When Is The Best Time Of Year To Purchase A Home?

Historically, spring and summer have been the busiest times in the real estate market. But the traditional seasonality of homebuying and selling was upended by the pandemic: Home sales slowed significantly amid stay-at-home orders, then dramatically spiked, and the market remained volatile for quite some time.

The good news is, things have since returned to something closer to normal. One positive sign: After years of a distinct lack of available homes for sale, which kept homebuyers at a disadvantage, Realtor.com is forecasting an 11.7 percent increase in existing housing inventory for 2025. This increase would bring more balance to the supply-and-demand metric — and also more leverage for buyers. In other words, seasonality may once again become the most important factor in determining the best time of year to buy a house. 

Spring and early summer are the busiest and most competitive time of year for the real estate market. There’s usually more inventory listed for sale than other times of year, and home prices tend to be steeper to reflect the increased demand. Since 2011, the months of February through June have been the most lucrative time to sell, according to a 2024 study by ATTOM Data Solutions, with May in particular earning sellers an average premium of 13.1 percent above market value. The other months in the range all yielded premiums ranging from 12.2 percent to 12.8 percent.

“Typically, sellers choose spring and summer as the time to list as the majority of buyers are out in the market,” says Ryan Jancula, principal and lead broker with Jancula Group at Compass in Los Angeles. “This is a double-edged sword for a buyer, as you will be met with more opportunities but [also] much more competition, which may lead to further increase in prices or less desirable sale terms.”

If you’re hoping to save some money and your timeline is flexible, consider waiting until the rush is over and not starting your home search until mid- or late-summer. The most expensive month of the year to purchase a home is May, when seller premiums are as high as 13.1 percent above market value, according to ATTOM data.

Buying off-season has its benefits, though. The ATTOM study, which analyzed 59 million single-family home and condo sales between 2011 and 2023, showed that October is the month with the lowest seller premium by far at 8.8 percent, compared to May’s 13.1 percent. The next lowest were September and November, both at 9.5 percent. That means October is when homebuyers are likely to get the best deal. In fact, a recent Zillow report declared early fall to be “the next housing sweet spot.” The least expensive month of the year to purchase a home is October, when seller premiums are at their lowest, according to ATTOM.

Just because spring is the industry’s prime time doesn’t automatically mean it’s the right time for you. You have to consider your personal circumstances as well as seasonality — for example, if you are getting married or having a baby in August, you may not be able to wait nearly a year for a larger home.

“While spring is typically referred to as the home buying season, that doesn’t necessarily guarantee that it is an optimal time to buy,” says Mark Hamrick, Bankrate’s senior economic analyst.

In addition, if price is of concern to you, you may in fact be better off waiting out the rush. This chart illustrates median home prices since the start of the COVID-19 pandemic, using data from the National Association of Realtors. Once the chaos of the early pandemic died down, the highest price spikes were uniformly in June or July, and the lowest prices occurred in the dead of winter. Source

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Questions To Ask Yourself Before Refinancing

Does your mortgage have a prepayment penalty?

Check your monthly mortgage statement to see if your mortgage has a prepayment penalty. If there is a prepayment penalty, you’ll have to pay the penalty to refinance your mortgage. You may be able to avoid the prepayment penalty if you refinance with the lender you have now.

Are you planning to move in the next few years?

If you know you’re going to move in the next few years, you might not have time to recoup the costs of refinancing.

Can you afford the closing costs?

Refinancing typically requires closing costs which could be in the thousands. Lenders may offer no-cost refinancing but they are usually at the expense of a higher interest rate. Make sure you compare the advantages and disadvantages.

How much lower will the new interest rate be?

Refinancing may not be worth it if your interest rate and monthly payment savings are minimal.

What is your credit score?

If your credit score isn’t up to snuff, you may not be able to refinancing into a better rate. Check your credit score and make any improvements you can.

Are you refinancing to an adjustable rate mortgage?

If you are refinancing to an adjustable rate mortgage consider what the impacts of a future rate hike may do to your monthly payment. If interest rates are low now the adjustable rate may seem attractive. However, if rates rise in the future you may see your monthly payment increase.

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How Reverse Mortgages Work

What Is A Reverse Mortgage?

A reverse mortgage is a home loan that you do not have to pay back for as long as you live in your home. It can be paid to you in one lump sum, as a regular monthly income, or at the times and in the amounts you want. The loan and interest are repaid only when you sell your home, permanently move away, or die.

How Do Reverse Mortgages Work?

• Most require no repayment for as long as you live in your home.
• They are repaid in full when the last living borrower dies, sells the home, or permanently moves away.
• Because you make no monthly payments, the amount you owe grows larger over time. By law, you can never owe more than your home's value at the time the loan is repaid.
• You continue to own the home, so you must pay the property taxes, insurance, and repairs. If you fail to pay these, the lender can use the loan to make payments or require you to pay the loan in full.

Reverse Mortgage Eligibility

• All homeowners must be at least 62 years old.
• At least one owner must live in the house most of the year.

Eligible Homes

• Single family, one-unit dwelling.
• Two-to-four unit, owner-occupied dwelling.
• Some condominiums, planned unit developments or manufactured homes.

NOTE: Cooperatives and most mobile homes are not eligible.

How Much Will I Get with a Reverse Mortgage?

Reverse mortgages can be paid to you:

• All at once in cash
• As a monthly income
• As a credit line that lets you decide how much you want and when
• In any combination of the above

The amount you get usually depends on your age, your home's value and location, and the cost of the loan. The greatest amounts typically go to the oldest owners living in the most expensive homes getting loans with the lowest costs. Most people get the most money from the Home Equity Conversion Mortgage (HECM), a federally insured program.

Types of Reverse Mortgages

Loans offered by some states and local governments are often for specific purposes, such as paying for home repairs or property taxes. These are the lowest cost reverse mortgages. Loans offered by some banks and mortgage companies can be used for any purpose.

Costs for Reverse Mortgages

The costs for loans from banks and mortgage companies usually include the following:

• Application fee
• Insurance
• Origination fee
• Monthly service fee
• Closing costs
• Interest

These costs are usually added to the loan balance (what you owe). HECM loans are almost always the least expensive reverse mortgage you can get from a bank or mortgage company, and in many cases are significantly less costly than other reverse mortgages. Reverse mortgages are most expensive in the early years of the loan and generally become less costly over time. Before getting a reverse mortgage other than a government or HECM loan, carefully consider how much more it will cost you.

Source 

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What You Really Need For Your Down Payment

What Is A Down Payment?

A down payment is the initial, upfront payment you make when purchasing a home. This money comes out of pocket from your personal savings or eligible gifts. 

Traditionally, a mortgage down payment is at least 5% of a home's sale price. House down payments are often, but not always, part of the normal home buying process. If a buyer put 10-20% down, they may be more committed to the home and less likely to default.  If there is more equity in the property, the lender is more likely able to recover its loss in the event of foreclosure.

Further, putting 20% down on your home when you purchase can help show the bank — and yourself — that you're financially ready to purchase a house. A down payment on a house also protects you as the buyer. If you want to sell your home and the market drops, you might owe more on your property than it's worth. If you made a larger down payment when you purchased your house you may break even, or possibly make money when you sell.

Types Of Loans

You can choose from a wide variety of loans. However, the four common types of mortgage loan programs are:

1. Conventional Fixed-Rate Mortgages

With this type of mortgage, you keep the same interest rate for the life of the loan, which means the principal and interest portion of your monthly mortgage payment stays the same. These types of loans typically come in 10, 15, 20 or 30-year terms.

If you put less than 20% down on a conventional loan, you may need to pay private mortgage insurance (PMI). Opens overlay. The most common way to cover this cost is to pay for it in a monthly premium that's added to your mortgage payment. PMI usually equals 1% of your loan balance per year. Many lenders offer conventional loans with PMI for down payments as low as 5%, and some as low as 3%.

2. Conventional Adjustable-Rate Mortgage (ARM)

Unlike a fixed-rate loan, an adjustable-rate mortgage has an interest rate that can go up or down based on market conditions. The down payment is typically between 3 and 20%, and may require PMI for buyers who put down less than 20%.With an ARM, the initial rate is often lower than a fixed-rate loan. However, the interest rate may go up over time.

3. Federal Housing Administration (FHA) Loan

This is a type of loan insured by the federal government. An FHA loan is ideal for first-time buyers with less-than-perfect credit scores and offers down payments as low as 3.5%. Unlike conventional mortgages, mortgage insurance includes both an upfront amount and a monthly premium.

4. VA Loans

This type of loan is only available for U.S. military veterans and active duty service members.VA loans are funded by a lender and guaranteed by the Department of Veterans Affairs. The primary benefit of pursuing this type of loan is it may not require a down payment and has no monthly mortgage insurance.

Benefits of putting more than 20% down...

If you're able to do so, you may want to consider putting down a payment that's larger than 20%. Here are some of the benefits:

• Lower monthly payment due to no mortgage insurance and smaller loan amount
• Less interest paid over the life of the loan
• More flexibility if you need to sell on short notice 

Source

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Strong Financial Fundamentals for Those Just Starting Out

A good house has a strong foundation, and the same can be said for managing your finances. That’s especially important right now as our world changes daily. Understanding the basics and putting those bricks in place with regard to your money isn’t complicated and will serve you well into the future.

Here are 4 foundational "bricks" that will help you establish a stronger financial footing;

Selecting a Financial Institution

When choosing where to bank, take time to find a financial institution that’s reputable. A common mistake is to go with a local bank or one that you have recently seen on an advertisement. Ensure your financial institution can cater to your needs with regard to products and online capabilities. They should offer friendly, supportive and personalized service. Research their reputation and get recommendations from friends and family about past experiences. People who stay with an institution for a long period of time tend to be satisfied. Once we lock down who we're going to use as the foundation of our financial future, we're ready to get started.

Knowing the Right Accounts to Open

Start with the basics: a savings account that yields interest and has no fees (you’ll want to steer clear of hidden charges or minimum balances) and a solid checking account that offers those same benefits.

Often checking accounts come with better benefits if you set up a direct deposit of your paycheck to the account. Doing so also allows you to build your savings through the practice of “paying yourself first,” essentially transferring money to your savings account every payday. Once you have the equivalent of 3 months' salary in your savings account, you’re on your way.

Make sure you shop around and choose the account that will serve your lifestyle the best. There are several ways to access money in a checking account: using a debit card, conducting transactions online or writing checks. Plan to use your checking account to take care of day-to-day expenses and pay bills. Once your checking and savings accounts are in good order, you’re ready to create a budget.

Creating a Budget

Taking the time to sit down and create a budget is critical to our financial well-being. Many online resources can help in this effort. The bottom line of a budget is simple: figure out how much money comes in on a monthly basis, and how much you spend during the same amount of time. It may seem tedious at first to count every penny, but knowing where the money goes is crucial. Separate your spending into essential and non-essential things. Groceries and rent are things that absolutely have to be paid each month, but fast food and impulse buys add up quickly and can be done without. Many people are surprised to find how much they spend on non-essential things once they actually keep track of where their money goes.

Obviously you want to spend less than you earn—but let’s go one better by using the 80/20 rule. This guideline suggests living on 80% of your pay and saving 20%. At first, that 20% should go into your savings account until you save 3 months' pay, as mentioned before. Once you achieve that goal, stick to your budget, and instead of growing your savings account, invest!

Starting to Understand Investments

There are many different ways to invest. There are high- and low-risk options, and to the beginner, it all may seem intimidating. The truth is that investing isn't nearly as difficult as many people think. Consider the peace of mind you’ll have by knowing that part of your pay each month is going to be put into something that will make your assets grow. The key is to have fun with it and watch your financial condition improve!

By just following these few steps, you’ll ensure a strong foundation for your "financial house." Now is the time to take some basic measures that can ensure your future financial well-being. Find a good institution and open a savings and checking account. Have the discipline to create a budget and then stick to it. Pay yourself first by using the 80/20 rule to ensure the health of your savings account. Once you build a strong foundation with those firm financial bricks in place, invest. Source

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What Is A Government-Backed Mortgage?

Government-backed mortgages are loans obtained through a private lender, such as a bank, but insured by one of three federal government agencies: the Federal Housing Administration (FHA), the U.S. Department of Agriculture (USDA) or the Department of Veterans Affairs (VA).

Because the government backs these loans, lenders can take greater risks by allowing lower credit scores and no or low down payments. However, they have different requirements and cost structures from conventional mortgages, the most common type of mortgage. A government loan may require upfront fees and mandatory mortgage insurance, for example.

How Do Government-Backed Mortgages Work?

Government-backed loans are a partnership between federal agencies and private lenders, with the backing agency insuring the loan should the borrower default. The government places strict requirements on eligibility and property type, but they leave other criteria—like interest rates, and in some cases, credit scores—up to lenders.

Not all lenders choose to participate in these programs. For those that do, the loan process is similar to getting a conventional loan, but borrowers face additional requirements along the way, like having a government-approved appraiser ensure the property meets minimum standards. Each type of government-backed mortgage also has its own fee structure. All three require an upfront fee for most borrowers, and FHA and USDA loans require ongoing monthly fees.

Pros and Cons of Government-Backed Mortgages

Government-backed mortgages can be hugely beneficial and make buying a home more accessible, but they're not for everyone and aren't always the best deal.

Pros

• Low or no down payments: FHA loans offer down payments of 3.5%, and VA and USDA loans require nothing. While some conventional loans offer low down payments, it's rare to find one lower than an FHA loan.
• More lenient credit criteria: If your credit score needs improvement or you have some blemishes on your credit report, you might get approved more easily with a government-backed loan than a conventional one.
• Flexible with funding: Most loans don't allow, or limit, using money from family, an employer or a charitable organization as a gift as a down payment. FHA and USDA loans don't have these restrictions.

Cons

• Strict eligibility requirements: Not just anyone can qualify for a government-backed loan. For example, USDA loans are restricted to owner-occupied primary residences in rural locations and carry income limits.
• Limited to specific property types: It's common to find restrictions on things like property location, type, occupancy, value and safety and security controls.
• Not always the best deal: If you have decent credit and some down payment money saved, it's possible you'll get a better deal with a conventional loan with fewer upfront and ongoing fees. Get a quote for both loan types to compare.

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Tips for Avoiding Foreclosure

 

1. Don't ignore the problem.

The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem.

Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.

The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notices of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights.

Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options.

Valuable information about foreclosure prevention (also called loss mitigation) options can be found online.

6. Contact a HUD-approved housing counselor.

The U.S. Department of Housing and Urban Development (HUD) funds free or very low-cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender, if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.

7. Prioritize your spending.

After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses--cable TV, memberships, entertainment--that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

8. Use your assets.

Do you have assets--a second car, jewelry, a whole life insurance policy--that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies.

You don't need to pay fees for foreclosure prevention help--use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD-approved housing counselor will provide free if you contact them.

10. Don't lose your house to foreclosure recovery scams!

If any firm claims they can stop your foreclosure immediately and if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional or a HUD-approved housing counselor.

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What Is A Lender’s Role?

A mortgage lender is a financial institution that ultimately approves your mortgage loan so that you can purchase a home and lends you the money to do so. Lenders lay out your financing options, review (or underwrite) your income and credit documentation, and work with you to determine whether you qualify for a loan. They also determine the amount you qualify for and provide explanations for the different options available to you.

Even though the process can seem overwhelming, it’s important to shop around before deciding on the right lender. Speaking to multiple lenders can make a difference in your ability to get the best mortgage and loan terms for your needs. If you don’t know where to look for a lender, start by asking friends, family, real estate professionals, and your local bank for recommendations.

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Do you Know these Myths and Facts About Home Buying?

Buying a home is a major milestone. It offers immediate and exciting benefits. But one of its greatest long-term advantages is wealth building. Wealth building, or the process of generating continuous income from various sources, can pave the way to financial freedom and transformative opportunities. Throughout history, owning real estate has been key to passing wealth from one generation to the next. Unfortunately, many people have been excluded from homeownership because of discriminatory laws and practices, financial hardships, or a lack of accessibility, meaning they were not allowed the opportunity to pass on such wealth.

Check out these common myths we hear from prospective homebuyers that prevent them from making a plan to purchase a home.

1. Myth: I need a 20% down payment to buy a home.

Fact: Government backed products, such as FHA loans, can have a down payment as low as 3.5%. Many lenders also offer conventional products that require 10% or less for a down payment.

2. Myth: I need amazing credit to buy a home.

Fact: FHA provides flexible underwriting requirements for borrowers with less than perfect credit. Although higher credit scores typically lead to better interest rates, don’t worry if your score is lower–there are programs & solutions available. With a housing counselor, you can explore financing options, learn strategies to improve or maintain your credit score, and map out the next steps toward owning your dream home.

3. Myth: I can’t get a mortgage with student debt.

Fact: A student loan will be considered part of your overall financial picture, just like a car loan or other financial obligations. In fact, a student loan may give you “diversity of credit”, a factor lenders look for that shows you can manage different types of debt. Source

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