Blog :: 11-2014

Home Buyers Series: How To Avoid Paying Too Much Vol. 2

 

Shop for a mortgage before you shop for a home.

 

Being pre-approved for a home loan before hitting the market is the smart way to shop for a home. It tells sellers that you're a serious prospect, and you know in advance the maximum mortgage you can afford. Make sure you get a commitment in writing. Many buyers make the mistake of learning what they qualify for without getting a written pre-approval letter from their lender. The good news is that it's easier than ever to qualify for a home loan, and there are many good loans to choose from. Visit our Concierge Page for a list of respected mortgage lenders in our area who would be happy to get you started.

Home Buyers Series: How To Avoid Paying Too Much Vol. 1

Needs V Wants

Know what you're shopping for before you start.

Before you begin shopping for your next home, you should understand that there are two homes out there vying for your interest--the one that meets your needs and the one that fulfills your 'wants'. Ideally, you'd find a home that satisfies both. But, in reality you're going to find yourself confronted with choices. Do you choose the three-bedroom home with room for your family to grow, or the one with the big backyard and deck that's perfect for entertaining? Is having a big kitchen more important to you than a few extra rooms?

When you start shopping, you're going to find homes you fall in love with for different reasons. That's why you should list the features you want before you start shopping. Make a list with two categories--"Needs" and "Wants"--and prioritize the items you come up with. Understanding what you really need as opposed to what you'd like to have will help you keep your priorities straight as you shop around.

Don't let emotions cloud your judgment. Satisfy your needs first. If you find a home that meets your needs and fulfills some of your desires, great! Jump on it. The important thing is to know the difference before you get caught up in the excitement of the hunt.

VA Loans Provide Accessible Financing For Veterans

 

If you are a Veteran, you should know about the special mortgage benefits available to you through the VA Financing Program. Take advantage of this program! It's designed to make purchasing a home as affordable, and accessible as possible.

Here are the four biggest benefits of financing with a VA loan:

1. No Down Payment! This is HUGE, and certainly the defining benefit of the VA program. Instead of having to pony up the usual minimum down payment of 3.5-5% Veterans are given the opportunity to finance the entire cost of their home.

2. No Mortgage Insurance. Conventional borrowers who cannot afford at least a 20% down payment will be required to purchase mortgage insurance which can easily tack a couple hundred dollars onto their monthly mortgage payments. VA loans do not require mortgage insurance as they do not require a down payment. There is an upfront fee, however, that can be completely financed. If you were wounded during service that fee will be waived entirely.

3. Flexible Requirements. The VA program is designed to get Veterans into homes. With that in mind, normal requirements are suspended or made much more achievable. For example, a Veteran will receive full financing even with a credit score 100 points lower than what a normal borrower could get away with. Veterans can even secure financing if they have very recently gone through bankruptcy, foreclosure or a short sale. If you think you're situation puts you in too tough a spot to receive financing - think again! Please visit a lender to find out how they can help.

4. Closing Cost Limits. Unfortunately closing costs can never go away entirely, but the VA puts a cap on what Veterans are allowed to pay. They even make it possible for sellers to pay ALL of the buyers closing costs AND up to 4% of the loan amount in concessions. Keep that in mind when you and your Realtor negotiate the contract!

Thank you for your service. Visit our Concierge Page for a list of lenders we trust and work with regularly to help guide you through the mortgage process.