More Tips for First Time Homebuyers

 

Outside of classes, how do you figure out the main things you need to know for the buying process?  Here are some suggestions:

 

• Consider numbers experts give you on affordability as a ceiling, not a floor. Real-estate people often say the sum of your monthly mortgage payment, homeowner's insurance and property taxes shouldn't be more than 28% of your monthly gross income.  Meanwhile, your monthly debts, including your mortgage payment, shouldn't be more than 36% of your monthly gross income, they say.  But think of your circumstances.  Do you want to spend a lot of money at this stage of life on traveling?  Do you want to put money away so you can stay at home after a child is born?  Count your own values, dreams and limitations in your calculation.

 

• Try to put down at least 20% of a home's cost. Otherwise, you may have to buy "private mortgage insurance." If you don't have that much cash, consider a "piggy-back loan," which basically involves multiple mortgages for different percentages of the home's price.

 

• Borrow what you need to borrow, not what you can borrow.  Lenders will often offer you the maximum you can borrow but don't feel it's necessary to go maximizing your borrowing capacity.  If someone hands you a credit card, that doesn't mean you have to go max it out.

 

• Hire a lawyer, especially your first time out.  When you find a place you like, a lawyer can help you spot objectionable phrases and clauses that find their way into contracts.  If you don't have a lawyer who is familiar with all the details, all the legalese in the document and jargon, you're not going to understand it.

 

Talk to us about your buying options, and what might be best for you.  When buying real estate, one size does not fit all.  Everyone's circumstances are different, so there is no steadfast rule that covers every situation.  We'd love to assist you in answering any questions you may have. 

 

Leave us a comment below if you like.

 

 

Don't Try to Time the Real Estate Market

 

Although many economists predict that nationally, housing still has a way to go to reach bottom, you don't have to wait for that to happen to get a good deal.  In fact, it's better to buy when housing is trending down than when it reaches the floor, since at that exact moment, the balance of power begins to shift toward the seller again.

 

All a seller can do is suggest an asking price. The real price is whatever a buyer pays for it. 

 

In 2004 and 2005, home prices rose because buyers flooded the market –  now prices are falling because many buyers are sitting on the sidelines.  Meanwhile, the number of homes being built hasn't changed drastically; rather, supply is growing because existing-home sellers can't figure out what buyers are now willing to pay, so their homes are sitting on the market.

 

So if you see a house you like and can afford, make a bid now. And don't worry about insulting sellers with a "lowball" offer.  They may be desperate to move because of a new job, marriage, divorce, overstretched bank account or other motive.  Yours may be the only bid they've received in months and they may be very glad to have it.

 

Contact us now about buying a home… or leave us your comment below.. we'd love to hear from you.

 

 

Better to Buy a House Than to Pay Rent?  

 

That depends on when you buy, and how long you own.  Buy at the wrong time — like during the kind of buying frenzy that much of the country has just experienced — and you could well end up wishing you had rented instead.  

 

Boom market or bust, home buying has so many extra costs — from upfront "points" paid to a lender to title insurance and appraisal fees — that over the first five to seven years, a renter who invests the equivalent of a down payment in stocks could easily do better overall than a house buyer. 

 

Compounding that problem: Most homeowners move within seven years.   As the ownership timeline stretches out to 15, 20 or 30 years, however, the buyer will almost certainly do better than the renter, especially given the tax benefits of paying mortgage interest over traditional rent and the big rebate when the owner finally sells.  

 

Be sure to leave us your comment below about renting versus buying.    

 

 

Great Reasons to Buy a House Now

 

The real estate market in the U.S. today offers great opportunities for homebuyers.  People seriously considering buying a new house should decide to buy it now.  Here are few reasons why the real estate market now is so attractive for homebuyers:

 

1. This is a buyers market.

The supply is greater than the demand.  Meaning, there are more new houses on the market than buyers interested in buying them.  The great number of homes for sale means a wider choice of  houses and house prices.

 

2. Interest rates are at the lowest level.

Interest rates are now at the lowest level they have ever been before.  Between 1973 and 1981 they were ranking from 8.5% to 18.5 %.  In 2001, they dropped to about 7% and today the rate is about 6.5%.  Homebuyers are now able to buy more for less.

 

3. Within a year the market will improve.

Around the country, there is a constant increase in jobs and population.  Soon, the number of new houses will diminish and the inventory will shrink.  The demand for new houses will quickly rise along with house prices.  Therefore, homebuyers should buy now since house prices are still near the bottom.

 

4. Wages are increasing.

According to the Department of Commerce, wages are now increasing and the market is heating up.  Higher wages means a real possibility for many people to buy a new house.  Low interest rates enable homebuyers purchasing a better quality house at low monthly payments.

 

Are you thinking about buying a new house now?  If you have any questions/concerns regarding the real estate market now you may contact us or leave us a comment below.

 

 

Questions to Ask a Home Inspector

 

Detailed and carefully conducted home inspections are a priority before buying any property.  Here are a few questions future homeowners should ask a home inspector:

 

“How long have you been in business and how many home inspections have you performed?”

 

It is recommended you hire a home inspector with substantial work experience, such as someone working as a home inspector for at least 5 years.  A homebuyer should also ask an inspector about his professional certifications with nationally recognized industry organizations. It’s good to interview at least three inspectors and ask for a sample report and references from each.

 

“Can you tell me exactly what will happen during the inspection?”

 

This will eliminate any unpleasant surprises.  Ask your inspector whether you can follow him during the inspection. (But promise to stay out of his way.)  If the inspector is brief in the phone interview or personal interview, he may be hurried in his work as well.

 

“What will be included in my report and what type of format will you use for it?”

 

Too much information is never a problem in an inspection report. A professional home inspector should provide a homeowner with: 

•  an action checklist

 

• a customized narrative on the condition of all the home's major components and areas that are in need of maintenance

 

• the estimated repair and replacement recommendations

 

•  costs that will be involved if any work is needed.

 

“How soon will I get my report?”

 

Expediency is important with so many dates and deadlines to adhere to.

 

“If problems are found and then repaired, how quickly can you re-inspect the property so you can modify the original report?”

 

 

If time is a crucial factor for a homebuyer this information will be very helpful.

 

A professional home inspection can save a homebuyer thousands of dollars later.  Therefore, it is advisable to invest more before buying a house and don't necessarily hire the inspector offering the lowest prices on the market.

 

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