Zero down mortgages – controversial and real
Before the recession, zero down mortgages were somewhat common, particularly for first time buyers, and bandit signs lined the roads proclaiming the ease with which anyone could get a loan. True or false, many believe the relaxed lending conditions played a substantial role in the housing crash, and lenders have responded over the years by tightening qualification criteria to the point that even the National Association of Realtors (NAR) warned late in 2012 that the housing recovery would be hindered by overly tight conditions.
Now, zero down mortgages are being rumored in various cities, and while not widespread, it is not heard of, for example, the DailyHerald.com reports that two credit unions are claiming success in zero down payment programs going back as far as two years with a nearly perfect track record.
So who gets zero down loans?
So what exactly are the lending conditions under which a lender may offer a zero down loan? The Herald reports that Navy Federal Credit Union, the largest credit union in the nation, offers a zero down mortgage with no mortgage insurance, even allowing seller concessions. The average loan is around $200,000 (and can go up to $1M) and targets first time buyers, and the Union has closed $740 million in this type of loan in the last year alone, keeping them in their own portfolio and servicing themselves. Qualifications include membership in the credit union, sufficient income and reserves, and decent credit. The program boasts less than a one percent delinquency rate.
Additionally, the NASA Federal Credit Union also offers zero down loans to members in the Washington D.C. area with a maximum loan amount of $650,000 and seller concessions are capped at three percent. This program is a little more stringent with qualifying criteria than the Navy FCU, with the minimum qualifying credit score around the mid-700s, but the program has had zero foreclosures.
Still a contentious issue
The topic of required down payments has been controversial and a common talking point for politicians during election periods, and it still appears likely that almost all banks require at least something down, but these two new programs are already proving that it is not an impossibility in the market to offer zero down loans, even with tight lending conditions.
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
Think LuLaRoe is a pyramid scheme? Founders say your opinion’s uneducated
Social media giants are trying to operate without human controls but are failing
New stats behind mobile addiction and how people are coping
Our five faves for Friday – almost Thanksgiving edition
Class action lawsuit claims Tesla plant is a hotbed of racism
Red Ventures acquires Bankrate, layoffs commence
All I want for Christmas is some Nuheara ear buds
Wall Street wants to formally jump into Bitcoin waters
LuLaRoe in $1B lawsuit for shady business model
Disruption vs destruction and AI’s use of both
Amy’s Ice Cream founder on Austin’s business risks and rewards #WhyAustin
Turns out a lot of people are in between introverted and extroverted
P. Terry’s founder on the booming economy in Austin #WhyAustin
Ladies and gentlemen, the U.S. National Anthem
Indeed President, Chris Hyams tells us #WhyAustin [video]
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