The Different Types of Mortgages

Unless you have the means to pay in cash, you’ll need to get a loan when you need to buy a home. It can be confusing, but it’s important to understand that there are many different types of mortgages a homebuyer can choose from. Thankfully, we’re here to help.

The first thing to note is that all mortgages can be broken down into two categories: conforming loans or non-conforming loans.

Conforming loans have well-defined guidelines set by the Federal Housing Finance Agency (FHFA), so there’s less variation in who qualifies for a conforming loan. The biggest difference between conforming and non-conforming loans is that a lender can sell conforming loans to Fannie Mae or Freddie Mac, so they’re less risky for the lender.

A non-conforming loan has less strict standards than a conforming loan and is available to a wider range of potential buyers. These loans let you borrow more money with a lower credit score, get a loan with no money down or borrow money if you have negative items on your credit score.

Conventional mortgages

Conventional mortgages are the most common type of mortgage; however, they do have stricter regulations regarding credit score and debt-to-income (DTI) ratio. Conventional mortgages allow buyers to put down as little as 3 percent. These are a good option for borrowers who don’t qualify for government-backed loans or who want to take advantage of low interest rates with a larger down payment.

Fixed-rate mortgages

While payment may fluctuate due to tax or insurance rates, a fixed-rate mortgage carries the same interest rate throughout the loan period. These home loans are ideal for folks who are looking to buy their forever home and who want to know how much they’ll pay each month.

Adjustable-rate mortgages

Adjustable-rate mortgages are 30-year loans that change depending on how market rates move. You’ll first have an introductory fixed rate for five, seven or 10 years. After this period ends, your interest rate will go up or down, depending on the index’s market rates. This loan might be right for you if you’re a first-time buyer who doesn’t expect to live in the house for the loan’s full term.

Government-backed loans

As the name suggests, government-backed home loans are insured by a government body. These loans are great for buyers who don’t qualify for traditional loans, but borrowers must meet specific criteria. A good example is a VA loan that’s provided through the United States Department of Veterans Affairs (VA). VA loans don’t need any down payment and have very low interest rates; however, borrowers must meet certain service requirements.

Jumbo loans

If you want a high-value property, your best bet is often a jumbo loan. These loan interest rates are like conforming mortgages, but they are more difficult to qualify for. Borrowers must have high credit scores and low DTIs to qualify.

How much home can you afford?

Figuring out how much you can afford to spend on a home doesn’t have to be a guessing game. Talk to our professionals at Carpenter Real Estate about the different types of mortgages and loans available, or use our online calculator to see what your monthly mortgage payment would be.

Nine Helpful Tips for Staging Your Home to Sell

Although it’s a sellers’ market, simply hiring a real estate agent might not be enough to sell your vacant home right now. To ensure you sell your home as quickly as possible for as much as possible, you’ll want to stage it.

Keep reading to learn a few of our top home staging tips:

  • Keep it neutral: You want to create wide appeal for a variety of buyers. One great way to do this is to paint the walls a neutral color, like beige or gray. You’ll also want to choose simple and functional furniture over antiques or anything too exotic.
  • Consider soft staging: The real estate term, soft staging, means using simple decor to stage a room—typically bathrooms or kitchens. These pieces include vases, rugs, simple artwork or other affordable items that provide color or texture without breaking the bank.
  • Don’t forget the exterior: We find that many sellers focus too much on the interior when staging a vacant home and neglect to spruce up the outside. Among other things, ensure the grass is cut, and plant flowers to catch the eye of any potential buyers driving past your home.
  • Spark an emotional tie: You’re more likely to sell your house if buyers can picture themselves in the home. For example, you can create an emotional tie by staging the dining room to allow the buyer to imagine themself sitting down to dinner with their family.
  • Add an office space: With so many people working or learning from home these days, home offices or workspaces are all the rage. One of our home staging tips is to stage a spare room like an office or set up a workstation somewhere in the house.
  • Show off your storage: Buyers may choose one house over another simply based on the amount of storage space the house has. Declutter all of your closets, and implement shoe racks and under-shelf baskets to showcase your closets’ versatility and spaciousness.
  • Make bathrooms shine: Imagine walking into a vacant home and finding dingy bathrooms—that’d be a major turnoff! Keep potential buyers interested by taking time to scrub down your bathrooms or hire a cleaning crew to tackle it for you.
  • Erase signs of pets: The folks touring your home may have pets—but that doesn’t mean they want to see or smell any evidence of your furry friends. Make sure there are no lingering pet odors or stains before you put your home on the market.
  • Stay within budget: Proper staging isn’t free. Things like buying new furniture and repainting the walls can get expensive. But don’t go overboard with spending—mind your budget, and try to find items that still look good but aren’t too pricy.

Talk to Carpenter Real Estate today

If you need help purchasing a house or staging a vacant home, contact our team at Carpenter Real Estate. With years of experience selling homes throughout the Alpine area, you can count on us to find the perfect house for you and your budget.

What to Consider When Looking for a Pet-Friendly Home

Millennials have finally become one of the driving forces in the real estate market, as they have reached a point of financial security where homeownership has become a realistic possibility. They also have overtaken baby boomers as the biggest pet-owning generation, which means these younger home buyers will frequently be looking for pet-friendly homes when browsing the market.

If you’re looking for a pet-friendly (or, specifically, dog-friendly) house, here are a few of the most important considerations to keep in mind during your search:

  • Yard: For dog owners, you’re probably going to want a yard that’s fenced in so you can let the dog out without having to worry about keeping them leashed or tethered. If you want your dog to be able to safely run free, having a fenced-in yard is the best way to do this. If you really love a home that does not have a fenced-in yard, you should add the cost of installing a fence into your estimations for the price of the house, and prioritize this as a first home improvement project.
  • Neighborhood: What is the neighborhood like? Do other people in the neighborhood have dogs? Are you on a busy street with a lot of traffic, or a quiet residential road? Do people seem outgoing and friendly, or do they mostly keep to themselves? These are issues you should consider when determining the relative pet-friendliness of a home.
  • Floors: What type of flooring do you have in the home? Some types of floors are more dog-friendly than others. For example, hardwood floors are highly durable and attractive (and easy to clean, too), but they are susceptible to water damage and scratches. This means you’ll need to keep your dog’s nails trimmed, and should consider placing mats under water bowls. Laminate and vinyl are more scratch- and water-resistant than hardwood, but do not last as long. Carpet is highly comfortable and provides traction, but can also trap hair and bacteria. Consider your preferences and what you think will be most conducive to your life as a dog owner.
  • Location: Where is the property located? How close are you to dog parks, groomers, veterinarians or animal hospitals? While this might not influence a purchase decision, it’s at least something you’ll want to consider if you own a pet or plan to get one.
  • Home layout: Do you have enough room in the home for your pets to play? Are they easily able to get from room to room? Are their stairs that might be challenging or even dangerous for an older pet? This is especially important if you allow your pets to have free run of the home when you are away.

These are just a few examples of some of the most important issues to factor into your housing search if you’re a pet owner. For assistance in finding a dream home that’s pet-friendly and meets all of your needs, we encourage you to contact Carpenter Real Estate, and we will be happy to be of assistance!

What Will the Housing Market Look Like in a Post-Pandemic World?

If you’ve been following the housing market at all over the last year and a half or so, you know housing prices have been through the roof, and that there has been an extremely high demand for housing coupled with a relatively low supply.

Experts have speculated this hot housing market has been fueled primarily by the COVID-19 pandemic. With more opportunities for people to work from home, and others taking the time in isolation to reconsider what they want out of a home, there have been more people looking to become homeowners. In addition, many millennials are finally reaching the point where they have shed enough of their crippling student loan debt to finally consider becoming homeowners in their 30s.

While mortgage rates have gone up, they’re still at historic lows, which will still continue to make for an attractive market. But once the pandemic is well and truly behind us, what can we expect the housing market to look like?

Here are some issues to consider.

The future of remote work

At this point, enough people have found success with remote work that it’s likely more people than ever will be able to work from home. Companies will save money by downsizing their in-person activities or removing physical office spaces altogether, and workers will seek out jobs that give them the flexibility to work remotely if they wish to do so.

One survey from Zillow found remote workers were more likely to consider moving because of the pandemic—23 percent of remote working respondents said this versus only 13 percent of workers who always work in person.

Housing preferences

What will be interesting to watch is how a return to pre-pandemic norms affects housing location and size preferences. An equal number of experts surveyed by Zillow believed Americans’ preferences for living in the suburbs over urban areas during the pandemic was temporary as said it was permanent (46 percent of respondents for each).

There has not been much change in the size of ideal homes for Americans. On average, Americans want a 2,000 square-foot home with three bedrooms and two bathrooms.

Will location (urban vs. suburban) preferences change once the pandemic is officially behind us? It’s hard to say at this point.

Housing pricing

Prices have soared as demand during the pandemic has far outstripped supply. But you can expect home prices to continue growing, at least in the immediate future. Experts expect home prices to grow by 6.2 percent over 2021. So, those high prices you’ve seen? Expect them to at least last into 2022. After that, it’s difficult to predict, given the unique market circumstances that have been at play this last year and a half.

There’s a lot of guesswork that comes with determining what the housing market will look like at any point in the future, but especially when there’s a pandemic in the mix. It’s important to work with a real estate expert you can trust when looking to buy or sell so you can stay on top of market trends.

Contact Carpenter Real Estate for more information about buying and selling property in this hot housing market!

Why Do People Say You Need 20 Percent Down for a Mortgage?

If you’re looking to invest in a home of your own, you might have heard that you need to put a 20 percent down payment on the purchase price to secure a loan. In fact, average down payments historically have been well under 20 percent for homes at nearly all price ranges. Read on to learn why the 20 percent down payment rule is a myth and how down payment assistance can help you afford the best property for your needs and your budget.

The truth about the 20 percent down myth

Why do many people stress that you need 20 percent down for your mortgage? It’s not because financial institutions won’t agree to financing otherwise; it’s actually because you’ll avoid paying mortgage insurance. Private mortgage insurance (PMI) is usually required in situations where buyers need to put less than 20 percent down on a house. It’s an extra charge on your mortgage bill, and for typical buyers it can amount to a few hundred dollars every month. Obviously, this is no small figure, and many home buyers want to avoid this charge as much as possible.

There are some benefits to paying mortgage insurance, though, especially if it means it gets you into a home sooner. You’ll have to weigh the costs versus the benefits. Discuss all concerns with your realtor to determine whether you should pay the mortgage insurance, wait to buy a home when you have enough for a 20 percent down payment or determine whether you should dip into your savings to cover the cost. Of course, you sometimes have the option to receive down payment assistance as well.

Down payment assistance options

There are some generous down payment assistance programs to help home buyers secure the financing they need to get into a home and reduce the money they need to save for a down payment. They include:

  • Grants: These are the most common forms of down payment assistance, and they’re gifts that never need to be repaid. The amount you can secure for a grant depends on where you want to buy.
  • Second mortgages: You can take out a loan to cover your down payment, and it needs to be paid down alongside your main mortgage.
  • Second mortgages (deferred): In some cases, you can secure a second mortgage with deferred payments that only need to be paid when you move, sell or refinance the property.
  • Second mortgages (forgiveness): Some second mortgages can be forgiven after a set number of years. In most cases it’s five years, but in some it can be as high as 20 years. You’d only have to repay the second mortgage if you move, sell or refinance the property.

You also have the option of receiving “gift” funds from generous relatives or friends. You need a paper trail showing that the money came from an “acceptable source,” as well as a gift letter from the giver indicating their relationship to you and intent to use funds for your home purchase.

If you’re looking to avoid paying mortgage insurance but need help coming up with a sufficient down payment, a seasoned realtor can inform you of your options for down payment assistance programs. Contact Carpenter Real Estate to learn more about your financing options when buying a home.

An Introduction to First-Time Home Buyer Loan Programs

Buying your first home? It’s an exciting process, but one that can also be stressful and confusing, especially when it comes to financing. Luckily, there are first-time home buyer loan programs available to help you afford a house that suits your needs and budget. Here are the basic facts you need to know about first-time home buyer loan programs.

Conventional home loans

When buying your first home, a conventional home loan is one of the most basic mortgage loans you have to choose from. These loans are also called conforming loans since they meet the strict guidelines set out by Fannie Mae and Freddie Mac. If you have a good credit score and a down payment of at least 10 percent, these loans are an ideal option, but they’re also available even for those who can only afford a 3 percent down payment. These loans include:

  • Fannie Mae’s HomeReady Loan & Freddie Mac’s HomePossible Loan: Down payments start at 3 percent and offer flexible terms for low-income buyers. In some cases, these loans offer up to a $500 rebate for qualified buyers.
  • The Conventional 97 Home Loan: This is often the most economical way to buy a home, requiring only a 3 percent down payment.

FHA loans

U.S. Federal Housing Administration (FHA) loans are ideal for buyers who need low down payments and have poor credit histories. Since it’s riskier for institutions to lend to these buyers, an FHA loan mortgage insurance premium (MIP) is required. While this is an additional expense, it can get you into a home quickly even if you have poor credit. In addition to regular mortgage payments, expect to pay the following MIP costs:

  • Upfront Mortgage Insurance Premium: 1.75 percent of the loan amount.
  • Annual Mortgage Insurance Premium: 0.85 percent of the loan amount.

VA loans

U.S. Department of Veterans Affairs (VA) loans offer amazing benefits that you can’t get any other way. These loans offer 100 percent financing for both veterans and active members of the U.S. military. VA mortgage rates are consistently the most attractive for common loan types, which helps those who have served or are serving our country gain access to a home of their own.

USDA loans

U.S. Department of Agriculture (USDA) loans are available in rural areas and low-density suburbs. It’s an attractive option similar to the VA loan in that you don’t have to put any money down on your new home in some cases, and you’ll receive 100 percent financing as well as lower mortgage rates than you’d have access to with other loans. Keep in mind that these loans are only available if you’re buying in land that’s designated “rural” according to USDA standards, which usually only applies to areas with populations of less than 20,000.

It can be challenging to navigate the process of buying your first home. If you have the right realtor on your side to skillfully guide you through each step, including financing, you’ll find it much easier to get into the perfect home at a price you can afford. Contact Carpenter Real Estate to discover more tips to help you as you buy your first home.

Tips for Buying Your First Home

If you’re a first-time homebuyer, you might find the process overwhelming. Applying for a mortgage is daunting, and the sheer amount of paperwork associated with a home purchase is almost a second job in and of itself. Luckily, home buying doesn’t have to be too difficult—especially when you follow these tips for buying your first home in Alpine, TX.

Here’s how to go into your first home buying process armed with the right information.

Set a budget

Before you can buy a home, you need to know just how much home you can afford. It’s better to set a budget before you even start looking at the listings. You should also consider whether it’s smart to buy right now. Generally, if you plan to live in a home for more than five years, it makes sense to buy—but if you don’t think you’ll stay in the home or the area very long, there’s nothing wrong with renting.

Most importantly, you shouldn’t count on your home to appreciate in value. There’s no guarantee that you will be able to sell your house for a profit, so choose one you like simply because it’s a good house.

Generally, your mortgage payment should be 30 percent or less of your monthly income. If you spend more than that, you risk not being able to cover your other monthly expenses.

Work on your finances before applying for a mortgage

Next, you’ll need to whip your finances into shape. There’s no time like the present to start monitoring your credit report and improving your score. You’ll also need to save some money for the down payment (3.5 to 20 percent of the purchase price) and closing. Finally, get your financial documents together: W-2s, pay stubs, tax returns and bank statements.

Go mortgage-shopping

Now it’s time to apply for a mortgage—and don’t forget to shop around. You want to get pre-approved for a mortgage before you start house-hunting. Otherwise, you risk losing out on your dream home before you can put in an offer.

When you’re evaluating mortgages, it’s important that you realize the difference between fixed-rate and adjustable-rate mortgages (ARMs). Look at the mortgage term and find out what other terms you may be dealing with. Finally, ask about the fees—they may be hidden in the mortgage payments or tacked on at closing. Either way, they can be a nasty and expensive surprise if you’re not prepared.

Don’t forget the homeowners insurance

Finally, don’t forget to purchase homeowners insurance. You’ll need to get adequate insurance to protect your future property—but the rates can vary depending on location, home size and style and even the age and condition roof. This is often a significant expense that first-time buyers forget to factor into their monthly expenses.

As you can see, home buying is not a fast or easy process—but it’s a lot easier when you follow these tips for buying your first home in Alpine, TX. To find the perfect house for you, call Carpenter Real Estate today.

What’s the Mortgage Rate Forecast for May 2021?

Thinking about buying a home? Now is the perfect time to act. Mortgage rates have been dropping over the last few months, making new mortgages a great deal, but experts forecast that May 2021 mortgage rates won’t last forever in Alpine, TX. Read on to learn more about mortgage rates—and why you shouldn’t miss this great deal.

Mortgage rates in May 2021

As of May 19, 2021, the mortgage rate dipped down to 3.18 percent. That’s the lowest it’s been since early March. Some lenders, like Freddie Mac, went below 3 percent. Although the economy is growing faster again, don’t expect sub-3-percent mortgage rates to last much longer.

Most experts think that the rebounding economy will probably cause rates to creep back up slowly—by the end of May 2021, they’ll probably all be in the 3.1 percent range. That’s because more companies are hiring again, and thanks to vaccinations and policy support, more people are funneling money into the local and national economies. Inflation, on the other hand, is not expected to rise along with it.

Mortgage rates are expected to stay low for a while, but not forever. Rates are stabilizing, and some experts predict that even if they continue to creep up, it will be a gradual process. The record-low rates we’ve been used to seeing during the COVID-19 pandemic will eventually disappear.

What will happen in the summer and beyond?

As we head into summer, mortgage rates will probably hover around 3 to 3.5 percent. The more money consumers spend, the more housing prices and mortgage rates trend upward. If the economy continues to rebound and inflation rises along with it, mortgage rates should stay steady. However, slower growth is predicted for 2022, which may that there’s a pullback in the second half of this year.

Remember, too, that we’re currently undergoing a major lumber shortage. This has driven the cost of new construction up by the tens of thousands, depending on how large the project is. On the other hand, as the global economy stabilizes, foreign investors may decide to snatch up American properties. That can drive the rates down.

Most lenders predict we’ll end the year with 30-year rates hovering somewhere around 3.5 to 3.7 percent.

Now is the time to act

If you’ve been considering a new home, now is the time to act. Most financial advisors suggest that this is the best time to lock in an ultra-low mortgage rate, especially if you can find something under 3 percent. Even if mortgage rates rise over the next few years, as predicted, we’re still in “historically low” territory. That means your dream home may just be within reach, even if you can’t afford to jump on the current rates. Remember, the historical fixed rate average is usually right around 8 percent.

If the May 2021 mortgage rate forecast has you looking for new homes in Alpine, TX, call Carpenter Real Estate today. We have over 70 years of experience working with homeowners in the area, and we understand this market. We look forward to working with you!

What’s the Housing Price Forecast for 2021?

Nearly every industry took a hit in 2020 due to the coronavirus pandemic. One industry that’s bounced back the fastest, though, is the housing market. In fact, last year was a record-breaking year for realtors, with 5.64 million homes sold—a 5.6 percent increase over 2019. This post will cover everything you should know about the 2021 housing price forecast in Alpine, TX.

Higher demand and higher prices

Prospective homebuyers this year face a major challenge: greater demand than ever! With mortgage rates lower than they’ve been in recent memory, a growing percentage of the population is interested in buying instead of renting.

Ideally, demand and inventory would both be at all-time highs, but that’s not the case. While demand is greater than ever—especially among millennials—the inventory just isn’t there. In fact, there were 117,000 fewer listings in March than in the same month in 2019. Even with new home construction up 20 percent over the past few months, there’s just no way for the inventory to catch up with demand at this rate.

Due to high demand and low inventory, home prices are skyrocketing—the median sale price for a single-family home shot up 17.2 percent over the last year. Potential buyers are outbidding each other at record rates, many offering cash to secure the sale over their competitors.

Although experts predict mortgage rates will increase slightly over the next few months, our 2021 housing price forecast in Alpine, TX shows that prices and demand will continue to increase for the foreseeable future. While this is great news for sellers, it’s a tough pill to swallow for people looking to purchase a house.

Should you buy or build?

Buying an existing home might not be in the cards this year—so why not build your own? There are pros and cons to both buying and building, so it’s important that you weigh your options.

As long as you’re able to find the right house and outbid your competition, purchasing an existing home is relatively convenient and fast. The process is further streamlined when you work with a qualified realtor who can handle all of the heavy lifting for you. As long as you find a move-in-ready home, you can be set up in your new house as soon as all the paperwork is signed.

If you’re unable to buy one off the market, building a custom home is your next best option. When you build a home, you get to choose every detail of your living space. You also have the advantage of living exactly where you want—there’s no settling for a lesser location when you build! However, building does take longer and can cost more than buying an existing home.

Let us help you find your dream home!

If you’re tired of going to countless open houses or dealing with realtors who don’t put your needs first, call our team at Carpenter Real Estate. With decades of experience in the area, we’re experts when it comes to the 2021 housing price forecast in Alpine, TX and helping you find a home. Contact us today to learn more about our vast inventory of homes and lots for sale.

New Single-Family Housing Construction Trends

Potential homebuyers browsing listings on Zillow or similar websites may get discouraged at what they find (or don’t find). Home prices are higher than they’ve ever been, and inventory is at an all-time low. This is bad news for those who want to stop renting and own their own house!

While there are plenty of news stories out there about the existing housing market, not as many people are talking about 2021’s single-family housing construction trends in Alpine, TX. Continue reading to learn a little bit more about what’s going on in the new construction market.

Increasing inventory

Compared to existing inventory—which is shrinking by the week—there will be more new builds hitting the market in the coming years. In 2021, the Mortgage Bankers Association (MBA) predicts 1.134 million new builds. They expect that number to increase to 1.165 million in 2022 and 1.21 million in 2023.

Higher sale prices

Just like with existing homes on the market, the price for new builds is on the rise. The median sales price for a new home was $349,400 at the beginning of April, up from $346,400 in January.

Rising material costs

The bad news for construction crews and people who want to build their own homes is that material prices are going up. Due to a lumber shortage caused by the pandemic, lumber prices have jumped more than 200 percent in the past year. If this trend continues, it’s hard to foresee a circumstance in which sale prices for new homes get much lower.

Why build a new home?

We’ve covered 2021’s single-family housing construction trends in Alpine, TX, but we haven’t really gotten into the benefits of building a new home instead of buying one off the market. Here are a few reasons to buy an empty lot and start from scratch:

  • Perfect location: A quality location is a must-have for any buyer. Unfortunately, when you’re shopping for a home, you might have to settle for a less-than-perfect area to get a house that meets your needs and budget. That’s not the case when you build—you’ll have tons of options for new lots to build your perfect home.
  • Total customization: There’s no settling for your home’s style or features when you build, either. You have the ability to customize anything and everything when you hire an architect and contractor to design and build your dream home.
  • Fewer worries: Buying a home off the market isn’t a total gamble. After all, there’s always an inspection performed prior to the final sale. But that doesn’t guarantee that something won’t go wrong in the near future! When you build from scratch, the likelihood of major issues right off the bat is exceedingly low. It’s often worth building just for the peace of mind.

Are you ready to start building?

Now that we’ve covered some of the top 2021 single-family housing construction trends in Alpine, TX, it’s time to buy a lot and start planning your construction. At Carpenter Real Estate, we have an inventory of high-quality residential lots that are sure to meet your needs. Contact us today to take a tour or to learn more about your buying options.