Crowdfunding- should it be done to buy a house? Should Buyers Crowdfund Their Way Into Homeownership?
In recent years, crowdfunding has become a popular way to pay for a remarkably wide range of ventures. Want to back a sliced-ketchup product, a self-serve cocktail machine, or maybe a charity race? Just pull out your smartphone. But more recently the technology has been moving a bit closer to home—right up, in fact, to your doorstep. Crowdfunding is becoming an increasingly popular way for aspiring home buyers to tap into their networks to come up with down payments.

A new wave of crowdfunding platforms, like Kickstarter for real estate, could be a game changer for younger, tech-savvy generations of home buyers saddled with student loan debt. It’s an idea that is gaining traction, with sites such as HomeFundMe and Feather the Nest, which helps folks raise money for down payments and repairs, and online registries such as HoneyFund, which includes the option of gifting a down payment contribution.crowdfunding to buy a home

“The No. 1 challenge that we hear from millennials in terms of their ability to buy a home is the down payment,” says Jonathan Lawless, vice president of customer solutions for Fannie Mae. “Crowdsourcing is an interesting new way that a person can generate a down payment, one made possible by technology. … We think there is a great future for it.”

Users who are typically pre-qualified for a mortgage can create personal pages on these platforms, on which they can talk about their journey toward homeownership, illustrated with photos and maybe video. These pages can be shared with family and friends.
“[Many] people find they can afford [mortgage] payments, but not the down payment to own a home,” says Christopher George, CEO of CMG Financial, a San Ramon, CA–based mortgage banking firm that launched HomeFundMe late last year.

George, a father of four millennial sons, came up with the idea for HomeFundMe in 2016 after seeing the financial struggles of his kids’ generation. The crowdfunding platform is the only one of the bunch designed solely for down payments and is the first to be backed by mortgage industry giants Fannie Mae and Freddie Mac.

“We’re talking to millennials saying their social network is their net worth,” George says. “Why not allow your sphere of influence [to] help as well?”

What you need to know about a crowdfunded down payment
Using gifted funds for a down payment can be tricky—mortgage lenders typically require a letter from the giver, specifying that the money is a gift, not a loan, and there are no strings attached. But using an online fundraising platform can allow buyers to bypass some of that red tape.

Using HomeFundMe, anyone can give up to $7,500 to a campaign without documentation. HomeFundMe also doesn’t charge fees to use the platform, or take a cut of what’s raised. The company will even give buyers $2 for every $1 they raise, up to $1,000, or up to 1% of the purchase price if they undergo home buyer counseling beforehand. Buyers who earn less than their area’s median income can earn up to $2,500, or 1% of the home price.

So what’s the catch? Crowdfunders must get their mortgage through HomeFundMe’s parent company, CMG Financial. They have to close on a home within a year of accepting their first gift. And if they don’t use the money to buy a home, funds marked “conditional on the recipient purchasing a home” are returned to the donor. The crowdfunder can keep the rest.

Other crowdfunding platforms have slightly different business models.

The online gift registry Feather the Nest has helped about half of its 3,000 “nesters” raise down payments since it launched in 2014, according to company officials.

Fees include a 5% transaction fee that goes to Feather the Nest, and a fee of 2.9% plus 30 cents that goes to its payment processing system, Stripe.

At HoneyFund, another online registry, about 6% of the 100,000 mostly millennial couples who use the site each year ask for down payments, according to company officials. There are no fees to use the platform, but users are charged 2.8% processing fees plus 30 cents per gift when the money is moved into their PayPal or WePay accounts.

“A lot of couples are not only saving for their home down payments but also home improvements,” HoneyFund CEO Sara Margulis says.

The dangers of crowdfunding your down payment
However, there are risks to buyers relying on crowdfunding to come up with money for a home.

“If somebody is not able to save for their own down payment, it might be because they are stretched financially. But it [also] might be that they are bad at saving,” says Fannie Mae’s Lawless. “The ability to generate savings is a critical aspect of being a responsible homeowner.”

Remember, it was homeowners who couldn’t really afford their homes that led to the financial crisis just over a decade ago. So helping more people who haven’t mastered the art of saving, or who may be so financially stretched that they can’t afford to save, is worrisome.

It’s “a very risky proposition,” says Rick Sharga, executive vice president at Carrington Mortgage Holdings, a real estate company in Aliso Viejo, CA. These kinds of buyers may be “one unexpected car payment, one roof repair, one water heater replacement away from missing a mortgage payment and possibly going into a downward cycle they can’t recover from.”
Article taken from Realtor.com

When you are ready to buy a house, contact us, here at Dupont Real Estate.

Privacy is important to the homeowner.

Don’t underestimate the power of privacy. Homebuyers say that privacy and having a space that is solely their own is the leading goal of homeownership.

In a recent survey of homebuyer preferences on Realtor.com, privacy even nudged out the much more practical desire of finding a space that addresses family needs. Privacy becomes increasingly important as buyers age up.

Other big reasons to buy a home: stability, financial investment and physical comfort. Many are also looking to buy simply because they are sick of their current home.privacy

As for the architectural details: Ranches are the most popular style of home (and were dubbed the favorite of 42 percent of respondents—by far, the top choice), the kitchen is the most important part of the home (80 percent say so), and most people are looking for that sweet spot of a three-bedroom, two-bathroom configuration.

While most of these preferences held true through multiple age groups, the 35-to-44 range showed slight variations. They were less interested in the ranch style home, and were more prone to requesting four bedrooms, likely because they have growing children.

The most searched attributes at Realtor.com were large backyards, garages and updated kitchens.

When you are ready to buy a home, contact us here at Dupont Real Estate. We are one of the most experienced realtors in the Charlotte area.

Shop for Loans

Shop for Loans- it is possible

Over 50% of home buyers don’t shop for loans to find the best interest rate for their mortgage.

While a buyer would rarely purchase the first home they look at, they will accept the rate and terms offered by only one lender. While the borrower and the property affect the rate and terms that a lender may offer, not all lenders offer the same terms and rates to the same buyer. Shop for loans- before choosing a mortgage loan- Charlotte realtor tips

I advise my clients that shopping around to compare rate and terms for a mortgage is a reasonable exercise considering that a half percent less interest rate could not only lower the payment but the cumulative interest that is paid while that loan is outstanding. Remember to shop for loans before making your decision

When you are ready to buy or sell your home, contact one of the most experienced Realtors in town- Dupont Real Estate.

(Taken from crs.com)

Before selecting a real estate agent or buying a home, most consumers head to the Internet first. Researching homes and real estate agents online can get you ahead of the game when it comes to narrowing down your options. But with so many sites and sources to choose from, an online search can be exhausting…and sometimes futile. Here’s a guide to help you navigate the web when searching for a home or real estate agent.

When searching for a real estate agent: While a referral from a trusted friend or colleague is a great way to find an agent to work with, be sure to dig deeper. Search for the suggested agents on social media sites like Facebook and Twitter and find out more about them. This will help you get a feel for who they are as a person and how they conduct business, including how they use social media to market homes. Another way to find an agent to list your home is to look at properties on the market in your area. Find homes similar to the one you are trying to sell and search for those agents online—they’ll usually have a personal website. Once you’ve narrowed down potential agents, be sure to meet with them in person and ask specific questions related to your needs.

The online open house never closes: All major real estate brokers have websites that showcase their listings. You can search by town, price range, number of bedrooms, etc. Also use the search tools available through major home listing portals. YouTube is also a new way to search for homes. These digital open houses give buyers a good sense of what the house looks like…and they’re open 24/7.

Do your homework: To ensure you won’t be disappointed or become emotionally invested in a new home for sale that is out of your price range, get pre-approved for a mortgage loan. The last thing you want to do is fall in love with a property and realize that you can’t afford it. Online mortgage calculators can help you get a sense of what you can realistically afford. When you are ready to buy or sell your home, contact Dupont Real Estate. We are here for you.

Source: AOL Real Estate

Your next home purchase should be a good decision.

With the hustle and bustle of trying to find a new home, the last thing you want to worry about is saving money when it actually comes time to buy. Use the following tips to save money on your next new home.

Always Use a Real Estate Agent
One of the biggest mistakes people make is trying to purchase a home without a licensed real estate agent. Not only can an agent help with paperwork, but they’ll also know how to negotiate the price using fair market value, the actual condition of the home and other various factors.

Try Not to Pay PMI

Also known as private mortgage insurance, this is tacked on to your monthly payment if you buy a home with less than a 20 percent downpayment. Some lenders will still offer standard mortgages with smaller downpayments, but they’re increasingly hard to find. Save money by trying to save at least 20 percent for your home, or purchase a home that fits into a slightly smaller budget.

Find Better Insurance Rates
Similar to auto insurance and health insurance, monthly property insurance premiums vary depending on the company that underwrites the policy. Spend time shopping around to different insurance companies until you find the one that offers an affordable rate and sufficiently covers your property.

There are a variety of methods consumers can use to save money, both upfront and during the course of their mortgage. To avoid financial issues in the future, always purchase a home that is within your set price range and never buy a home with zero money down; doing so will make it much harder for you to borrow against the property in the future.

Millennials Search for Unconventional Down Payment Funds, but at What Cost?

down payments are getting more difficult- advice from your Charlotte realtorDown payments are important.  Rising home prices are standing in the way of millennials who want to buy their first home; however, these challenges are being overcome via some unconventional methods. Millennials are getting creative and finding sources for their down payment by any means necessary. But are these methods hurting the millennial generation financially?

Down payments by borrowing from family: Sure, gifted money doesn’t sound bad. But what if the families don’t have the cash to give? Instead, buyers are asking that their parents’ home be refinanced, using the home equity as a way to fund their own home purchase.

Of course, this can be beneficial in multiple-offer situations to get a competitive edge with an all-cash offer, but borrowing from a relative can go south fast. Not being able to pay a bank back can have repercussions like lowering a credit score, but missed payments to a relative can damage familial relations. Is it worth the risk?

Down payment through crowdfunding: There are new crowdfunding platforms being introduced every year, and more of them are tapping into the real estate industry. This can be a great way to amass gifted money from friends and family, but not everyone may see it that way. Instead of crowdfunding for their honeymoon, newlyweds are asking their wedding guests to donate toward their first home.

This method can get complicated in the lending world. Buyers will need to look into gifting regulations before accepting any gifted money.

By Liz Dominguez

charlotte real estate is expected to soar into 2018

Home Sales will Soar

Home sales are all the news. By now just about every would-be buyer out there knows there simply aren’t enough homes for sale these days to appease the hordes of competition. But despite the shortages, rising prices, and bidding wars, more homes are expected to be sold this year than in more than a decade.

In 2017, the number of sales of existing homes (which have previously been lived in) is expected to rise about 3.5%, to 5.64 million, according to the midyear forecast from the National Association of Realtors®. The group predicts that existing-home purchases will rise an additional 2.8% in 2018, to 5.8 million.

“The combination of the stock market being at record highs, 16 million new jobs created since 2010, pent-up household formation, and rising consumer confidence are giving more households the assurance and ability to purchase a home,” NAR Chief Economist Lawrence Yun said in a statement. “However, prices are still rising too fast in many areas and are outpacing incomes.”

Sales of brand-new homes, which builders can’t seem to put up fast enough, are expected to jump 10.7%, from 560,000 in 2016 to 620,000 this year, according to NAR. They’re expected to rise an additional 8% in 2018, to 670,000 sales.

New homes are typically more expensive than existing homes, as builders must contend with shortages of land and labor, plus rising costs of materials and difficulty obtaining financing.

home sales- what buyers need to know

The price tags of all homes are expected to keep rising. NAR predicts prices will jump 5% in 2017 and an additional 3.5% in 2018.

“As a result, buyers are compromising on the number of rooms, length of a commute, or other home qualities,” says Senior Economist Joseph Kirchner of realtor.com®. “Meanwhile, builders are mostly building for the mid- to upper-price range. This mismatch in supply and demand is making affordability more acute for those with modest incomes.”

In some white-hot markets along the coasts, prices are rising by double digits because of the dearth of homes. That’s led many current homeowners who might be interested in trading up to a larger, nicer home in their area to hold off—because those homes are simply out of their price range.

Bidding wars have gotten so bad in Seattle that buyers are driving up prices 30% over asking in some cases, says local real estate broker Chris Bajuk, of HomeSmart Real Estate Associates. (Seattle prices were up 12.2% year over year in February, according to the latest S&P CoreLogic Case-Schiller report.)

“It is crazy,” Bajuk says. “There’s strong demand and lack of supply.”

Buyers are coping by putting ever-higher percentages of their incomes toward homeownership—even when it means eating at home every night and doing without new clothes or annual beach vacations. Sometimes they’re spending half of their take-home pay on housing, he says.

Others are purchasing homes farther from the city center where they work, settling for smaller homes or even purchasing residences in need of some work.

“They may need to spend more of their disposable income,” Bajuk says. “Or they may need to lower their expectations on what kind of home they get.”

Source

At Dupont Real Estate, we know our community and we know our market. We are your Real Estate Resource. If you are looking to buy or sell a home in Lake Norman, Charlotte, or surrounding areas anywhere in NC, SC, or VA. We are here to assist you! Contact Us.

When to buy a house?

Best time to buy a house is NOW
17:02 EDT, July 11th, 2013

WSJ – now is the best time to buy a house

The Wall Street Journal’s third-quarter survey of housing-market conditions in 28 of the nation’s largest metropolitan areas found that home values declined in all but five markets compared with the second quarter, according to data from Zillow Inc. Meanwhile, rent levels have risen briskly across the country and mortgage rates, hovering around 4%, are the lowest in six decades. As a result, monthly mortgage payments on the median priced homeincluding taxes and insuranceare lower than the average rent levels in 12 metro areas, according to data compiled for The Wall Street Journal by Marcus & Millichap, a real-estate brokerage that tracked 27 metro areas. It remains less expensive to rent than to buy in 15 cities. In Atlanta, which had the most favorable values for owning versus renting, the monthly payment on the average home was $539 assuming a 20% down payment during the third quarter. By contrast, the average asking rent stood at $840, according to the Marcus & Millichap data.

Other cities where owning is now cheaper than renting include Detroit, Minneapolis, Orlando, Las Vegas, Miami, St. Louis, Chicago and Phoenix. Home ownership is also looking more affordable because after several years of declines, apartment rents will rise by around 4% this year, says Mr. Nadji. He says rents are poised “to pick up even more momentum across the country next year.” Even cities where it is still cheaper to rent than own have seen big boosts in affordability. In San Diego, the monthly cost of owning a home has averaged around 83% more than renting over the past two decades. During the third quarter, owning was 22% more expensive than renting, according to John Burns Real Estate Consulting.

Mortgage rates are a big reason why affordability continues to improve. In 1991, a $1,700 mortgage payment allowed a borrower to take out a $200,000 mortgage. Today, it gets that homeowner a $350,000 loan, a 77% increase in borrowing power, says Dan Green, a loan officer with Waterstone Mortgage, in Cincinnati.

Affordability could continue to improve as prices slide even lower in coming months. Price declines are likely because the share of “distressed” sales, including bank-owned foreclosures, tend to rise in the winter, when traditional sales activity cools. Banks are often much quicker to cut prices to unload properties quickly, which means that the greater the share of “distressed” sales, the more prices tend to fall.

One hopeful sign that it’s time to buy a house is that inventories have fallen from their bloated levels of one year ago. All 28 cities in The Wall Street Journal’s latest survey saw homes listed for sale fall from one year ago, when markets were reeling with a substantial overhang of properties amid a big drop in demand. Visible inventory was down sharply in several markets, including by almost half in Miami and 40% in Phoenix. Low inventories have spurred more bidding wars at the low end of the market as investors compete for homes that they can convert into rentals. In Sacramento, it would take just 2.5 months to sell the listed inventory at the current sales pace. Las Vegas has a 4.3 month supply of inventory, according to John Burns Real Estate Consulting. But the potential supply of homes is much bigger because banks have yet to process hundreds of thousands of potential foreclosures.

Black Friday sales boom

Sales rose an estimated 6.6% to a record $11.4 billion on Black Friday, typically the busiest shopping day of the year for Americans, while the traffic at stores rose 5.1%, according to ShopperTrak. The day’s sales growth was the strongest percentage gain since 2007, when sales rose 8.3% on the day after Thanksgiving, said Ed Marcheselli, chief marketing officer at ShopperTrak, which monitors retail traffic. As usual on Black Friday, retailers used deep discounts on popular items such as toys and televisions to lure shoppers as the holiday shopping season began. Some started sales as early as Thanksgiving night to get a jump on their rivals. While the Black Friday rise was a “positive indicator for the holiday season,” Marcheselli cautioned it is just one day. ShopperTrak has estimated that sales for all of November and December will rise about 3 to 3.3%.

The National Retail Federation, an industry trade group, expects

152 million people to hit stores this weekend, up 10.1% from last year. But it expects sales for the full November-December holiday season to rise just 2.8%, well below the rise of 5.2% in 2010.

DSNews.com – mortgage rates down

The 30-year fixed-mortgage rate has averaged at or below 4% for four consecutive weeks now. For the week ending November 23, Freddie Mac’s study puts the average 30-year rate at 3.98% (0.7 point). That’s down from 4.00% the week prior. The only time Freddie has recorded a lower 30-year rate average was for the

week of October 6, 2011, when it came in at 3.94%. The 15-year

fixed-rate mortgage posted an average of 3.30% (0.7 point) in Freddie Mac’s latest survey. It was 3.31% last week. The 5-year ARM is averaging 2.91% (0.6 point), down from 2.97% last week. The 1-year ARM slipped from 2.98% to 2.79% (0.6 point) this week. Rates for both ARM terms are the lowest ever recorded by the GSE. “Mortgage rates eased slightly this week with fixed-rate loans hovering above all-time lows and ARMs reaching a new nadir,” commented Frank Nothaft, Freddie Mac’s chief economist. He says the high-degree of home-buyer affordability in recent months translated into a 1.4% pickup in existing home sales during October, as measured by the National Association of Realtors. Nothaft noted, however, that the trade group also reported a sharp increase in contract cancellations in October, with a third of its members seeing at least one contract fall through during the month. This “restrained sales from achieving a stronger rebound,” according to Nothaft.

Morgan Stanley cuts growth forecast

The continuing uncertainty over debt troubles in Europe and the US has increased the downside risks to global growth, according to Morgan Stanley. The bank downgraded its forecast for global growth next year to 3.5% from 3.8%, just three and a half months after it cut its forecast from 4.5%. “Our economics team in Europe now expects a recession in Europe while the US economy is expected to continue growing below its trend,” said Morgan Stanley. It also cut its 2012 growth estimate for Asia ex-Japan to 6.9% from 7.3%. “Since we downgraded our regional growth outlook in August 2011, we have been constantly worried about the increasing downside risks to growth. In addition to further evidence of weakening domestic demand, the external environment in Europe has made us more concerned about the region’s growth outlook,” economists at Morgan Stanley said in a research note today.

Even Asia, which has so far escaped the global slowdown is likely to be dragged down, according to Morgan Stanley. The bank noted that the regions’ deep trade and financial linkages with the rest of the world made it vulnerable to deep shocks in the global economy. “The prospects of further fiscal tightening and weaker domestic demand in Europe will translate into weaker external demand growth for the region,” it said. “The slowdown in final demand in the developed world will likely be amplified on the region’s cross-border production network, leading to a significant slowdown in export growth across the region in 2012.”

Morgan Stanley noted this was already starting to happen. Asian exports, which “have been flat on a sequential basis since Mar 2011, have also begun to decline on a sequential basis in the last two months.” Asia’s domestic indicators, such as auto, retail and property sales as well as manufacturing activity (PMI) were also pointing to a deceleration, the bank said.

Home prices to fall another 6%? Buy a house now

Analysts with JPMorgan claim home prices will fall another 4% by year-end, resulting in a 35% peak-to-trough decline once a bottom is reached. When looking at just non-agency residential mortgage-backed securities, the report says “market volatility, lack of liquidity and stagnant fundamentals” will remain drags on the entire segment in 2012. In non-agency residential mortgage-backed securities, the authors also noted slowing activity on the modification front. “We continue to recommend fixed-rates and select seasoned hybrids,” the report said. The JPMorgan report also is careful when forecasting the performance of commercial mortgage-backed securities in 2012. “Our outlook for 2012 is cautiously optimistic, as market conditions continue to weigh on what we believe remains cheap fundamental credit risk. Private label and agency CMBS supply should reach $35 billion and $32 billion, respectively,” the report said.

At Dupont Real Estate, we are market experts. Let us be your experts when buying or selling a home in the Charlotte or Lake Norman area. Rest easy knowing you have our guidance and experience in the real estate market.

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