Most people receive all sorts of advice from friends and family when they decide to purchase a home. The amount of information available on the web is astounding!
I've been selling real estate for many years now. I field questions from buyers and observe common mistakes quite frequently. Typically I try to educate my clients on the things they should be concerned with, particularly when it comes to buying a property they may regret.
Here are 10 things to consider when buying a home:
Please note, this simple list is not complete! A real estate purchase brings with it many individual needs. If you want to discuss your goals and how to properly align them, call/text/email me! I look forward to hearing from you.
Homeowners thinking of using FHA for financing their next home will be happy to learn the mortgage insurance premium will be decreased by .25% starting on January 27, 2017.
The Federal Housing Administration (FHA) said this reduction will allow more "responsible borrowers" to purchase a home. On average the savings will be $500/annually for borrowers.
FHA Mortgage payments consist of interest, principal and MIP. Mortgage Insurance Premiums are used to insure the lender against the borrower's default. FHA allows borrowers to finance a home with as little as 3.5% down payments. Since the borrower doesn't have a lot of "skin in the game" the lender off-balances that with mortgage insurance.
While lowering the MIP payment is a good thing, interest rates are rising so the effect might not stimulate many new buyers as the savings will be a wash.
As with any financing, the best advice I can give is to work with a good lender, one who is consultative and will provide you with options to fit your situation.
It is not news that the Denver real estate market is on fire! Everyday I speak with potential buyers who are wanting to become homeowners. Sadly they are finding that each month they can afford less and less of a home, because prices are going up at a steady pace.
Some homebuyers are giving up, but others recognize the importance of hanging in there. This infographic tells the story of why! Waiting to purchase means becoming a homeowner will cost you more.
If you are a homebuyer wanting to find your home, please call me. Me and my team will assist you until we get the job done!
First time home buyers may often feel they are alone in the Denver real estate market. But the reality is they aren’t!
“In May, first-time buyers accounted for 59.1% of primary owner-occupied home purchase mortgages with a government guarantee, according to the International Center on Housing Risk. This share was up measurably from a year ago.”
Buying a home has become easier for those first time buyers. Lower down payments, down payment assistance programs, 100% gifting allowed from parents, historically low interest rates and lots of employment opportunities in Metro Denver are all reasons making it easier for first time buyers to buy a home.
The biggest challenge is finding the home! The inventory of homes for sale is not very large, but it is consistent. The biggest change here than from in the past, home buyers must be patient and diligent. It takes time to find a home, bid on it and have your offer accepted. I’ve written about how to do this previously in “How to write a Clean Offer.”
So if you are a first time buyer don’t give up. Research the best methods for obtaining your home and give me a call. I’m happy to assist you!
In the trenches of my business life, I spend a lot of time fighting for my clients. It’s been a wild and crazy year selling real estate. I’ve had several buyers who were employed with good income and credit scores basically get TAKEN by mortgage lenders. Let me tell you about it.
Toward the end of 2015 I started working with a nice gentleman who had read up on buying a home and visited his local lender to get prequalified. He did this all before he consulted with me. I was naturally impressed that he took the initiative and so we went off to find him a home.
It didn’t take long before we were under-contract with a nice home in N. Denver. Then the horror began. The lending institution was U.S. Bank. Their staff person was the horror. To make a very long story short I will synopsize. My buyer kept getting the run around from the lender. She kept asking for “inspections.” We normally do an inspection but then she wanted the inspection items reinspected, despite the fact the seller had the issues fixed and provided proof in the form of receipts. Re-inspections were not only expensive and unnecessary but not customary!
Additionally, she at U.S. Bank failed to tell my client he had to make an appointment with another institution to submit an application for the 2nd mortgage (assistance program) she had placed him in. By failing to do this she set the loan approval date back by over a month. This delay brought my client very close to being homeless! He had spent all his additional funds on non-customary inspections and engineer reports, he had given notice to his landlord and now he had no place to live.
At this point the failure of the U.S. Bank staff person to meet the contractual deadlines cost not just the buyer additional funds, but the seller as well. The seller was an estate and failing to close in the calendar year meant the estate got dragged out for another year!
Lucky for us the listing agent suggested we move the loan (Lucky also because they didn’t throw us overboard and let us extend the closing date!). We were delighted to do so because by this point we had ZERO confidence in the U.S. Bank staff person. I had gone “over-her-head” to see if we could get a solution, but her superior officer was just as inefficient.
So we moved the loan and started the process over.
The new lender put us in her “HERO LOAN.” Why? Because she got it done in less than 3 Weeks! My client ended up having a better loan package with a grant for his down payment and not a 2nd loan!
Now for the IRONIC part. The loan was brokered thru U.S. Bank! Only the players had changed!
Not all lenders are equal, that's for sure!
Another client came to me. We found a home for him within a day! I suggested he consult with one of my preferred lenders, but instead he decided to use a big online lender. The big online lender who’s name starts with a “Q” did a good, timely job to get the buyer approved. No kidding he was putting over 20% down!
But at closing the shock came.
The loan costs were excessive by $6000! Holy cow, that’s a year’s worth of car payments on a pretty nice car!
Every story has a moral to it. Here’s the moral to this story, consult a Realtor before making a decision on your loan.
There’s more to evaluating a loan than just the interest rate. There’s the reputation of the lender, the closing costs comparisons, can they get the job done? If it’s their first rodeo do you really want to risk it?
As a buyer you spend money when you start your loan, inspection costs are not fees you will ever see again if you don’t get that financing. Who wants to risk that? I certainly don’t!
Take the time to interview a lender or two. Ask for references from a Realtor. We work with these folks all the time, we know who is competent and who isn’t. That’s what we do.