First-time homebuyers almost always make a few mistakes when buying their home. Perhaps they pay too much, choose the wrong type of mortgage or neglect to budget for needed home improvements.
Working with a trustworthy, experienced lender can help prevent such mistakes. But consumers also need to take responsibility for their budgets and choices.
[Click here to check home equity rates in your area.]
"Before buying a home, consumers need to develop a short- and long-term perspective on their purchase," says Michael Harrison, area director for MetLife Home Loans in Southwest Ohio.
Following are the four biggest financial mistakes of first-time homebuyers:
1. Spending the Maximum on Housing
Lenders qualify buyers based on their incomes and debt-to-income ratios without considering how much the borrowers spend on items such as transportation, savings, food and other necessities.
"A lot of first-time buyers are optimistic about the future and excited about buying a home, so they borrow the absolute maximum they can afford instead of allowing themselves wiggle room for a partial loss of income or for future expenses such as children," Harrison says.
Financial experts recommend that consumers decide how much they want to spend each month on housing before meeting with a lender.
"Every buyer should create their own budget and know their limits," says Stephen Adamo, president of Weichert Financial Services in Morris Plains, N.J.
Adamo says many first-time homebuyers experience a sizable change in their housing payments. Some new owners may go from $500 per month in rent to a monthly mortgage payment of $2,000, he says.
"You need to deal with payment shock," Adamo says.
2. Not Getting Prequalified Early Enough
Meeting with a lender for a buyer consultation and prequalification for a mortgage should be the first step toward homeownership. Yet many first-time homebuyers wait until they are ready to start house hunting before contacting a lender.
"It's never too early to set up a free buyer consultation with a lender," Adamo says. "Every buyer needs to get prequalified early enough in the process so that they can make some changes if they need to or correct errors on their credit report."
Some buyers may need to spend up to a year saving more money, increasing their incomes or cleaning up their credit before making an offer on a home.
A buyer consultation should include creating long-term financial goals and strategies for buying property, Adamo says.
3. Misunderstanding the Importance of a High Credit Score
While most consumers know it's important to have a high credit score, not everyone understands how costly a low score can be.
"All mortgage lending is done with a tier of interest rates and terms based on consumer credit scores," Harrison says. "A credit score of 720 or above will earn you the best rates and can potentially save you thousands of dollars."
A score of 680 to 720 can get you good mortgage rates, while a FICO score of 620 is usually about the lowest score to qualify for most loans, Harrison says.
Consumers should learn about credit scores the minute they start working, Harrison says.
Websites such as Bankrate provide information about how to improve your credit score.
Even after a mortgage approval, consumers must avoid applying for new credit or taking on new debt, Adamo says, because a second credit check is often required before settlement.
4. Choosing the Wrong Mortgage Product
First-time homebuyers today typically opt for a 30-year fixed-rate mortgage. Their conservatism is a reaction to stories about the dangers of interest-only mortgages and adjustable-rate mortgages.
But Harrison says home loan alternatives to a 30-year-fixed sometimes make more sense. For example, buyers certain they will be relocated by their companies within five years may find a 5/1 ARM "could be a much better mortgage," he says.
"There's no reason to pay a premium for a product you don't need like a 30-year loan," Harrison says.
Homebuyers eager to build equity in their homes or who are older and want to live mortgage-free in retirement should consider a 15-year fixed-rate loan or, if they can afford it, even a 10-year mortgage to reach their goals
Monday, August 30, 2010
Wednesday, August 4, 2010
5 Reasons to buy a home. Dont wait, now is the time!
Interest Rates are still low. Dont wait for home prices to fall further.
As Interest Rates rise back up, you will lose out on the savings of lowering home prices.
http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=244373
Contact me if you want to understand how that works!
www.yourhomeinstpete.com
Pete@yourhomeinstpete.com
As Interest Rates rise back up, you will lose out on the savings of lowering home prices.
http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=244373
Contact me if you want to understand how that works!
www.yourhomeinstpete.com
Pete@yourhomeinstpete.com
Tuesday, July 13, 2010
New Listing: Beautiful Brick Home in Historic Old Northeast Neighborhood of St. Petersburg, FL
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Tuesday, July 6, 2010
A valuable lesson learned on a Short Sale Close.
After a 4 month wait for a short sale to be approved by Bank of America, my buyer got the okay on his offer. The listing agent had not made me aware that the buyer had moved out until after we set the appointment for the inspection. So when we arrived at the inspection, there was no power and no water. When we called the city and power company we were told there were outstanding balances that needed paying before we could turn it back on.
Now, who is going to pay for this? Fortunately, my buyer felt it was such a good deal, he was willing to pay it, but not until I tried to get the seller to somehow pay for it. Eventually after a week, it has all been straightened out and we are ready to go back and do the inspection. But now I learned a valuable lesson.
As a buyer's agent, to make sure to check with the listing agent about the status of the seller's living arrangement and whether the bills have been paid ahead of time and to make the buyer aware ahead of time so they are prepared for what may come up.
As a listing agent, to have the seller remain living in the home and paying their bills, if at all possible. If not, to make the buyer's agent aware of the situation.
Communication is always a key element of Real Estate!
Now, who is going to pay for this? Fortunately, my buyer felt it was such a good deal, he was willing to pay it, but not until I tried to get the seller to somehow pay for it. Eventually after a week, it has all been straightened out and we are ready to go back and do the inspection. But now I learned a valuable lesson.
As a buyer's agent, to make sure to check with the listing agent about the status of the seller's living arrangement and whether the bills have been paid ahead of time and to make the buyer aware ahead of time so they are prepared for what may come up.
As a listing agent, to have the seller remain living in the home and paying their bills, if at all possible. If not, to make the buyer's agent aware of the situation.
Communication is always a key element of Real Estate!
Wednesday, June 9, 2010
Some good tips on Home Purchases
-
Keep Your Home Purchase on Track
You’ve found your dream home. Make sure missteps don’t prevent a successful closing. Read
-
Understanding Real Estate Representation
Whether you’re buying or selling, it’s important to choose representation that meets your needs in the transaction. Read
-
4 Tips to Determine How Much Mortgage You Can Afford
By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget. Read
-
7 Tips for Improving Your Credit
Here’s how to clean up your credit so you get the least-expensive home loan possible. Read
-
7 Steps to Take Before You Buy a Home
By doing your homework before you buy, you’ll feel more content about your new home. Read
Visit houselogic.com for more articles like this.
Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®
Monday, June 7, 2010
841 4th Ave N #25, St Petersburg, FL | Powered by Postlets
Great 1 Bed 1 Bath 55+ Co-op located in Downtown St. Pete near everything for $38,000
841 4th Ave N #25, St Petersburg, FL | Powered by Postlets
841 4th Ave N #25, St Petersburg, FL | Powered by Postlets
Wednesday, May 26, 2010
Tuesday, May 25, 2010
Learning an important lesson on Short Sales!
After a 4 month wait for a short sale to be approved by Bank of America, my buyer got the okay on his offer. The listing agent had not made me aware that the buyer had moved out until after we set the appointment for the inspection. So when we arrived at the inspection, there was no power and no water. When we called the city and power company we were told there were outstanding balances that needed paying before we could turn it back on.
Now, who is going to pay for this? Fortunately, my buyer felt it was such a good deal, he was willing to pay it, but not until I tried to get the seller to somehow pay for it. Eventually after a week, it has all been straightened out and we are ready to go back and do the inspection. But now I learned a valuable lesson.
As a buyer's agent, to make sure to check with the listing agent about the status of the seller's living arrangement and whether the bills have been paid ahead of time and to make the buyer aware ahead of time so they are prepared for what may come up.
As a listing agent, to have the seller remain living in the home and paying their bills, if at all possible. If not, to make the buyer's agent aware of the situation.
Communication is always a key element of Real Estate!
Now, who is going to pay for this? Fortunately, my buyer felt it was such a good deal, he was willing to pay it, but not until I tried to get the seller to somehow pay for it. Eventually after a week, it has all been straightened out and we are ready to go back and do the inspection. But now I learned a valuable lesson.
As a buyer's agent, to make sure to check with the listing agent about the status of the seller's living arrangement and whether the bills have been paid ahead of time and to make the buyer aware ahead of time so they are prepared for what may come up.
As a listing agent, to have the seller remain living in the home and paying their bills, if at all possible. If not, to make the buyer's agent aware of the situation.
Communication is always a key element of Real Estate!
Monday, May 3, 2010
Sunday, February 28, 2010
I received my SFR Certification!
I am now an NAR Certified Short Sales and Foreclosure Resource. If you know anyone who is in trouble and wants to sell their house or knows someone wanting to purchase a home that is a short sale, send them my way.
Hopefully the length of short sales will drop so buyers will be more attracted to these types of sales.
Buyers need to be aware now that the timeline can be 3-6 months or even longer to close on these types of properties.
Bank Owned and REOs sell fast especially if you have cash.
There are some great deals available to buyers now. The tax credit, the low interest rates and the low prices are a great reason to buy now!
Have a great day!
Pete
Hopefully the length of short sales will drop so buyers will be more attracted to these types of sales.
Buyers need to be aware now that the timeline can be 3-6 months or even longer to close on these types of properties.
Bank Owned and REOs sell fast especially if you have cash.
There are some great deals available to buyers now. The tax credit, the low interest rates and the low prices are a great reason to buy now!
Have a great day!
Pete
Monday, February 1, 2010
Now is the Time to Buy!
With the First time homebuyers credit, low interest rates, and great prices on nice houses, now is the time to buy!
I just read an article on Interest rates. Check this out. I keep seeing that the Interest Rates are going to rise. I have to tools to show you how much you can save by getting in on these low interest rates now. This will more than offset any drop in prices of properties. So you should not be waiting to buy.
Here is the link to the article. http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=231532
Let me know if I can be of any assistance. You dont have to be looking in Florida for me to give you help.
Have a great day!
Pete
www.yourhomeinstpete.com
pete@yourhomeinstpete.com
I just read an article on Interest rates. Check this out. I keep seeing that the Interest Rates are going to rise. I have to tools to show you how much you can save by getting in on these low interest rates now. This will more than offset any drop in prices of properties. So you should not be waiting to buy.
Here is the link to the article. http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=231532
Let me know if I can be of any assistance. You dont have to be looking in Florida for me to give you help.
Have a great day!
Pete
www.yourhomeinstpete.com
pete@yourhomeinstpete.com
Monday, January 18, 2010
Broker's Open Houses
Every Thursday around noon, the local agents hold open houses for other agents to come and view the properties they have listed to sell.
I always enjoy going to these as it gives me a good idea of what's available and what price they are listed for. It's a great idea to do if you are an agent. It is so important for the buyers to know that you have a good grasp on the inventory when they come knocking on your door to buy. It can also save them time when they ask about a property and you have first hand knowledge of the house. It impresses them.
I saw some very nice homes in the Kenwood section of St. Petersburg this past Thursday. One of them was the largest house (in terms of square footage) and was remodeled beautifully. One of the owners is an artist and had a lot of her own work around the house. There was some fantastic pieces and as you can imagine, the decor and colors inside the house were beautiful.
This is also a great way to get out and meet other agents in the area. Even though we are all looking to sell houses, most agents are always looking to help each other out.
I always look forward to see who is having the open houses and the location. It has really helped me get a good feel for the Real Estate business in St. Petersburg.
And of course, there is always the free food!
Until next blog!
Have a good one!
Pete
P.S. Remember to check out my website.
www.yourhomeinstpete.com
I always enjoy going to these as it gives me a good idea of what's available and what price they are listed for. It's a great idea to do if you are an agent. It is so important for the buyers to know that you have a good grasp on the inventory when they come knocking on your door to buy. It can also save them time when they ask about a property and you have first hand knowledge of the house. It impresses them.
I saw some very nice homes in the Kenwood section of St. Petersburg this past Thursday. One of them was the largest house (in terms of square footage) and was remodeled beautifully. One of the owners is an artist and had a lot of her own work around the house. There was some fantastic pieces and as you can imagine, the decor and colors inside the house were beautiful.
This is also a great way to get out and meet other agents in the area. Even though we are all looking to sell houses, most agents are always looking to help each other out.
I always look forward to see who is having the open houses and the location. It has really helped me get a good feel for the Real Estate business in St. Petersburg.
And of course, there is always the free food!
Until next blog!
Have a good one!
Pete
P.S. Remember to check out my website.
www.yourhomeinstpete.com
Thursday, January 7, 2010
New Year. New Beginning.
Happy New Year to everyone!
I have a good feeling about 2010. I think it is going to be a good year.
There are so many possibilities for the new year.
I am looking forward to a busy year in the Real Estate business.
Short Sales seem to be at the top of the list.
I attended a class today and got some new ideas and some great
advice on handling Short Sales.
Funny thing is that I came home today and my email was filled with
information about Short Sales.
Due to the economic conditions, it appears that the number of short sales
properties will continue to rise.
The one misconception that I find is that people feel that they can get a steal
on a short sale. This is not the case according to the lenders. They want
to minimize their losses so they won't be allowing buyers to buy homes for much
less than the market price. So keep that in mind when you are looking at houses
that are short sales.
I have a good feeling about 2010. I think it is going to be a good year.
There are so many possibilities for the new year.
I am looking forward to a busy year in the Real Estate business.
Short Sales seem to be at the top of the list.
I attended a class today and got some new ideas and some great
advice on handling Short Sales.
Funny thing is that I came home today and my email was filled with
information about Short Sales.
Due to the economic conditions, it appears that the number of short sales
properties will continue to rise.
The one misconception that I find is that people feel that they can get a steal
on a short sale. This is not the case according to the lenders. They want
to minimize their losses so they won't be allowing buyers to buy homes for much
less than the market price. So keep that in mind when you are looking at houses
that are short sales.
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