Dealing with Financing

Dated: 04/17/2018

Views: 100

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. Sub-primes may be history, but you’ll probably still be shown homes you can’t actually afford. By getting pre-approved as a buyer, 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, do some research on the sales trends of similar homes in the neighborhood with sites like Zillow. Consider especially sales of similar homes in the last three months. For instance, if homes have recently sold for 5 percent less than the asking price, your opening bid should probably be about 8 to 10 percent lower than what the seller is asking.


Blog author image

Lana Eckel-Rife

Buying or selling a home is more than just a transaction: it’s a life-changing experience. That’s why I’m dedicated to providing clients with exceptional, personalized service. I take great prid....

Latest Blog Posts

Back to School Stranger Danger

It’s back to school time and that means crazy busy schedules, carpooling and getting the family back into a routine. In all the excitement, it is important to take the time to educate children

Read More

7 Signs It Might Be Time To Downsize

The “American Dream”– a sprawling home with a big backyard and tons of space for the kids and grandkids. But, that dream comes with bigger utility bills and tons of upkeep.

Read More

5 Ways You Can Deter Burglars While Away on Vacation

Summer is supposed to be a fun time of year and it usually is for most families. But, do you know what is not fun? Coming home from an amazing vacation to find that your home was burglarized while

Read More

Dealing with 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

Read More