Why use Loftium’s down payment? Here are the top 3 reasons our buyers keep telling us.

Affordability is at the top of every homebuyer’s mind. Depending on your income and savings, there are different reasons why you may need a boost from Loftium to afford a home. Let’s take a look at the top three scenarios why using Loftium can make a substantial impact on your affordability.

1) Your income and small savings are keeping you from getting pre-approved for a loan, period.

You want to get your foot in the door of homeownership but with little in savings, combined with a household income of less than $80K, it’s difficult to get pre-approved at a home price where you can actually buy something with in Seattle.  Given 5% down is required up-front for a conventional loan, you need Loftium’s down payment to buy.

Here’s a very common Seattle homebuyer profile:

  • Total household income: $75,000
  • Down payment savings: $5,000
  • Max home price without Loftium: $100,000
  • Max Home Price with $50K boost from Loftium: $497,306

Loftium is the key to homeownership for you. If you’re in this scenario, you’ll likely need to budget a little more tightly for the monthly mortgage payments, but if that means the difference between owning a home or not, cutting back on some expenditures could be worth it. Plus, the Airbnb income you’ll receive each month with Loftium can help add room to your budget.

2) You’ve got high income but low down payment savings.

You can easily afford the monthly mortgage payments but your down payment savings are too low to qualify you for a home price at which you’d like to buy. Want another bedroom? A better neighborhood? Enter Loftium.

Check out the before and after:

  • Total household income: $100,000
  • Down payment savings: $20,000
  • Max home price without Loftium: $400,000
  • Max Home Price with $50K boost from Loftium: $659,742

Loftium’s down payment boost combined with your income means you can get pre-approved for a much higher home price. Don’t let your down payment savings keep you from buying when you can totally afford the monthly payments. Prices in Seattle are outpacing income growth – it may be the perfect time for you to buy with Loftium’s help.

3) You’re crashing up against the conventional loan limit.

You don’t want to or cannot qualify for a jumbo loan or secondary mortgage, but in Seattle, you can only borrow $667,000 on a conventional mortgage before you have to look for other options. Jumbo loans generally require months of backup cash in the bank, and a 10% down payment. Secondary mortgages come with fluctuating, high interest rates. Either way – it can be very costly & you may not qualify for either one.  Use Loftium to keep your loan size under $667,000.

Here’s the breakdown:

  • Total household income: $150,000
  • Down payment savings: $60,000
  • Max home price without Loftium: $727,000
  • Max home price with $50K boost from Loftium: $777,000

Adding Loftium’s down payment can keep you in the conventional loan limit range so you can use one, clean conforming loan with a lower interest rate – saving you thousands over time.

You can afford to buy with Loftium.

From buying a home you love to owning one at all, our down payments can make a big difference in your personal affordability. See how much home you can afford with Loftium’s down payment.

 

In each case we assume 5% down payments and 43% debt to income ratio, the highest you can have and still get approved for a mortgage.

 

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You don’t have to put 20% down and why it’s smart not to.

We hear this from homebuyers a lot: “Wait, I don’t have to put 20% down?” Nope! You don’t have to. In fact, you can put as little as 5% down and there are legitimate reasons why it’s actually a good idea. Depending on what you choose, 20% or less, there are pros and cons. Let’s take a look.
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Here’s the income you need to live in each Seattle neighborhood

People often come to us thinking that even with $50k of  down payment assistance from Loftium, they won’t be comfortable with their monthly mortgage payments based on their current income. But you might be surprised–the dream home for many Seattleites is within reach, it’s just a matter of looking in the right neighborhood. 

To get you started, we’ve figured out the necessary annual income needed to purchase Loftium-eligible homes (2+ bedrooms, no HOA) in Seattle neighborhoods. Take a look:

Neighborhood Bottom 25% of home prices* Monthly payment (w/ 5% down)* Annual income (w/ 43% DTI)*
South Park $346,250 $1,959.09 $54,672.17
Rainier Valley $421,250 $2,383.44 $66,514.52
Delridge $439,250 $2,485.28 $69,356.68
Beacon Hill $490,000 $2,772.43 $77,370.00
Bitter Lake $492,500 $2,786.57 $77,764.75
Lake City $496,000 $2,806.37 $78,317.39
Columbia City $566,250 $3,203.85 $89,409.72
Green Lake $633,750 $3,585.76 $100,067.84
Ballard $689,950 $3,903.74 $108,941.70
Madison Park $708,000 $4,005.87 $111,791.76
U District $722,750 $4,089.33 $114,120.75
Ravenna $725,000 $4,102.06 $114,476.02
Capitol Hill $740,500 $4,189.76 $116,923.44
Fremont $784,000 $4,435.88 $123,792.00
Queen Anne $788,500 $4,461.34 $124,502.55

Want to run your numbers with Loftium, personally? Schedule your sit-down to buy in a neighborhood that works for you.

And check out these great homes that sold in each neighborhood (Loftium’s down payment offers are in yellow):

South Park (sold October for $325,000)

 

Rainier Valley (sold October for $380,000)

 

Delridge (sold August for $425,000)

 

Beacon Hill (sold August for $389,000)

 

Bitter Lake (sold July for $461,100)

 

Lake City (sold September for $485,000)

 

Columbia City (sold July for $555,000)

 

Green Lake (sold September for $624,950)

 

Ballard (sold October for $580,000)

 

Madison Park (sold July for $680,000)

 

University District (sold August for $725,000)

 

Ravenna (sold July for $590,000)

 

Capitol Hill (sold August for $592,500)

 

Fremont (sold August for $555,000)

 

Queen Anne (sold August for $735,000)

*We sorted homes by price under $1,000,000 and selected the lowest 25%  that sold in the last 3 months that met Loftium criteria. These numbers are based on a 5% down payment and we assumed 1.5% closing costs (but actual costs may vary). The monthly payment includes principle, interest, taxes, insurance and PMI. 43% is the max debt-to-income ratio you can have to get a conventional loan.

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Should I buy a house now or is Seattle just a bubble?

As a millennial, my formative experience with housing was the 2008 financial crisis.  I didn’t know much, but I learned not to buy in the middle of a bubble! With rapidly rising housing prices in Seattle (and many other cities), you may be wondering – is it the right time to buy?

While no one knows the future of the housing market, I can share my personal story and why I started Loftium to help homebuyers with the down payment.  

Continue reading “Should I buy a house now or is Seattle just a bubble?”

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Affordable Homes in Seattle Do Exist – Check Out These Gems

You may be looking at Seattle’s real estate market and think affordable homes don’t exist – but they do! And it’s worth hopping on them now, as prices are rising quickly. Up and coming neighborhoods like Beacon Hill, White Center and Columbia City will provide a lot of bang for your buck.

Check out these homes that recently sold in Seattle under $500,000:

Continue reading “Affordable Homes in Seattle Do Exist – Check Out These Gems”

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Laura Bought Her 1st Home with Loftium’s Down Payment.

We couldn’t be more excited to work with Laura, one of our first Loftium homebuyers. She’s got a can-do, entrepreneurial attitude and was determined to get a house in the city she loves, Seattle.

Working with Loftium helped Laura to realize that dream.  Check out her video to see how.

A few highlights:

  • Laura put 5% down with help from Loftium, and still outcompeted offers on a Capitol Hill standalone home with a mother-in-law unit for under $600k!
  • She thought it would be years before she could buy, and definitely not in the Capitol Hill neighborhood.
  • Laura and her dad are both handy, and bonding over Home Depot trips + some quick, easy remodeling to get her mother-in-law unit extra Airbnb ready.
  • One of the biggest challenges for Laura was balancing the down payment, remodeling costs, and the monthly payment.  She chose to use Loftium because we helped with all 3 things and gave her financial breathing room as a first-time homebuyer.

Congrats on the new house, Laura!  We can’t wait to see how you transform your space in the next few weeks.

Ready to buy and want $50k for your down payment? Get started today.

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Loftium is launched to help with your down payment!

We are so excited to introduce you to Loftium! Loftium provides you with down payment funds in exchange for a share of future Airbnb income. Homebuyers who need Loftium’s down payment help simply agree to rent out a spare bedroom and split the income with us for 12-36 months after buying their new home.

What inspired us to create Loftium? Our team is comprised of millennial first-time and soon-to-be homebuyers who have personally struggled with the down payment, especially in our home city of Seattle. This isn’t a local problem – for over two thirds of renters around the country, the down payment is the biggest hurdle to owning a home.1 We understand intimately the difficulty of saving tens of thousands of dollars in the face of skyrocketing rent and student loan payments. We know not everyone has access to parental down payment gifts, and we feel strongly that this shouldn’t determine who rents and who buys. More than anything, we believe that with an entrepreneurial attitude and Loftium’s help, anyone can tap into the income potential of spare rooms to become a homeowner.

Loftium is working with Umpqua Bank to bring our down payments to Seattle homebuyers.  If you’re looking to buy a primary residence home (not an investment property) in Seattle, Loftium can offer up to $50,000 (not to exceed 10% down) on a conventional Fannie Mae mortgage.2  Best of all, Loftium does not have income limits or home price restrictions.

Here’s how it works:

  • You choose the home, qualify for the loan amount with Umpqua Bank, and put at least 1% toward the down payment.
  • Loftium will estimate the income potential of renting the home’s spare bedroom on Airbnb and will then offer a lump-sum prepayment to use toward the remaining down payment.
  • In exchange, you’ll be required to list a bedroom(s) on Airbnb and manage the rental process for a fixed period of time, ranging 12-36 months.

Benefits to the homebuyer:

  • Only 1% down payment is required by the homebuyer.3
  • Homebuyer will receive approximately 10%-40% of the Airbnb income each month.4
  • Loftium provides a starter supply kit, software, pricing and support to kick off your Airbnb hosting!

This down payment assistance is not a loan, financing, or other extension of credit to the purchaser. The homebuyer must still meet the lending requirements of Umpqua Bank.

Sign up at www.loftium.com to claim one of our first 50 Seattle down payments available this fall!

Have questions?  Come to the Loftium Twitter chat/party from 6-7 PM on 9/19 – join the conversation using #LoftiumLaunch or just join this chatroom.  We’ll be chatting about Loftium and how to afford a home in expensive cities, and giving away prizes to participants!

In Seattle and want to party?  We invite you to come to our Homebuyer Launch Party on Thursday Sept 21 from 6:30-9pm. Meet the Loftium team and receive goodies and prizes, including $100 Airbnb gift cards!

A huge thanks to our investors at DFJ, Founder’s Co-op, Nextview and WTI for believing in our ambitious vision to make home ownership accessible.

 

https://www.zillow.com/research/down-payment-hurdle-zhar-14790/

Eligible properties must be within Seattle city limits and within the home loan limits as defined by Fannie Mae.

3 Homebuyers may also need to cover closing costs for a home purchase.

Expected income received from the Airbnb rental will not be included in the borrower’s debt-to-income ratio/ loan qualification

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Homebuyer Highlight: Daniel, 29, Put 5% Down

Daniel, a senior test engineer, is a savvy first-time buyer who decided a little sacrifice was worth saving some cash. We were excited to catch up with Daniel less than a year after he bought because his story intrigued us. He put 5% down, chose to live just outside the city, and found multiple roommates to help with the mortgage.

Continue reading “Homebuyer Highlight: Daniel, 29, Put 5% Down”

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I Have No Idea How to Buy A House – A Lifelong Renter’s Perspective

I’ve wanted to own my own home for as long as I can remember. As a long-time renter, more than anything, I want freedom from landlords, the ability to control my space and the tangibility of owning a home- having a place to call my own is a kind of a dream.

 

There’s just something indescribable about being able to point at a house and say, “that’s mine!”

 

But buying my first home feels daunting and super scary.  It’s an overwhelming mystery. On the scale of life mysteries, homebuying is somewhere between setting up my wireless router and understanding quantum physics (see official mystery scale below):

Continue reading “I Have No Idea How to Buy A House – A Lifelong Renter’s Perspective”

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