East Tennessee Real Estate & Neighborhood Source
UNDER CONTRACT! How would you like to live on your own acre, surrounded by a 12 acre farm in a beautifully renovated home with a gorgeous kitchen? Here’s your chance!
For more information or to schedule a private showing contact me, Troy Stavros with CornerStone Realty Associates at 865-999-0925.
When you get a mortgage in Knoxville, there are several options you can choose from, including FHA, VA, USDA, and conventional mortgages. And the one you pick will determine how big of a down payment you’ll need, what credit score you should have, and all the other requirements you’ll need to meet, as well.
But choosing the right type of mortgage can be difficult — especially if you’ve never bought a home before.
Are you confused about your mortgage options? Maybe need dome help deciding which program is the best fit for your upcoming home purchase? Here are your choices:
FHA mortgages are insured by the Federal Housing Administration. They allow for lower credit scores than most other loans. In fact, with some lenders, you may be able to get approved with a credit score as low as 500 (as long as you make at least a 10% down payment).
The one caveat with FHA loans is that they require a Mortgage Insurance Premium both at closing and as part of your monthly payment. The exact cost of this varies based on your loan balance and down payment.
Minimum down payment: 3.5%
Minimum credit score: 500 to 580, depending on down payment size
Who they’re best for: First-time homebuyers, low-credit score buyers
VA loans are mortgage loans that are guaranteed by the Department of Veterans Affairs. Only homebuyers who are military veterans, current military members or their spouses can qualify for a VA loan. Applicants also need to meet certain service requirements, as well as obtain a Certificate of Eligibility from the VA.
VA loans come with some of the lowest interest rates around, and there are also no minimum credit score or down payment requirements.
Minimum down payment: Zero
Minimum credit score: None
Who they’re best for: Veterans, military members, spouses of veterans and military members
USDA loans are mortgages backed by the U.S. Department of Agriculture. They’re reserved for buyers in more rural parts of the country, and they’re only available in certain areas. Borrowers also need to fall under the set income threshold for their community. Like VA loans, USDA loans require no down payment. You can search for the eligibility of a particular address here: https://eligibility.sc.egov.usda.gov/eligibility/ If you don’t want to go through the hassle of searching every home we can set you up on a search that shows you only homes in areas that are eligible for USDA loans.
Minimum down payment: Zero
Minimum credit score: Typically 640, though it varies by lender
Who they’re best for: Rural homebuyers, low-income buyers, buyers who have no down payment savings
Conventional mortgages are loans issued without any government insurance or backing, like those mentioned above. Because of this, lenders tend to be more strict about which borrowers they’ll approve for these loans.
Typically, conventional mortgages require higher credit scores than other mortgage options, though it varies by lender. The minimum down payment is just 3%, but if you go that low — or make any down payment under 20% — you’ll typically have to pay for Private Mortgage Insurance. Unlike the mortgage insurance on FHA loans, PMI is cancellable after you’ve paid off enough of your loan.
Minimum down payment: 3%
Minimum credit score: Typically 620, though it varies by lender
Who they’re best for: Buyers with good credit
If you’re still not sure whether an FHA, VA, USDA, or conventional mortgage is the best fit for your home purchase in Knoxville, talk to a loan officer or mortgage broker in your area. They can help point you toward the best option for your budget and goals. We’re happy to recommend some excellent mortgage professionals so just give us a shout!
Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today!
![The Path to Homeownership [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2020/12/02204938/20201204-MEM-1046x2259.png)
Ready to get the process started? Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today!
In a year when we’re learning to do so much remotely, homebuying in Knoxville is no exception. From going to work to attending school, grocery shopping, and even seeing our doctors online, digital practices have changed the way we live.
This year, rather than delaying their home purchases, buyers in Knoxville and nationwide – alongside their trusted real estate professionals – turned to the Internet to do more than just a typical home search. In some cases, they bought homes without even stepping foot inside (we’ve had clients do just that as well as buyers of our listings). Jessica Lautz, Vice President of Demographics and Behavioral Insights at the National Association of Realtors (NAR), says:
“People really didn’t buy houses sight-unseen, traditionally. It’s still not a huge number, but it has gone up, and we have definitely seen that trend accelerate.”
According to NAR, throughout the coronavirus pandemic, one in every 20 homebuyers purchased a house sight-unseen.
Today, some real estate professionals, like myself, are using digital practices to help homebuyers and sellers walk through many steps in the process virtually. While following the regulations set forth by the CDC and all local guidelines, this year, we were able to quickly empowered buyers and sellers with virtual tours, video tours, 360 degree walkthrough tours, high-quality photos, videos, online open houses, and more. For those who had homebuying and selling needs in 2020, trusted advisors made it possible in many markets.
Here’s a graph showing some of the digital options buyers found most helpful in their searches this year, as noted by NAR in the 2020 Profile of Home Buyers and Sellers: The report also mentions that buyers this year generally searched for eight weeks. Throughout that search, they viewed a median of 9 homes, but not all of them were seen in-person. Yahoo Finance notes:
“Buyers viewed five homes online and four homes in-person during the pandemic, compared to nine homes in-person in 2019, according to NAR. This was the first year NAR asked buyers to specify the number of homes toured virtually.”
In true 2020 fashion, virtual practices helped buyers safely narrow down their top choices, so they didn’t have to unnecessarily walk into more homes than they needed to see throughout the process. This is actually great for both buyers and sellers as it cuts down on wasting precious time and leads to only serious buyers touring homes. Here’s the breakdown by region: At a time when health and safety are top priorities, current technology is making it possible for buyers and sellers in Knoxville to move their real estate plans forward at their own comfort levels, even through a worldwide pandemic. For many, this means buyers no longer have to physically tour every home they want to see, and sellers don’t need to open their doors over and over again throughout the process. Safety can come first, and trusted real estate professionals are here to help.
If you’re ready to make a move to or within Knoxville, you may not have to press pause on your plans this season. Let’s connect to determine the safe and effective options to buy or sell a home in our area or wherever you’re looking to move.
Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today!
Housing inventory in Knoxville and nationwide is at an all-time low. Realtor.com just reported that nationally, there are 39% fewer homes for sale today than there were last year. At the same time, buyer demand remains strong. In a recent newsletter, research analyst Ivy Zelman explained:
“Although the headwind of severe supply constraints in most markets has contributed to slight moderation in seasonally-adjusted and year-over-year new pending contract growth for two consecutive months (albeit still growing strongly), the underlying strength of buyer demand, particularly for this time of year, remains apparent.”
Whenever there’s a shortage in the supply of an item that’s in high demand, the price of that item increases. That’s exactly what’s happening in the Knoxville real estate market right now. As a result, home values are surging.
This is great news if you’re planning to sell your home in Knoxville. On the other hand, as either a first-time or repeat buyer, this may instead seem like troubling news. Purchasers, however, should realize that the price of a house is not as important as the monthly cost. Here’s how it breaks down.
There are several factors that influence the cost of a home. Two of the major ones are:
The National Association of Realtors (NAR) produces a Housing Affordability Index which takes these factors into account and determines an overall affordability score for housing. According to NAR, the index:
“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”
Their methodology states:
“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”
So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:The blue bar represents today’s affordability. We can see that homes are more affordable now than they were from:
Buying a home today is just a little less affordable than it was last year, but still very affordable compared to historical housing market trends.
Note: During the housing crash from 2009 to 2015, distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market.
The number one factor impacting today’s homebuying affordability is record-low mortgage rates. There’s no doubt that prices are on the rise. However, mortgage rates have fallen dramatically. Last week, Freddie Mac announced that the average interest rate for a 30-year fixed-rate mortgage was 2.72%. Last year at this time, the average rate was 3.68%.
If you’re considering purchasing your first home in Knoxville or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.
At this point, home purchase affordability is still in a historically good place. However, we need to watch price increases going forward. As Mark Fleming, Chief Economist at First American, noted in a recent post:
“Faster nominal house price appreciation can erode, or even eliminate, the boost in affordability from lower mortgage rates, especially if household income growth doesn’t keep up.”
Have questions or ready to get the home buying or selling process started? Call/Text me, Troy Stavros with CornerStone Realty Associates today at 865-999-0925 and let’s schedule a time to talk!
Homeownership is on the goal list for many young adults in Knoxville, but sometimes it’s hard to know exactly how to get there. From understanding the home buying process to pre-approval and down payment assistance options, uncertainty along the way can ultimately hold some buyers back.
Today, there are over 75 million Millennials and 67 million Gen Z’ers in the U.S., making up a significant number of both current and soon-to-be homebuyers. According to a recent Fannie Mae survey of more than 2,000 of these individuals:
“88% said they are confident they will achieve homeownership someday.”
In addition, the survey also reveals that for younger generations, the motivation to own a home may be more emotional than financial compared to previous generations:
Whether homeownership goals come from the heart or are driven by financial aspirations (or maybe both), the obstacles standing in the way don’t have to bring these dreams to a screeching halt. The same survey also reveals two key roadblocks for potential buyers. Thankfully, they’re both easily overcome with the power of knowledge and trusted advisors leading the way. Here’s a look at these two challenges potential homebuyers face today:
For those who want to purchase a home, low-down-payment options are instrumental to affording one sooner rather than later, especially given the amount of debt many younger adults have accumulated. Fannie Mae also notes:
“Among the challenges they face is an unprecedented amount of debt, along with a lack of understanding of the mortgage process and their own purchasing power. Debt, in particular, creates many obstacles such as a limited ability to save and the fear of taking on more debt.”
Today, there are more than 2,340 down payment assistance programs available nationwide to help relieve this pressure. Understanding what’s out there and the options available may help many buyers become homeowners faster than they thought possible. In a year like this, with record-low mortgage rates making their mark in the history books, being able to take advantage of the opportunity home buyers in Knoxville have right now is essential to long-term affordability.
While many people love to do a quick search online to find instant answers to their questions, it isn’t the only way younger generations want to consume information or build their knowledge base. As the survey mentions, having trusted professionals help them learn what it takes to achieve their dreams is definitely on their wish list too.
If you’re aiming for homeownership someday, it may be in closer reach than you think. Let’s connect so you can learn about the process and get the guidance you need to make it happen.
Call/Text me, Troy Stavros with CornerStone Realty Associates at 865-999-0925 today and let’s set up a time to talk!
