June Real Estate Roundup: 3 Tips for Homeownership Month

June is National Homeownership Month, so it’s a great time to share our three tips for your buyers to make their dream home possible this year! 

Build Up Your Savings    

Although buyers don’t actually need that mythical 20% down payment, having savings on hand will help them qualify for a mortgage and provide funds for the down payment and closing costs. Remind them to hold off on large purchases, to cancel streaming services they don’t use, and cut back on eating out and coffee shops. 

And FYI, the minimum required down payment percentage is as follows:  

• Conventional: For some first-time borrowers, the requirement is as little as 3%. The standard requirement is 5%, but if your Conventional buyers can put down 20% or more, they will avoid private mortgage insurance (PMI). 

• FHA: Only 3.5% is required, and Atlantic Bay offers two FHA assistance programs – Buyer Boost and Chenoa Fund – that can provide a second mortgage to cover the down payment for 100% financing. 

• USDA and VA: There is no down payment required, but your buyers can put money down if they like.  

Remember, your buyers can also take advantage of down payment assistance programs for both down payment and closing costs. Ask me for help!  

Improve Credit Scores

Credit scores are a vital part of loan eligibility and can help buyers get a better interest rate. Remind your clients to... 

• Get in the habit of making smaller purchases every month with their credit cards, such as groceries or gas, and routinely pay them off.  

• Avoid maxing out their credit cards, missing or late payments, or closing accounts, as these actions quickly drop their credit score. 

I am happy to do a “soft pull” (no hit on their report) on your borrowers’ credit and come up with a plan to build it. Atlantic Bay offers credit rescoring, as well as our SmartPath program to help prepare them for homeownership. 

Lower the DTI 

The debt-to-income (DTI) ratio represents how well buyers manage their money. Lenders look at this percentage to determine the buyer’s risk in taking on another payment. Here’s how to calculate it: 

• Add up monthly bills like rent, credit cards, student loans, and alimony. Don’t include utilities, groceries, etc. 

• Divide the total by monthly gross income (before taxes). 

• The result is the DTI. A good rule-of-thumb is 43% or lower – 36% is ideal.

To improve DTI, borrowers should pay off as much debt as they can reasonably afford before committing to a mortgage. I can help buyers make a plan. 

Homeownership for All 

Finally, Atlantic Bay is committed to honoring our role and responsibility as a community lender by providing the tools and resources around homeownership many Americans are searching for, including affordable housing education, products, and programs like Tu Hogar, Tu Futuro, which connects your Spanish-speaking buyers with our approved, bilingual mortgage team members. 

I’m excited to help your clients achieve a home of their own. Reach out to me with any questions!