Financing Comes First
BEFORE YOU SHOP FOR HOMES, DEAL WITH THE FINANCING
As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing with the dollar signs so that you can take down that “for sale” sign on your new home.
Get pre-approved.
In today’s market, buyers without atheir financing lined up are at a significant disadvantage. By getting pre-approved, you can save yourself the grief of looking at houses you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.
Choose your mortgage carefully.
Used to be the emphasis when it came to mortgages was on paying them off as soon as possible. Today, the debt the average person will accumulate due to credit cards, student loans, etc. means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, you have a lower monthly payment, with the option of paying an additional principal when money is good. Additionally, when picking a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate. If you plan to stay in the house for a long time—and given the current real estate market, you should—taking the points will save you money.
Do your homework before bidding.
Before you make an offer on a home, be sure your agent provides some research on the sales trends of similar homes in the neighborhood. Consider especially sales of similar homes in the last three months. Enlisting the services of a professional real estate agent can prove invaluable when it comes to determining value and negotiating the deal.
Ready to buy?
Having a buyer’s agent is about more than just opening doors. I provide my clients with exclusive customized market data and negotiating skill honed by experience. In today’s market, having the attention an agent provides will save your sanity. And remember: Real estate is about people.