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Still Living in Your Starter Home? Make the Most of the Small Space
It’s no secret that the housing market has been slow to recover, but at least we’re moving in the right direction. Still, millions of families across the U.S. are finding themselves in the home they purchased years ago as a starter home, even though their family has outgrown the space. For some homeowners, it will still take years before they break free from being underwater in their loan, but that doesn’t mean that homes can’t be modified to fit new needs. Here are some of the best tips for making the most of your space.
Use Your Home’s Space from Bottom to Top
If you don’t have a lot of floor space to work with, see what you can do when you start working upwards. A popular idea is hanging multiple shelves on the wall to be used for displaying collectibles, photo frames or books. Use the tops of your cabinets to add plants or cookbooks. Cabinets hung on the walls can also help in bathrooms and kitchens.
Include Dual Purpose Furniture in Main Rooms
There are many pieces of furniture that are dedicated to helping homeowners with small spaces. If you need space for a laptop but don’t want a desk sitting in your family room, try a stylish armoire. These are also great for storing toys inconspicuously. If you enjoy entertaining, try a compact table with leaves that can be inserted. If you lack seating space, try an ottoman that has chairs underneath.
Make Functional Use of Your Garage or Basement
Garages are different for everyone. Some people park their cars in them, others use them to store all of their extra stuff. When you’re tight on space, you need to utilize extra spaces in your home that can offer you more flexibility. Turn your garage into a useful storage space with overhead storage and shelving, or create a workspace for your favorite hobby. Sheds are also a great way to create additional space and can be used for a guest home or hobby space.
Rent a Storage Unit
Sometimes, we accumulate so much stuff, we just can’t house it all anymore. If you plan on moving in the near future and want to save items for this purpose, it makes sense to purchase a storage unit in the meantime. You’ll find that it will make your home much more comfortable, and keep you feeling organized, too. Since storage units cost a monthly fee, it’s best to store only necessary items you know you’ll need.
The Basics of an FHA Loan
If you’re interested in buying a home, you will have several options available to you in terms of a loan. FHA loans have gained in popularity over the years because of their low down payments and more forgiving requirements. FHA loans are funded by the Federal Housing Administration, and they are a great option for first-time homebuyers who may not have a lot of money to put down.
Who Qualifies for an FHA Loan?
To qualify for an FHA loan, you will need to have a reasonable debt-to-income ratio, with some programs accepting up to 55 percent debt. You don’t need to have an outstanding credit score either, just a decent one. Where some conventional loan programs require credit scores of over 750, FHA loans will consider people with scores of 650.
There are also some benefits for first-time homebuyers. FHA loans allow for co-signers, which is great for new graduates. You can also use gift money to put toward the down payment, and sellers can contribute to the closing costs, paying up to 6 percent of the purchase price.
What are the Benefits of an FHA Loan?
FHA loans are not for everyone, but they certainly have their benefits. Consider the following:
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Low down payment of 3.5 percent
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Low closing costs
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Easy credit qualifying
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Gifts and co-signers allowed
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No prepayment penalty
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More leniency during hard times
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Funding for home improvements/renovations
Is There Anything Else I Should Know?
FHA loans include mortgage insurance, which is added into your monthly payment. This ongoing insurance can cost more than private mortgage insurance with conventional loans. There have been changes made regarding this insurance, which can fluctuate at any time. If you do have good credit and strong income, you can get other offers that are competitive and may not require you to put down a large down payment.
The loan you choose is an important decision, so take your time. You may find that an FHA loan is perfect for your situation, especially if you’re credit score is subpar or you have little money to put down.
First-Time Homebuyers: Will there be Enough?
It’s no secret that the housing market has been slow to recover, but there has been one group of homeowners that continue to strengthen the market little by little: first-time homebuyers. If you were a first time-buyer within the last couple of years or are looking to make your first purchase, you know the type of market that’s out there. Low interest rates and low housing prices make investing in a home an excellent choice.
What many people don’t know is that being a first-time homebuyer is challenging because there is very little inventory as more people are holding onto their properties and riding out the market. And, loans aren’t as easy to get as they once were, and incentives are dwindling down. For instance, starting June 1, 2013, anyone who takes out an FHA loan and doesn’t have at least 10 percent down will pay mortgage insurance for the life of the loan.
As home prices go up, interest rates go up and housing inventory stays low, first-time homebuyers – the key to a healthy residential real estate market – are still taking it slow. It’s hard to jump on something just because the price is right when the home or the location is not. Perhaps this is why first time buyers make up only 29 percent of recent buyers, according to the National Association of Realtors. Generally, these first time buyers make up about 40 percent of the market.
There are other factors that are making it hard for young adults to enter the housing market. Some are unemployed or underemployed and others don’t have a sufficient down payment. Others have poor credit or are burdened with student loans, with not enough money to handle a mortgage payment. These factors affect the young most of all, and it has some worried that there may not be enough first time buyers to sustain the market.
Only time will tell, as some believe that there are many buyers out there that are “on the fence,” waiting out the market to see what happens. If a young couple finds their dream home and has to pay a bit more in interest, it’s worth the wait.
