Category Archives: Buying a Home

5 mistakes to avoid when buying your first home

(BPT) – Buying a home for the first time is comparable to the first time you ride a bike. You can learn about how it works from your parents and observe it from a distance, but you really won’t know the ins and outs until you actually sit down on the bicycle and start riding.

Like most beginners, first-time homebuyers will likely make a few mistakes as they initially go through the home-buying process in the upcoming year. Here are five mistakes first-time homebuyers often make, and how to best avoid them.

1. Waiting too long to make an offer

One of the biggest mistakes first-time homebuyers will make in 2017 is simply waiting too long to get into the real estate market, according to Jay Carr, a senior loan advisr for RPM Mortgage in Newport Beach, California. Because the rates look like they’re going to continually increase over the year, it’s important for buyers to get in as early as they can so that they can avoid paying more later on. If you see a home that you’re interested in and you have been thinking about entering into the market for some time, don’t hesitate too long.

2. Trying too hard to get less than the asking price

Many first-time buyers are younger, tech-savvy and are comfortable researching homes on their own. Overall, these are positive traits in a buyer. However, because these buyers are typically self-sufficient when it comes to other purchases, they often think they know best when it comes to what price they want to offer.

“Buyers rely too much on what they see on the internet instead of the good advice of what they would hear from a real estate agent,” Carr says.

Of course sometimes it pays off to be bold in an offer (in that you get to pay a lot less than the asking price), but often it can end up that the buyers are negotiating themselves out of a deal. It’s important to pay attention to your real estate agent, who is a seasoned professional, when it comes to putting in an offer so you don’t offend the seller and lose the house you want.

3. Not exploring all your financing options

Carr says many first-time buyers have grown up thinking that they need to save up for a 20 percent down payment before they can enter the housing market. While it is always great to have as much money to put down as possible before you purchase a home, it’s important to consider many of the new options available today.

One option is a home ownership investment such as the Unison HomeBuyer program, which typically provides up to half of the down payment you need. The money is an investment in the home, not a loan, so there are no interest charges or monthly payments. This new type of financing – which works in combination with a traditional 30-year mortgage – can offer greater flexibility and control to the home buyer. It allows you to cut the time needed to save for a down payment in half, lower your monthly payments and avoid mortgage insurance, or increase your purchasing power so you can buy the home you want.

4. Wanting the dream house right away

Everyone has a picture in their minds of what their first home will look like. Whether you envisioned a craftsman bungalow near all your favorite bars and restaurants or a classic ranch-style home with tons of land and no neighbors, chances are you’re going to have to trade up to that dream home from your first starter home.

“If you really like the house, you probably can’t afford it. If you think the house is just kind of below what you want it’s probably right in your price range. Get in the market rather than wait to get the dream house,” Carr says.

Carr advises those in the hunt for their dream home to focus on becoming homeowners now and to wait on their dream home until they have built up equity and have higher incomes in the future.

The median tenure of a homeowner in 2017 is about 10 years, but for the 20-year period before that it was only six. Believing that this won’t be your last house can take a bit of pressure off the home being perfectly suited for you.

5. Not having your own representation

Another mistake a first-time homebuyer can make is not having their own representation (meaning that they use the seller’s agent as their own buyer’s agent). While this is not always a bad situation, Carr cautions buyers to be careful that they have selected a good and trustworthy real estate agent that is looking after their best interests. In other words, you don’t want to pay an unfair price because someone is looking after their own best interest.

To learn more about the Unison HomeBuyer program and how it could help you, visit www.unison.com/homebuyer.

An affordable way to qualify for a home loan without that big down payment

(BPT) – For many Americans, the biggest hurdle in buying a home is the 20 percent down payment they think is required for mortgage approval. According to a recent survey by the National Association of Realtors, 34 percent of respondents believe they need more than 20 percent. Meanwhile, low down payment mortgages account for a significant amount of home buying annually.

Families with down payments as low as 3 or 5 percent have been able to purchase a home thanks to private mortgage insurance (MI) for 60 years. Since 1957, MI has helped 25 million families become homeowners. In the past year alone, MI helped more than 795,000 homeowners purchase or refinance a mortgage. Nearly half were first time homebuyers and more than 40 percent had incomes below $75,000.

How MI works

Mortgage insurance is simple. In addition to the other parts of mortgage underwriting process — such as verifying employment and determining the borrower’s ability to afford the monthly payment — lenders traditionally required 20 percent down to ensure the borrower had some of their own money committed before the bank would provide a loan. This is where MI enters, bridging the down payment divide to qualify borrowers for mortgage financing.

Benefits of MI

* It helps you buy a home, sooner. For the average firefighter or school teacher, it could take 20 years to save the typical down payment. Private mortgage insurers help borrowers qualify with as little as 3 percent down.

* It’s temporary, leading to lower monthly payments. MI can be cancelled once you build 20 percent equity, either through payments or home price appreciation — typically in the first five to seven years. This is not the case for FHA loans, the federal government’s form of MI. The majority of which require MI for the life of the loan.

* It provides several flexible payment options. Your lender can offer several options for MI payment; the most common is paid monthly along with your mortgage.

* It’s tax-deductible. Subject to income limits, MI premiums are tax deductible — similar to interest paid on a mortgage. In 2014, 4 million taxpayers benefited from this deduction with the average being $1,402.

MI is a stable, cost effective way to obtain low down payment mortgages, and offers distinct benefits to borrowers. It’s been a cornerstone of the U.S. housing market for decades, providing millions the opportunity to own homes despite financial barriers. Ask your lender for low down payment options using MI. Visit www.USMI.org for more information.

3 reasons why winter is a smart time to buy a home

BPT) – Don’t give up on buying a home as winter nears. In fact, December through February may be better for buyers than the busy season in spring and summer.

Enjoy less competition and lower prices.

Fewer properties are typically available during the winter, as sellers and buyers aim to complete transactions before the school year begins. You can turn that to your advantage.

“In winter, there are fewer properties, but it’s less competitive, with fewer buyers per property,” says Greg Jaeger, president of USAA Residential Real Estate Services Inc., and former real estate agent.

The more favorable supply-demand balance can lower prices. In the winter, “negotiations are slower-paced and there is more negotiating room,” Jaeger says. Also, winter sellers may be more motivated, especially if they’re forced to sell by divorce or by corporate or military transfers.

In January and February, homes cost 8.45 percent less on average than in June through August, according to NerdWallet research conducted using Realtor.com data from 2014 and 2015. That’s in line with what Jaeger sees, particularly in competitive real estate markets where supply is limited.

Lower prices help at closing – and over the life of your mortgage.

A lower price eases your home purchase in many ways, Jaeger says. It lowers your down payment, any closing costs that are calculated as a percentage of the home’s sale price and your mortgage payments. There’s also less of a seller’s agent commission bundled into the sales price. These savings help when you buy, and they add up over the life of your mortgage.

The right agent can help.

When supply is limited, the right agent can help you get a jump on other buyers. Agents who are well connected learn about properties before they are listed.

The right agent understands the market where you are buying. That includes doing competitive market analysis so you understand what the house is worth.

Look for an agent who suits your style. For example, if you’re a statistics geek, you need an agent who’ll provide them. “Just having access to statistics doesn’t mean they have analytical skills and will use them,” Jaeger says. He recommends USAA’s Real Estate Rewards Network as a source for seasoned agents who deliver great service to USAA members.

Many resources are available to help consumers find the right agent, including USAA Real Estate Rewards Network, a free program that gives members access to USAA’s network of real estate agents and rewards when they buy or sell.

Which Is Cheaper: To Buy or Build New?

MP900202134[1]On the surface, buying an existing home seems like the most affordable route to go. After all, the median cost of an existing single-family home is $223,000. On the other hand, the average cost for building new construction averages $289,415.

Obviously, there is quite a bit of variations in sorting out those costs. Plus, the price you pay upfront is only part of the equation when deciding to buy an existing home or build a new one.

A recent article at realtor.com® laid out some of the pros and cons financially of buying a new versus an existing home. Make some of these considerations when weighing the best financial decision:

Square footage: New-homes tend to be more spacious than existing ones at a median size of 2,467 square feet. As such, when you take the average cost of a new build, it breaks down nationally to about $103 per square foot, which is actually lower than the cost of existing homes.

Finishes: With an existing home you inherit all the features and finishes, even if you don’t want them. That may mean you need to budget in some renovations if you’d like to redo anything. With a new home, you’ll be able to choose all the features and finishes yourself and have it set in the price from the get-go. 

Maintenance: Older homes tend to require more maintenance. The cost of upkeep can be pricey too, depending on what needs to be done. For example, the average furnace tends to last about 20 years. When it needs replacement, expect to pay about $4,000. Not to mention, that shingled roof will likely need replacement after about 25 years at a cost of at least $5,000. On the other hand, newer homes tend to need less maintenance because all of the major appliances are brand new and under warranty.

Energy efficiency: Older homes tend to have dated windows and appliances, which can result in less energy efficiency and pricier energy bills. New construction tends to nearly always trump older homes in energy efficiency, according to Kyle Alfriend with the Alfriend Real Group RE/MAX in Ohio. Indeed, homes built post-2000 consume 21 percent less energy for heating than older homes.

Landscaping: Older homes tend to have mature landscaping already in place. And that landscaping can up a person’s property value by thousands. Further, those trees can save an estimated 56 percent on your annual air conditioning bill, according to the U.S. Forest Service. With newer homes, you’ll have to likely pay thousands to install landscaping and may have to wait years to get it to the point you desire.

Appreciation: With an older home, you can see the trajectory of prices based on previous sales prices and of comps nearby. New homes can be a gamble since they do not come with a proven track record of plentiful comps that have been tested over time.

Source: “Is it Cheaper to Buy or Build a House? Compare the Pros and Cons,” realtor.com® (Jan. 5, 2017)

Tech tools that can help you find a mortgage and home faster

23482146(BPT) – Whether you’re a first-time or experienced homebuyer, chances are a good portion of your real estate journey will take place online. In fact, four in 10 homebuyers start their house-hunting with an online search, according to the National Association of REALTORS. It’s easy to understand why: Online tools and apps can make the homebuying experience — including finding a mortgage — easier and more enjoyable.

If you’ll be shopping for a home this fall and winter, use the tools homebuyers find most useful, according to the Bank of America Homebuyer Insights Report:

* Mortgage calculators — It’s important you’re as comfortable with your mortgage terms and lender as you are with the home you’re paying for. An affordable mortgage helps homebuyers reap the full benefits of home ownership, including building equity and long-term financial security, and a mortgage calculator can help you understand what you would pay each month, as well as estimate monthly mortgage payments and rate options. As the Homebuyer Insights Report revealed, more than half of Generation X homebuyers and 46 percent of millennials and baby boomers use mortgage calculators during the home shopping process.

* Finance websites — Home shoppers can learn a lot about mortgage options and a bank’s customer service through websites that feature reviews of mortgage loan officers and lending institutions. More than a third (36 percent) of first-time homebuyers and over a quarter (28 percent) of experienced homebuyers use bank apps or websites to research reviews of lenders and loan officers.

* Loan status portals — Applying for a mortgage can sometimes be overwhelming, but real-time loan status information is transforming the process. For example, Bank of America’s Home Loan Navigator allows mortgage applicants to securely upload, submit and sign documents, get real-time status updates on their application and loan, receive important documents and disclosures and even communicate with experts via secure messaging.

* Mobile real estate listings — With many home listing websites available, it can be difficult to narrow down online searches to homes that meet all your criteria in your location of choice. Using a bank’s online real estate center can help you refine your home search or, if you’re selling, it can help you determine your home’s estimated value. And some even provide the ancillary information you’re looking for – like school data and walkability scores — to make a home purchase decision.

* Down payment sources — Saving for a down payment can be one of the most challenging tasks of buying a house. It’s sometimes difficult to know how much you’ll need for your down payment, or to figure out how to fit the extra savings category into your monthly budget. You can find numerous down payment calculators online, but Bank of America’s Down Payment Resource Center goes a big step further than most by offering a searchable database of more than 1,000 local and national assistance programs that may be able to save you money on your down payment.

* Social media — Decorating your home is one of the most enjoyable aspects of home ownership. Many buyers turn to social media resources like Pinterest for home decor inspiration. In fact, 49 percent of millennials use Pinterest, 37 percent Facebook and 33 percent Instagram for home decorating ideas, while 32 percent of Gen Xers use Pinterest, 37 percent like Facebook and 11 percent favor Instagram, according to the Homebuyer Insights Report.

* Home design apps — With inspiration in hand, homebuyers can use home design apps to put their ideas into virtual reality. These apps allow you to take and store room measurements, make notes on design ideas and see virtual representations of what your decor plans will look like in your home. From white walls to fully-furnished, many design apps can help you visualize your dream interior for free, and more robust versions are available for purchase.

To learn more about home buying and mortgages, visit Bank of America — Home Loans.

An affordable way to qualify for a home loan without that big down payment

(BPT) – For ma30200199ny Americans, the biggest hurdle in buying a home is the 20 percent down payment they think is required for mortgage approval. According to a recent survey by the National Association of Realtors, 34 percent of respondents believe they need more than 20 percent. Meanwhile, low down payment mortgages account for a significant amount of home buying annually.
Families with down payments as low as 3 or 5 percent have been able to purchase a home thanks to private mortgage insurance (MI) for 60 years. Since 1957, MI has helped 25 million families become homeowners. In the past year alone, MI helped more than 795,000 homeowners purchase or refinance a mortgage. Nearly half were first time homebuyers and more than 40 percent had incomes below $75,000.

How MI works

Mortgage insurance is simple. In addition to the other parts of mortgage underwriting process — such as verifying employment and determining the borrower’s ability to afford the monthly payment — lenders traditionally required 20 percent down to ensure the borrower had some of their own money committed before the bank would provide a loan. This is where MI enters, bridging the down payment divide to qualify borrowers for mortgage financing.

Benefits of MI

* It helps you buy a home, sooner. For the average firefighter or school teacher, it could take 20 years to save the typical down payment. Private mortgage insurers help borrowers qualify with as little as 3 percent down.

* It’s temporary, leading to lower monthly payments. MI can be cancelled once you build 20 percent equity, either through payments or home price appreciation — typically in the first five to seven years. This is not the case for FHA loans, the federal government’s form of MI. The majority of which require MI for the life of the loan.

* It provides several flexible payment options. Your lender can offer several options for MI payment; the most common is paid monthly along with your mortgage.

* It’s tax-deductible. Subject to income limits, MI premiums are tax deductible — similar to interest paid on a mortgage. In 2014, 4 million taxpayers benefited from this deduction with the average being $1,402.

MI is a stable, cost effective way to obtain low down payment mortgages, and offers distinct benefits to borrowers. It’s been a cornerstone of the U.S. housing market for decades, providing millions the opportunity to own homes despite financial barriers. Ask your lender for low down payment options using MI. Visit www.USMI.org for more information.

Are You Thinking About Buying a Home?

fall-buying-guideThe process of buying a home can be overwhelming at times, but you don’t need to go through it alone.

You may be wondering if now is a good time to buy a home…or if interest rates are projected to rise or fall. The free eGuide below will answer many of your questions and likely bring up a few things you didn’t even know you should consider when buying a home.

Check it out, and feel free to get in touch if you have any questions.

http://www.teresabutler.com/BuyingaHomeFall2016.pdf

Is Summer Truly Housing’s Hottest Season?

Fotolia_32750180_XS-267x300The spring is traditionally real estate’s busiest time of year. But one real estate economist believes that this summer may trump the spring as the most robust time of buying or selling a home for 2016.

“From a buyer’s perspective you have more choice, but you’re also competing against far more buyers,” says Ken Johnson, a real estate broker as well as a professor of finance and associate dean at Florida Atlantic University’s College of Business. “Sellers are also looking to sell over the summer, particularly if they have children and want to get a deal done before school starts again.”

The groundwork for a booming summer market has already been laid out. New-home sales in April posted their strongest month in more than eight years. Existing-home sales were up for the second consecutive month. What’s more, historically low mortgage rates may increase the demand for housing this summer.

“In some cities, especially in the Midwest, prices have plenty of room to go up,” says Johnson. “Real estate is still a really good buy in places like Cincinnati, Chicago and Cleveland.”

In some markets – like Dallas, Denver, and Houston – home prices are rising rapidly and some people are concerned prices may be overheating. However, Johnson doesn’t predict a downturn in prices any time soon, and he believes most markets will continue to perform strongly due to strong demand. That said, he does believe that those looking to buy into real estate as an investment may have a more difficult time finding a good deal.

“In markets like South Florida, Seattle and Portland, you may find you’re going to start to see lower probabilities that you’ll be able to successfully market your property,” Johnson says. “But while you may see extended marketing time and prices going flat, there’s no reason to believe there’s going to be a big dent in prices in these cities.”

Source: “Economist Says Summer May Be the Hottest Season to Buy and Sell,” RISMedia (June 5, 2016)

Five home-buying trends for this year’s market

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5 top home-buying trends for this year’s market

(BPT) – If you’re in the market for a new house this year, don’t be fooled by the brisk chill in the air – the spring house-hunting season is actually closer than you think. That means now is the perfect time to start your planning. Space requirements such as bedrooms, bathrooms and square footage are essential, but a house is more than just shelter, it’s your home, and the great ones not only have everything you need, but everything you want.

“Each family lives in their home differently,” says Beazer Homes Senior Creative Manager Michael Phillips. “Some buyers prefer a private dining room, while others want an open-concept kitchen with a more casual eating area. Where one buyer might prefer an owner’s suite on the main level, others may want all their bedrooms on the upper level.”

Although every home buyer’s needs are unique, the market is often dictated by common trends. To better understand your own buying preferences and to see if you’re aligned with others in the real estate marketplace, take a look at these five home-buying trends.

1. Function over aesthetics. When you think kitchen trends, you probably think of design features like granite countertops and stainless steel appliances. While both these options remain popular and are common in new construction, surveys by the National Association of Realtors and the National Association of Home Builders (NAHB) found that buyers were extremely interested in functional attributes like new appliances, eat-in layouts, walk-in pantries and double sinks.

2. Living roo23268680ms are no longer a must. Given today’s diverse home-buying population, the formal living room is becoming less prevalent. “Many buyers would rather use traditional living room square footage in a new way,” said Phillips. “We’re seeing families using the living room as a home office or choosing to forgo the space altogether in exchange for extra square footage in other areas of the home.”

3. New is number one. According to the NAHB, more than half of surveyed buyers want to purchase a new home. It can be a challenge for buyers to find everything they desire in a resale home, and because renovations are often costly and time consuming, it’s hard to deny the appeal of purchasing a brand-new home that is move-in ready.

4. Let there be (energy-efficient) light. Home buyers have coveted homes that make good use of natural light for years and that trend is continuing in 2016. In addition to large windows, NAHB research shows homeowners are putting an increased emphasis on the energy savings that accompany the installation of high-performance windows.

5. Make it your own. Personalizing a new home is easier and more affordable than ever before, thanks to offerings like Beazer’s Choice Plans, which are flexible floorplans that allow you to personalize the most lived-in spaces in your home at no additional cost. Whether you want a kitchen for entertaining or a breakfast nook for family dining, an office space instead of an extra bedroom, you choose … and Beazer won’t charge you for selecting the best layout for your lifestyle. You can learn more about your options and how to create your own dream home at www.beazer.com/choice-plans.

Start your preparation today

It’s never too early to start preparing for shopping for a new home. The more work you do ahead of time, the more time you can spend exploring the market. So start your research now and you’ll be moved into the home of your dreams before you know it.

Put Teresa’s knowledge and expertise of the building industry to work for you to find your new home. Learn more.

Let’s get started! 614-565-8161 or Teresa@TeresaButler.com