increase is primarily linked to the aftermath of two recent hurricanes, Helene and Milton. Natural disasters like these often cause temporary financial hardships, making mortgage forbearance a critical safety net during the recovery period. In fact, 46% of borrowers currently in forbearance cite natural disasters as the reason for their financial struggles. If you or someone you know is struggling to make mortgage payments, the first step is to contact your mortgage lender. They can guide you through the process, explain your options, and help you apply for forbearance. Remember, forbearance isn’t automatic—you must initiate the conversation and agree on terms with your lender. The Importance of Forbearance Mortgage forbearance plays a vital role in helping borrowers avoid the cycle of missed payments and potential foreclosure. It offers temporary relief, giving homeowners the time and space they need to address their challenges and plan their next steps. Fortunately, most homeowners today benefit from strong equity and a stable housing market, so forbearance is not a necessity for the majority. However, it remains an essential option for those facing financial difficulties. If you or someone you know is struggling to make mortgage payments, the first step is to contact your mortgage lender. They can guide you through the process, explain your options, and help you apply for forbearance. Remember, forbearance isn’t automatic—you must initiate the conversation and agree on terms with your lender. Bottom Line In challenging times, understanding your options can provide much-needed peace of mind. Mortgage forbearance is more than just a financial solution — it’s a lifeline for those facing hardship. While recent headlines about rising forbearance rates might seem alarming, the reality is that this tool is doing what it’s designed to do: supporting homeowners in need and helping them navigate tough circumstances without the fear of losing their homes.

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2025 Housing Market Predictions from Experts

Are you wondering what the housing market holds this year and how it could impact your plans to buy or sell a home? The best way to stay informed is by turning to the experts. Housing market forecasts are constantly evolving, and here’s the latest update on two key factors expected to influence 2025: mortgage rates and home prices. What’s Happening with Mortgage Rates? Mortgage rates remain a hot topic, with everyone eagerly anticipating a decline. The big questions are: how much will they drop, and how soon? The good news is that mortgage rates are projected to ease slightly in 2025. However, a return to the historically low rates of 3-4% isn’t on the horizon. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains: "Will we go back to 4%? According to my forecast, unfortunately, no. It’s more likely we’ll see rates around 6%." Other experts share a similar outlook, predicting mortgage rates will stabilize in the mid-to-low 6% range by year-end. Keep in mind that forecasts can change as new data becomes available. Expert predictions are based on current information, but factors like inflation and broader economic conditions will continue to influence where mortgage rates go. This means fluctuations are likely. Instead of trying to time the market or fixating on exact numbers, focus on the overall trend and what you can control. Partnering with a trusted lender and real estate agent will ensure you stay informed with the latest updates and insights tailored to your situation. Even a slight decrease in rates can make a meaningful difference in your future mortgage payment, and with expert guidance, you’ll be well-prepared to navigate the market. What About Home Prices? Will home prices drop in 2025? The short answer: probably not. While mortgage rates may ease, home prices are expected to continue rising, albeit at a slower and more sustainable pace. According to expert forecasts, home prices are projected to increase by an average of around 3% next year, with most predictions falling within the 3-4% range. This represents a return to more typical, manageable price growth (see graph below). Don’t expect a sudden price drop if you’re planning to buy a home this year. While that might feel discouraging if you’re hoping for a major deal, here’s the upside: the rapid price increases of recent years have cooled, giving you a more stable market to navigate. Plus, any home you purchase is likely to appreciate in value over time, which is a long-term win. If you’re wondering why prices are still climbing, the answer lies in supply and demand. While there are more homes for sale now compared to last year, it’s still not enough to meet buyer demand. As Redfin explains: "Prices will increase at a pace similar to the second half of 2024 because we don’t anticipate enough new inventory to meet demand." Remember, the housing market varies by location. Some areas may see higher price increases, while others might experience flat or slightly declining prices if inventory grows locally. However, in most markets, prices are expected to rise as they typically do. For the most accurate insight into what’s happening in your area, connect with a real estate agent who can break down the latest trends and show you what they mean for your specific goals. Bottom Line The housing market is constantly evolving, and 2025 will bring its own set of changes. With mortgage rates expected to ease slightly and home prices rising at a steadier, more sustainable pace, the key is to stay informed and create a strategy that suits your needs. Connect with a local real estate expert to get the latest updates on your area and personalized guidance to help you make a smart and confident move.

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