You often here the saying, “what’s old will be new again” – and that is true in today’s real estate market. Yes there has been a shake up and things have changed but there are still buyers and sellers and people living in the homes of their dreams. And as is true most often when things are “shook up” or changing, that going back to fundamentals is the best track back to “normal”
Below are time-honored home buying essentials that apply now more than ever:
Save Up to Pay Down
The tradition of the down-payment is almost as old as real-estate itself, yet home loans with no money or very little money down became increasingly popular during the start of the decade. Changes in the credit market have made such arrangements all but nonexistent today, and in many cases buyers won't be considered for a loan without at least a 10% down payment waiting in the wings.
In reality, buyers who invest at least a 15% to 20% down payment will be rewarded as markets re-stabilize. A larger down payment provides the buyer with a lower interest rate, lower payments, higher equity and a stronger negotiating position when it comes to refinancing.
Borrow Smarter
Lenders will employ a variety of different metrics to determine how large of a loan and monthly payment you qualify for, but ultimately you must determine a realistic monthly budget. Qualifying for a home doesn't necessarily mean that you can truly afford the payments in the real world. Start the home buying process off right by determining exactly what kind of mortgage payment you can afford, leaving yourself enough buffer to deal with life's little surprises.
Focus on Your Market
It's easy to be distracted by national housing headlines, but real estate has always been centered on very specific local market conditions. What is true in one area is not the case in another, sometimes down to the street level. Rather than paying too much attention to trends in distant cities and markets, keep your eyes squarely on the dynamics close to home, and work with your local real estate expert.
Call me and let’s talk about these fundamentals and how my experience and knowledge can help you!
