June is national homeownership month
June is an exciting month for aspiring homeowners and residential real estate investors as it marks National Homeownership Month. This annual observance celebrates the importance of owning a home and recognizes its many benefits. It highlights the value of homeownership in building stronger communities, achieving financial stability, and promoting personal pride.
Understanding national homeownership month
President George W. Bush established National Homeownership Month in June 2002. The month-long celebration aims to encourage the dream of homeownership and provide information and resources to help individuals and families achieve this goal. Government agencies, non-profit organizations, lenders, and realtors come together to host events, workshops, and educational programs designed to support prospective homeowners and residential real estate investors.
The significance of homeownership
Homeownership is a cornerstone of the American Dream. It offers several key benefits, including:
Financial stability
Owning a home builds equity over time, which can be a valuable financial asset. It also provides a hedge against inflation since fixed-rate mortgage payments remain stable while rental costs can fluctuate.
Community investment
Homeowners are more likely to invest in their local communities by participating in neighborhood activities, supporting local businesses, and contributing to the area’s overall well-being.
Personal satisfaction
Owning a home provides a unique sense of pride and accomplishment. It also provides stability and security for individuals and families.
Wealth building
Real estate is often considered one of the most reliable investment forms. Over time, property values tend to increase, offering long-term wealth-building opportunities.
“Homeownership is the cornerstone of a strong community”
~ Rick Renzi
Tips for first-time homebuyers
If you’re a first-time homebuyer, National Homeownership Month is an excellent time to start your journey toward owning a home. Here are some practical tips to help you get started:
Assess your financial readiness
Before diving into the homebuying process, evaluate your financial situation. Check your credit score, review your savings, and determine how much you can afford for a down payment and monthly mortgage payments.
Get pre-approved for a mortgage
Getting pre-approved for a mortgage gives you a clear understanding of your budget and shows realtors and sellers that you are a serious buyer. It also streamlines the buying process once you find the right home.
Research first-time homebuyer programs
Many federal, state, and local programs offer financial assistance and incentives for first-time homebuyers. Research what programs are available in your area to take advantage of these resources.
Work with a real estate agent
A knowledgeable real estate agent can guide you through the homebuying process, help you find properties that meet your criteria, and negotiate on your behalf.
Attend homebuyer education workshops
During National Homeownership Month and throughout the year, many organizations offer workshops and seminars to educate prospective buyers about the homebuying process, financing options, and home maintenance.
Download our free first-time homebuyer guide!
16 reasons why owning a home is still the American dream
Owning a home remains a cornerstone of the American Dream. Despite economic fluctuations, societal changes, and evolving lifestyles. But what makes owning a home so integral to this aspirational vision?
1. Financial stability and investment
One of the primary reasons owning a home remains a significant part of the American Dream is the financial stability and investment potential it offers.
2. Equity building
When you own a home, you build equity over time. Unlike renting, where monthly payments contribute solely to a landlord’s income, mortgage payments gradually increase your ownership stake in your property. This growing equity can be a substantial asset, providing financial security for the future.
3. Asset appreciation
Historically, real estate tends to appreciate over time. While markets can fluctuate, the long-term trend for property values has generally been upward. Homeowners often benefit from this appreciation, which can contribute to their overall net worth and provide a return on investment when they sell.
4. Tax benefits
Homeownership comes with various tax benefits. Mortgage interest and property taxes are often deductible from federal income taxes, reducing the overall cost of homeownership. These tax incentives make buying a home more financially attractive. For more information about the tax benefits of homeownership, you should contact an account or financial planner.
5. Personal control and stability
Homeownership also offers personal control and stability that renting cannot match.
6. Customization
Homeowners have the freedom to customize their homes to their liking. Whether renovating a kitchen, landscaping a backyard, or simply painting the walls, owning a house allows you to create a space that reflects your personality and meets your needs.
7. Long-term stability
Homeowners have more stability than renters, who may face annual rent increases or the uncertainty of lease renewals. With a 30-year fixed-rate mortgage, your monthly payments remain consistent, providing predictable housing costs for the long term.
8. Sense of community
Homeownership often fosters a sense of community. When you own a home, you are more likely to establish roots, build relationships with neighbors, and become involved in local activities. This sense of belonging can enhance your overall quality of life.
9. Psychological and emotional benefits
Homeownership provides significant psychological and emotional benefits beyond the tangible financial and control aspects.
10. Pride of ownership
Owning a home brings a profound sense of pride. It symbolizes personal success and achievement. The ability to say, “This is my home,” can be incredibly empowering and fulfilling.
11. Security and comfort
A home often represents a place where you can retreat from the pressures of daily life. This sense of security and comfort can improve mental health and overall well-being.
12. Legacy and inheritance
Homeownership allows individuals to leave a legacy for future generations. Passing down a family home can provide financial benefits and a sense of continuity and familial history.
13. Societal impact
The benefits of homeownership extend beyond individual households and impact society as a whole.
14. Economic growth
Homeownership drives economic growth. Home purchase stimulates various sectors, from construction and real estate to home improvement and furnishings. This economic activity creates jobs and contributes to the economy’s overall health.
15. Community development
Homeowners tend to be more invested in their communities. They are more likely to participate in local governance, maintain their properties, and support neighborhood initiatives. This involvement strengthens communities and improves living conditions for everyone.
16. Social stability
Stable housing is linked to better educational outcomes for children, lower crime rates, and improved public health. Homeownership contributes to these positive social outcomes, making it a vital component of a thriving society. (Housing Matters.urban.org, 2024)
“That is the heart and soul of the American Dream, homeownership, the idea of being able to buy a house and start to build your family.”
-Wendell Pierce
Mortgage programs making homeownership accessible
Down payment assistance programs can give homebuyers the extra push they need to overcome financial obstacles to homeownership. As with most financial assistance, there are hoops to jump through, but in most cases, it is worth it if you genuinely want to achieve the dream of homeownership.
Down payment assistance programs federal, state, and local options
In response to this common challenge, many states, cities, and towns have developed down payment assistance programs to provide the funds needed to make homeownership possible. Here is a list of some active state programs that we are associated with.
Mortgage Equity Partners Advantage Down Payment Assistance Program
Mortgage Equity Partners has partnered with Essex Mortgage, a company that has helped thousands of homeowners since 2009 get the down payment assistance they need to purchase a new home. Essex works with The National Homebuyer’s Fund (NHF), a DPA non-profit public benefit corporation and an instrumentality of the government under IRS Code Section 115 that never runs out of funds to provide this generous program to our borrowers. See if you qualify for the MEP Advantage DPA Program!
MEP’s Advantage DPA Program offers two options:
This new program offers 100% financing per FHA guidelines. The MEP Advantage DPA Program can be used to get an FHA loan. The second mortgage used for the DPA is up to 3.5% of the home’s sales price or appraised value. There are two options for the DPA loan.
Option 1 is a second lien with an interest rate equal to the first note rate plus 2%. It has a 10-year loan term but can be payable upon sale, refinance, or payoff. The total loan amount is 3.5% of the lesser of the sale price or appraised value.
Option 2 is a second lien forgivable loan with an interest rate of 0%. The payments are deferred, and no interest accrues. This loan is forgivable after ten years. The total loan amount is 3.5% of the lesser of the sale price or appraised value.
FHA loans – An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). It is particularly popular with first-time homebuyers because it allows borrowers to finance homes with low down payments, sometimes as low as 3.5% of the sales price.
VA loans – One of the most significant advantages of VA loans is that they require no down payment. This means you can purchase a home without accumulating a large amount of savings. With traditional loans, you typically need to come up with a down payment of 20%, making it challenging for many Veterans and active military to buy a home. According to the VA, nearly 90% of all VA-backed loans are made without a down payment. With a VA loan, you can use the money you would have used as a down payment to pay for closing costs and other costs associated with buying a new home.
USDA loans – USDA loans are designed for individuals and families with low-to-moderate incomes who wish to buy homes in specific rural and some designated suburban areas. One of the most significant benefits of a USDA loan is that you don’t need a down payment to secure the loan.
The HomeReady Mortgage from Fannie Mae is a low-down payment option for first-time homebuyers and some repeat buyers. This program has relaxed eligibility requirements for borrowers with low to moderate incomes and lower credit scores. HomeReady Mortgages are great for first-time homebuyers who don’t always have money saved for a large down payment. Homebuyers using a HomeReady mortgage can take advantage of the multiple down payment sources allowed with this loan. For example, borrowers can use gift funds or community grants. In addition, no minimum personal funds are required.
The HomePossible Mortgage Freddie Mac also offers options and credit flexibilities to help lower-income borrowers attain the dream of owning a home. In addition to its down payment requirement of as little as 3% of the home’s sale price, Home Possible offers more options to responsibly increase homeownership for many borrowers. For example, co-borrowers who do not live in the house can be included for a borrower’s one-unit residence, and borrowers are permitted to have another financed property–all with competitive pricing and the ease of a conventional mortgage. Home Possible mortgages work well for first-time homebuyers, move-up buyers, and retirees with fixed incomes who often seek loan options that allow for flexibility when it comes to down payment sources.
Steps to take for first-time homebuyers
The most important thing to know is if you are financially prepared to buy a home. You should start early reviewing your finances. Objectively assess your financial situation, including credit score, income, and debts, so you know how much you can afford to pay for a home. Once you have reviewed your finances, contact our loan team to get pre-approved for a loan. This step will give you a clear idea of your budget and strengthen your position as a serious buyer. In today’s housing market, most sellers will not even consider your offer without a pre-approval.
The next step is to define your priorities. You may have heard this described as the must-haves vs the nice-to-haves, but these items are essential. Consider where you’d like to live by researching neighborhoods, schools, amenities, and commute times. Factors like these have a direct impact on your quality of life. In most cases, investing in a home is a long-term commitment, so know what you are getting into. Less impactful but still important to overall happiness and everyday living are the home features. Make a list of must-have features (e.g., number of bedrooms, yard size, layout) and nice-to-have features (e.g., pool, walk-in closet). Prioritizing home features will help you as you begin to visit homes with your realtor or attend open houses.
Choose a qualified, experienced real estate agent who knows the local market. They’ll guide you through the process, negotiate on your behalf, and provide valuable insights. The right agent is critical in the home search, so be wary of using someone who is not as focused as a full-time professional realtor. Realtors can provide access to home search platforms, so you are alerted of new listings as they become available. Start searching online to get an idea of available properties. We recommend using the free buyer experience on Homebot. You can sign up securely and access home listings in your price range and at your convenience.
Next is the fun part! Start scheduling showings with your realtor. You will want to visit properties in person to assess their condition and suitability. Watch out for those online pics. Just like on social media, everyone uses filters and the best lighting.
Once you find the property you want to buy. Your agent will help you draft a competitive offer. Consider factors like market conditions, comparable sales, and the seller’s situation. In a competitive market, you should prepare the best offer with as few contingencies as possible. Contingencies are clauses buyers include when making a home offer that protects them and allows them to back out of the deal if the terms are unmet. The contingencies protect your earnest money deposit. Be prepared for counteroffers and to negotiate terms such as price and closing date.
As a buyer, you must hire a professional home inspector to evaluate the property’s condition. The report supplied by the home inspector will allow you to address any issues or negotiate repairs with the seller. Mortgage Equity Partners will order an appraisal to ensure the home’s value aligns with the loan amount. Ordering the appraisal is the lender’s responsibility.
You will then finalize your financing by working closely with your loan officer to complete the mortgage application process. Since you have hopefully already been pre-approved, this process should be much easier.
Your closing agent will order a title search, ensuring the home is free of any liens and can be sold legally. Your closing agent will also assist with securing title insurance. Then, you must secure homeowners’ insurance to protect your investment!
And finally, close on your new home! The closing process can be intense, but your team, which includes the loan officer, realtor, and closing agent, will walk you through the details. You will review a closing disclosure, sign the necessary paperwork, pay closing costs, and receive the keys to your new home!
“I will forever believe that buying a home is a great investment. Why? Because you can’t live in a stock certificate. You can’t live in a mutual fund.”
-Oprah Winfrey
Celebrating national homeownership month
National Homeownership Month celebrates the profound impact of owning a home on individuals, families, and communities. It underscores the importance of financial stability, community investment, and personal satisfaction that comes with homeownership. For first-time homebuyers and real estate investors alike, this month serves as a reminder of the opportunities and resources available to help you achieve your real estate dreams. Let’s make this June a stepping stone toward your future as a homeowner or a residential real estate investor. If you have questions about the home loan process or which programs will work best for you, contact our experienced loan team to learn more.
Sources:
Housing Matters
Fannie Mae
Freddie Mac
VA Benefits
