First Time Home Purchasers, A Better Way to Buy
Your Real Estate Broker
Find an agent you could work with and someone who’ll work with you. Lots of real estate agents are going to seek to make a fast sale and before you get to their office, they are going to come up with about 12 properties, ask you to narrow the list down to five or 6, bring you out to view them and attempt to push you into buying one right then and there.
How about doing something different? Visit the agent at his place of business and go through a 20- or 30-minute consultation. Work with the broker to find out what it is you’re searching for and anticipate as a minimum in your new home. Have the agent put in your criteria into a VIP Buyer data base where the broker is going to send you frequent emails with houses that meet your criteria. You drive around these neighborhoods without the real estate agent. This way, you’ll be able to get the genuine feeling for the place and you can ascertain if that place is sufficient enough for you. When you’ve seen the right neighborhood, you take the real estate agent out to show you the home you selected. You’re in charge, not the agent.
Mortgage Pre-Approval
This process is part of the real estate broker interview. You could go online or complete a phone call application with the mortgage company before meeting the real estate agent. In any event, pre-approval is the initial step in what price home you can search for. Start with a pre-approval on a standard 30 year or 40-year fixed interest rate loan; this will be your base. Having a conservative, more realistic starting point will give you opportunity to go for a costlier property if you choose. By not starting out with ARM or interest only, you have room for the extras when you analyze the homes. For example, if a 30-year fixed mortgage allows you to purchase a $130,000 home and the ARM will allow you to get into a $145,000 home and the interest merely gets you a $160,000 home, you have the option. Remember this is your first house of several more you’ll own later on.
Stretch or Not to Stretch
You are pre-approved and found the ideal neighborhood. How much money are you willing to pay for a new home? You are aware of what the mortgage company will allow you, but will that still leave you enough money to go on summer vacation every year, weekend getaways, New Year’s Eve in Times Square? Will you be able to supply the new house the way you want to or will you have to delay or begin racking up credit card charges? This is where the big question comes, if you stretch too far and something comes about like loss of a job, sickness, company retrenchment, no promotions or salary increases that you will need because next year, your mortgage payment will go up. What do you do? Things can take place and they do happen to good individuals each day. That is just something to consider.
There are thousands of homes you can select from in each marketplace. Pick out the one that suits you best; pick the one that you will be able to afford this year and the succeeding year year in addition to all the other things you want to do.