Tag Archives: first time home buyer

June is National Homeownership month

Homeownership is a goal of many people.

To get to that goal there are several things you should do and several things to consider.

THINGS TO DO TO REACH YOUR GOAL

When you make a plan to get yourself to your goal of homeownership, learn about first-time homebuyer savings accounts. This account, like any other, is trackable and you can see how you are building your savings toward a home purchase. NerdWallet.com has a list of of these programs available in each state and the District of Columbia.

The first step you should make in purchasing a house, before contacting a real estate agent, is meeting with a mortage loan banker who can tell you what kind of mortgage program you qualify for and what your spending limits look like.

You might find that you currently don’t qualify, but the loan officer can advise you of the steps to take that will qualify you. Check with your bank if they have a mortgage department. You already have a relationship with that bank so talk to them first about helping you purchase a home.

Search the internet for homes in your price range. If you’re purchasing in the town you currently live, drive around and familiarize yourself with neighborhoods if you haven’t already. If you have to commute to work, decide what neighborhoods are close enough that you can afford. Concerned about demographics? Search the web for information, call the local police department, contact a city or county representative. Follow the city or town’s social media pages.

Interview a few local real estate agents. Use word of mouth referrals from friends and co-workers to find your agent. Referral companies charge agents a large fee to help you. You get to pick from a pool of people who agree to pay it. Wouldn’t you rather pick from someone with a personal reference from a friend?

You’ll want to be able to work with the agent your choose and feel comfortable with them handling your personal information. Interview at least one who is C2EX Endorsed and/or has completed the e-PRO course to find out their point of difference. C2EX is the National Association of Realtors’ Committment to Excellence program. e-PRO is a certification course teaching Realtors how to protect your private information in a digital world. They are optional continuing education classes.

THINGS TO CONSIDER

As a first-time homebuyer, you will want to have a real estate agent to represent you through a transaction for the following reasons:

  1. Your agent can point out homes that you might miss on your search. Maybe the listing doesn’t say much about the property but your agent has been inside and feels it is something for you to consider.
  2. He or she belongs to an association with protocols for handling COVID-19. Whether your or the seller are concerned, agents have a responsibility to follow what you both feel is necessary.
  3. Agents are skilled in negotiating purchase pricing and earnest money, and navigating disclosures, inspections, appraisal issues, and the closing process.
  4. An agent that is not representing the seller, will have your best interest in their care so don’t be too quick to call the agent listed on the sign in front of your dream home or visit a new construction development without your agent.
  5. Real estate agents can work with FSBO sellers, too. Don’t call a FSBO, let your agent do it for you. The FSBO seller is going it alone; you shouldn’t have to.
  6. Homebuying is emotional; it’s the biggest purchase most people make and agents understand that. He or she is on your side and can help you with the joy, frustration, fear, and excitement that a first-time homebuyer can go through during a purchase.
  7. Agents make great, life-long friends.

The National Association of Realtors has a First-time Homebuyers Guide that you can watch and listen to with numerous resources to help you navigate the process to become a homeowner.

June in National Homeownership Month. Best wishes reaching your goal.

Eileen Saunders, SRES REALTOR with Tommy Morgan Realtors BOF-Oxford 2092 Old Taylor Road #101, Oxford, MS 38655  662-404-0816/662-234-5344 eileen@tmhomes.com

 

Rent vs Own

you pay for housing whether you buy or rent

Renters often are able to purchase a home but do not for several reasons.

Many feel that they can’t afford to purchase a home.

But, as a renter, what are you doing each month?  You pay for your housing. And who benefits?  Well, you do have a roof over your head, but the homeowner is really benefiting.  The homeowner is building wealth.

A smart homeowner would charge at least their monthly mortgage for the renter to pay.  So, renter, you’re paying someone’s mortgage, at least. Why not pay your own?

With each rent payment, the homeowner’s mortgage balance goes down and soon he will own the house out-right. He can sell it and make money. If he was a wise investor, he will sell his house for more than he paid for it.  But regardless, the homeowner didn’t make a mortgage payment with his own money because he had renters pay it and when he sells the house, he will make all of the money back (unless he still has a balance that he needs to pay the bank, but he’ll get the rest.)  When you, renter, move out, you’ll be lucky to get your deposit back and so you’ll basically have nothing for all of the money you paid for housing.

If  you own your house, you are paying your monthly payment and paying down your mortgage balance. When you sell your house for the same or more than what you purchased it for, you pay the bank what you owe them and you get the rest.  You’ve been paying into it, you should get something out of it.

Many don’t have enough for a down payment.

There are many mortgage programs that your mortgage banker can tell you about and she can figure out which works best for you.  Some can get you into a house with 3% down. Others can get you into a house for even less. Of course, consider you might be paying an extra percentage in interest or paying a PMI cost. PMI is Private Mortgage Insurance and you can learn about it here.

There are many apps you can use to check your credit score. There are others that tell you what your estimated payments would be for a particular property or price.

Talk to your banker about receiving gift money from a relative for  your down payment.

Mississippi and a few other states offer a First-time Home Buyer’s Savings Account. Check with your bank to get your account started and set a goal.

Many would rather have someone make repairs or pay to replace faulty appliances for them.

I hear this a lot. An old apartment or an old house will most likely have old appliances which will go out.  Who knows how the previous renter took care of the appliances also. So many renters often call their landlords for repairs.

If you purchase a new home, you have new appliances. Your home has warranties including a 1-year builder warranty in Mississippi.

Should you purchase a pre-owned home, you’ll see on the seller’s disclosure the age and condition of appliances.  If they are all old or approaching that magic year things start breaking down, you can negotiate a seller-paid home warranty for the first year you own the home.  Most service calls are under $100 for repair or replacement. If you cannot negotiate it into the purchase, warranties run around $500 per year so you can set that aside to purchase yourself.  I have one and it has paid for itself many times.

Many do not think their credit score is good enough.

You never know what you can afford or what you can qualify for until you investigate. Go see your banker or check in with a local mortgage company.  A “ding” to your credit report for mortgage purposes is not the same as a “ding” to your credit report for a new credit card or car loan. Find out now so you can plan. Or, find out now, so you can be pleasantly surprised and can start shopping for a new home.

Do Not, I repeat, Do Not make any large purchases until after you close on your new house.  An washer, a new car, a sofa charged on a credit card will change your debt-income ratio and may cause you to lose the house if you don’t still qualify for that mortgage on closing day.

The whole process of purchasing a house and all of those steps to take along the way are scary.

It is a lot of fun looking online at houses for sale in your town.  It would be a lot more fun to actually look at them in person, on a mission to purchase one. That’s why you need to get a real estate agent to help you from the start.  Once you find out your financial status, start interviewing real estate agents. Don’t settle for the first one you talk to. You are hiring someone to help you make one of the most important, emotional and stressful purchases of your life. Make sure you feel comfortable with the agent you have helping you.  The agent with a ton of sales, and therefore experience, under their belt may not have the personality you need to work with. Find one with a lot of training. Find one you can trust.

So, you pay for housing whether you buy or rent. Which would you rather do?

Eileen Saunders, SRES REALTOR with Tommy Morgan Realtors  2092 Old Taylor Road, Oxford, MS 38655  eileen@tmhomes.com  662-404-0816 or 662-234-5344 Equal Housing