Things You Shouldn’t Do When Buying a Home

Things You Shouldn’t Do When Buying a Home

The last thing in the world you would ever want is to spend a bunch of time searching for a home, finding that perfect place and then not being approved for your mortgage. There are also many common mistakes homebuyers make that could make the process much more painful than it has to be.

We’re writing this article because we know how stressful it can be to buy a house. In order to make your process easier, we are going to cover the 9 things you shouldn’t do when buying a home.

1) Don’t overestimate your budget.

budgetEver heard the expression “House poor“? Many homebuyers overestimate what they can actually afford and end up with very little wiggle room financially. Before jumping into buying, make sure you have a realistic idea of the yearly costs involved with owning a home.

Remember, there is your mortgage, property taxes, utilities, insurance and repairs. All of this before you even think about making upgrades. Factor in all the costs and leave yourself some room.

 

2) Don’t let your emotions run wild.

decisionBuying a home is one of the biggest decisions of your life. It’s normal to be excited and fall in love with a home. However, try to keep a level head. Falling in love with a home can cloud your judgement or end in disappointment. This can happen if unforeseen issues are exposed in the inspection or if someone puts in an offer before you.

If you don’t find a home… don’t get discouraged. Home searching can be a lengthy process. It will be worth it when you find the winner.

 

3) Don’t talk to sellers about plans for the house.

buyingAs much as you are excited to get in and put your personal touch on the home, it’s best to keep this to yourself. Sometimes home buyers meet and get to know the home owners. This is fine, but remember that the current owner will have an emotional attachment to the property.

It’s best not to make them feel like you’re going to come in and completely change the place. If you make conversation with the owners, just keep the conversation light.

 

4) Don’t make any large purchases.

mortageWhen applying for a mortgage, every financial transaction plays a part. It is recommended that you do not make any large purchases like furniture or a car prior to applying. This is because banks want to see that you have a smooth financial history.

 

 

 

5) Don’t withdraw or deposit a lot of cash.

moneyGoing further with your financial history, cash withdraws and deposits also play a part in your mortgage approval rate. Large quantities of cash going in or out of your accounts signals a warning sign that you do not have stability. Avoid any sporadic withdraws or deposits of large sums of cash.

 

 

 

6) Don’t apply for more credit.

creditcardThe amount you are approved for on your mortgage comes down to your capital. How much money do you have at your disposal? Applying for extra credit increases your debt. This extra debt decreases the amount you will be approved for on a mortgage.

 

 

 

7) Don’t co-sign a loan.

loanWhile a loan may not technically be yours – it will still equally count towards your overall debt. Co-signing a loan can have an impact on not only the amount of your mortgage, but approval rate in general. Avoid co-signing any loans until you have purchased your home.

 

 

 

8) Don’t finance a car or furniture.

carloanAs financing is again a loan, it is therefore debt. Stay away from financing a car or furniture for the above mortgage approval reasons.

 

 

 

 

 

9) Don’t switch or leave your job.

jobFinancial stability is one of the most important factors considered when a bank is approving your mortgage. The key to financial stability is having a dependable income. If you switch or leave your job, often or before applying for a mortgage, this may signal red flags.

If you are thinking about a move, hang tight with your job until after your mortgage is approved.

 

 

In Conclusion

There are many important things to consider when purchasing a home. It is one of the biggest decisions of your life.

In order to ensure that you get the house you want, when you want it, you need to understand and follow those above tips. Doing so will increase your chances of finding that perfect home and getting it. Remember that financials are very important when it comes time to apply for a mortgage. Make that your priority.

Also keep in mind the emotional aspects of purchasing a home and try to stay cool. It can be a draining process, but it will be worth it when you get the keys to the castle!

Are you looking for a home in the (INSERT COMMUNITY) area? Give me a call. I’d love to help you find a home (and make sure you make none of the above mistakes in the process!)

Should I Rent or Buy a Home?

Should I Rent or Buy a Home?

Choosing whether to rent or own a home is not an easy decision. It requires you to carefully examine the factors and costs associated with each option. Which is better? That depends.

Your unique economic situation, lifestyle and goals play the largest part in deciding what is better for you. It’s important to go into your calculations with open eyes. As much as you want a home, you may not be able to afford it. Or it may not be the right decision for the way you like to live.

Factors To Consider When Buying/Renting a Home

buy-rent-1

 

The following four points are the largest factors to consider when weighing the pros and cons of home ownership vs. rental.

1) What are the total costs?

Many people look at the economics of home-ownership as a mortgage payment only. In reality there are insurance, repairs, property tax, homeowners association dues etc. that all have to be factored in to your monthly costs. Check out this calculator from the New York Times to see more.

Use a calculator and compare to see if:

  1. The monthly cost as a homeowner is less than renting.
  2. You can afford the monthly cost (if it works out more than renting in your area)
  3. Saving a 10-20% down-payment is feasible for you.

If owning a home definitely the way to go for you, you need to be able to answer the above questions definitively.

2) What is important to you?

Are you more interested in building for the future, or reducing your financial risk until you can figure out a plan? You may want to own if you are thinking about starting a family. But as someone who is single, you may enjoy your freedom and having less financial debt. (Even if it is building your net worth in the long run)

Undoubtedly, buying a house only makes sense if you plan to set up roots. If you plan to move within (or every) 5 years, your transaction costs will likely bring the equity you build in your house to zero. Thus diminishing your upside while carrying all of the liabilities that come along with home ownership. Owning a home is a smart decision if you plan to stay for 10 years or more.

3) What is your preferred lifestyle?

Do you want to build a career in a specific city or travel around? Do you have long-term goals in mind? It’s okay if you don’t. The most important part is being aware of where you are at. You may want to get some international work experience or try your luck in another part of the country. Or not.

Really think about what you want. You could lose some serious money if you buy a house and sell within a few years because you decide it isn’t for you.

4) What are the opportunity costs?

Think about the pros and cons of home-ownership. On one hand, you will always have a home base. On the other, you have a property that ties you down to a geographical location. Can you make more money in another city? With a home, you can’t move to pursue those opportunities.

If rent is equal to monthly payments as an owner, think about the opportunity costs of having all of your money tied up in the house. For example, some investors may rent and opt to invest their money in the stock-market or other investments in their portfolio. Can you make higher percentage returns yearly with the money you would be using for a down payment?

Rent vs Buying

buyorrent

 

The above were things you will want to consider. If you need to be realistic to make the right decision about renting vs owning a home. The below two situations may help if you aren’t able to come to a conclusion.

When is Renting a Home Better?

Despite popular belief, owning a home is not always the best decision. Let’s not be black and white. It depends on your particular situation.

You may want to rent if:

  1. You want to travel and set-up shop in different places every few years.
  2. You do not have the job or financial security to (realistically) guarantee payments for years to come.
  3. You have demonstrated the ability to make better financial returns through other investments.

There are other factors. However, this is a good starting point to help you determine your argument for renting versus owning a home. The benefit of renting is not being tied down to a geographic location and being able to leave when your lease runs up.

When is Owning a Home Better?

Owning a home is the long-term game. You need to have your goals in mind and understand if you can afford it.

You may want own if:

  1. You are okay with staying in one place for 10 years or more.
  2. You have the financial stability to afford the home (and float payments if you lose your job)
  3. You want to leverage your home as an investment property down the line (through rental)

Owning a home gives you an anchor. It helps you stay grounded by having a home base. At the same time, you can increase your upward potential by leveraging the home as an investment property.

[x_line]

In Conclusion

Choosing to rent or own your home is a big decision. It depends on your individual situation and vision for the future. In short, owning is traditionally the better long-term strategy. However, that’s not to say that you can’t do as good or better with the right investment portfolio.

Before jumping into anything, analyze yourself. Think hard about where you are and what you want for the future. Speak to a realtor and see if they have any advice for your individual situation.

If you are looking at purchasing property in the area, give me a call. I’d love to discuss your options and see if buying is the right path for you.

The Future Of Real Estate Commissions

The Future Of Real Estate Commissions

When it comes to real estate, it’s all about location. But when it comes to staging a home to sell the highest possible price, the importance of location applies to more than just the street.

The placement of your furniture and accessories can make or break a room and potentially even a sale.

Why it matter?

The look and feel of a space is created by the way the various items in that room are positioned. If you put them in the wrong place you can instantly diminish the overall appearance of the area, regardless of whether the items individually are stylish and on-trend.

Good placement, however, will have the opposite effect, to the point where even less attractive furniture located correctly around the room can produce amazing results.

How to Buy Your Not-Forever Home

How to Buy Your Not-Forever Home

not your forever homeAhhh, your forever home. You know, the one you dream about when you close your eyes at night. The one with the backyard big enough to BBQ and the perfect spot for a vegetable garden. It’s close enough to your family but not too close. A magical, mythical place where you can paint the walls whatever darn color you want and use nails instead of Fun Tak to hang your family photos.

You likely already know exactly what you’re looking for in a forever home. But if your home address still varies dependent upon the whims of the military, you’re not working on a forever home schedule right now. You’re interested in buying your not-forever home. And that’s a whole separate animal. Here’s what you should keep in mind:

Figure out your non negotiables. If you have children, maybe a great school district tops your list of priorities. Perhaps you’re worried about the commute time for your significant other or the proximity to post. Maybe Spot is your world and a yard with a fence is a requirement for you. What are the things that aren’t up for debate? Once you’ve determined what those things are, be prepared to be more fluid and flexible with the other items on your “would-be-nice” list. Compromise on your forever home? Of course not. On your not-forever home? Absolutely, especially if your goal is to have the best possible financial outcome both as a new homeowner and as a future landlord.

It’s not just about you. Okay, it is about you, but not entirely. Yes, this prospective not-forever home should be able to accommodate you comfortably now. Yes, in a kind world it should be a happy and welcoming place for you. Yes, it should put you in a good financial position where you’re not paying two mortgages concurrently.

But your not-forever home should be attractive to your future tenants as well. Your one-of-a-kind taste in wallpaper or funky bathroom tiling is, well, one of a kind. Keep in mind that you’re going to need other people to like what they see, too, or you’re going to struggle to keep the home rented out when you’ve already moved on to your next duty station. This reality means that you either need to consider purchasing a home that’s generally appealing rather than quirky. Or you need to be prepared to make it more attractive at your expense before renting it out—and toss those numbers into your financial math.

Do your homework. Research what the property values are where you’re looking to purchase a home. How long do houses typically stay on the market there? How close to asking price do sellers usually get? Are home rentals common in the area? If you’re looking off post, is the area one where military folks are known to rent or own? The information you gather will tell you whether the home is a good fit for you now. But it will also give you a sense of how easy it will be to rent or sell your home when you’re moving on to your next location.

Remember that a great realtor can make a world of difference. You want someone who will be a fierce advocate for you. Someone who knows the area; is clear on your budget, needs, and non-negotiables; and is prepared to walk through fire to get the deal done for you. Such a person is worth every penny, both financially and for the “emotional savings” you’ll earn by having a highly competent professional on your team.

Until it’s time for the forever home, here’s wishing you luck in finding a perfectly adequate not-forever home. May it provide you warmth and security and wonderful memories. And when it’s served that purpose, may it quickly be grabbed up by the perfect future tenants who will protect your financial health.

Things You Shouldn’t Do When Buying a Home

Things You Shouldn’t Do When Buying a Home

The last thing in the world you would ever want is to spend a bunch of time searching for a home, finding that perfect place and then not being approved for your mortgage. There are also many common mistakes homebuyers make that could make the process much more painful than it has to be.

We’re writing this article because we know how stressful it can be to buy a house. In order to make your process easier, we are going to cover the 9 things you shouldn’t do when buying a home.

1) Don’t overestimate your budget.

budgetEver heard the expression “House poor“? Many homebuyers overestimate what they can actually afford and end up with very little wiggle room financially. Before jumping into buying, make sure you have a realistic idea of the yearly costs involved with owning a home.

Remember, there is your mortgage, property taxes, utilities, insurance and repairs. All of this before you even think about making upgrades. Factor in all the costs and leave yourself some room.

[x_clear]

2) Don’t let your emotions run wild.

decisionBuying a home is one of the biggest decisions of your life. It’s normal to be excited and fall in love with a home. However, try to keep a level head. Falling in love with a home can cloud your judgement or end in disappointment. This can happen if unforeseen issues are exposed in the inspection or if someone puts in an offer before you.

If you don’t find a home…  don’t get discouraged. Home searching can be a lengthy process. It will be worth it when you find the winner.

[x_clear]

3) Don’t talk to sellers about plans for the house.

buyingAs much as you are excited to get in and put your personal touch on the home, it’s best to keep this to yourself. Sometimes home buyers meet and get to know the home owners. This is fine, but remember that the current owner will have an emotional attachment to the property.

It’s best not to make them feel like you’re going to come in and completely change the place. If you make conversation with the owners, just keep the conversation light.

[x_clear]

4) Don’t make any large purchases.

mortageWhen applying for a mortgage, every financial transaction plays a part. It is recommended that you do not make any large purchases like furniture or a car prior to applying. This is because banks want to see that you have a smooth financial history.

[x_clear]

5) Don’t withdraw or deposit a lot of cash.

moneyGoing further with your financial history, cash withdraws and deposits also play a part in your mortgage approval rate. Large quantities of cash going in or out of your accounts signals a warning sign that you do not have stability. Avoid any sporadic withdraws or deposits of large sums of cash.

[x_clear]

6) Don’t apply for more credit.

creditcardThe amount you are approved for on your mortgage comes down to your capital. How much money do you have at your disposal? Applying for extra credit increases your debt. This extra debt decreases the amount you will be approved for on a mortgage.

[x_clear]

7) Don’t co-sign a loan.

loanWhile a loan may not technically be yours – it will still equally count towards your overall debt. Co-signing a loan can have an impact on not only the amount of your mortgage, but approval rate in general. Avoid co-signing any loans until you have purchased your home.

[x_clear]

8) Don’t finance a car or furniture.

carloanAs financing is again a loan, it is therefore debt. Stay away from financing a car or furniture for the above mortgage approval reasons.

[x_clear]

9) Don’t switch or leave your job.

jobFinancial stability is one of the most important factors considered when a bank is approving your mortgage. The key to financial stability is having a dependable income. If you switch or leave your job, often or before applying for a mortgage, this may signal red flags.

If you are thinking about a move, hang tight with your job until after your mortgage is approved.

[x_line]

In Conclusion

There are many important things to consider when purchasing a home. It is one of the biggest decisions of your life.

In order to ensure that you get the house you want, when you want it, you need to understand and follow those above tips. Doing so will increase your chances of finding that perfect home and getting it. Remember that financials are very important when it comes time to apply for a mortgage. Make that your priority.

Also keep in mind the emotional aspects of purchasing a home and try to stay cool. It can be a draining process, but it will be worth it when you get the keys to the castle!

Are you looking for a home in the (INSERT COMMUNITY) area? Give me a call. I’d love to help you find a home (and make sure you make none of the above mistakes in the process!)

Should I Rent or Buy a Home?

Should I Rent or Buy a Home?

Choosing whether to rent or own a home is not an easy decision. It requires you to carefully examine the factors and costs associated with each option. Which is better? That depends.

Your unique economic situation, lifestyle and goals play the largest part in deciding what is better for you. It’s important to go into your calculations with open eyes. As much as you want a home, you may not be able to afford it. Or it may not be the right decision for the way you like to live.

Factors To Consider When Buying/Renting a Home

buy-rent-1

 

The following four points are the largest factors to consider when weighing the pros and cons of home ownership vs. rental.

1) What are the total costs?

Many people look at the economics of home-ownership as a mortgage payment only. In reality there are insurance, repairs, property tax, homeowners association dues etc. that all have to be factored in to your monthly costs. Check out this calculator from the New York Times to see more.

Use a calculator and compare to see if:

  1. The monthly cost as a homeowner is less than renting.
  2. You can afford the monthly cost (if it works out more than renting in your area)
  3. Saving a 10-20% down-payment is feasible for you.

If owning a home definitely the way to go for you, you need to be able to answer the above questions definitively.

2) What is important to you?

Are you more interested in building for the future, or reducing your financial risk until you can figure out a plan? You may want to own if you are thinking about starting a family. But as someone who is single, you may enjoy your freedom and having less financial debt. (Even if it is building your net worth in the long run)

Undoubtedly, buying a house only makes sense if you plan to set up roots. If you plan to move within (or every) 5 years, your transaction costs will likely bring the equity you build in your house to zero. Thus diminishing your upside while carrying all of the liabilities that come along with home ownership. Owning a home is a smart decision if you plan to stay for 10 years or more.

3) What is your preferred lifestyle?

Do you want to build a career in a specific city or travel around? Do you have long-term goals in mind? It’s okay if you don’t. The most important part is being aware of where you are at. You may want to get some international work experience or try your luck in another part of the country. Or not.

Really think about what you want. You could lose some serious money if you buy a house and sell within a few years because you decide it isn’t for you.

4) What are the opportunity costs?

Think about the pros and cons of home-ownership. On one hand, you will always have a home base. On the other, you have a property that ties you down to a geographical location. Can you make more money in another city? With a home, you can’t move to pursue those opportunities.

If rent is equal to monthly payments as an owner, think about the opportunity costs of having all of your money tied up in the house. For example, some investors may rent and opt to invest their money in the stock-market or other investments in their portfolio. Can you make higher percentage returns yearly with the money you would be using for a down payment?

Rent vs Buying

buyorrent

 

The above were things you will want to consider. If you need to be realistic to make the right decision about renting vs owning a home. The below two situations may help if you aren’t able to come to a conclusion.

When is Renting a Home Better?

Despite popular belief, owning a home is not always the best decision. Let’s not be black and white. It depends on your particular situation.

You may want to rent if:

  1. You want to travel and set-up shop in different places every few years.
  2. You do not have the job or financial security to (realistically) guarantee payments for years to come.
  3. You have demonstrated the ability to make better financial returns through other investments.

There are other factors. However, this is a good starting point to help you determine your argument for renting versus owning a home. The benefit of renting is not being tied down to a geographic location and being able to leave when your lease runs up.

When is Owning a Home Better?

Owning a home is the long-term game. You need to have your goals in mind and understand if you can afford it.

You may want own if:

  1. You are okay with staying in one place for 10 years or more.
  2. You have the financial stability to afford the home (and float payments if you lose your job)
  3. You want to leverage your home as an investment property down the line (through rental)

Owning a home gives you an anchor. It helps you stay grounded by having a home base. At the same time, you can increase your upward potential by leveraging the home as an investment property.

[x_line]

In Conclusion

Choosing to rent or own your home is a big decision. It depends on your individual situation and vision for the future. In short, owning is traditionally the better long-term strategy. However, that’s not to say that you can’t do as good or better with the right investment portfolio.

Before jumping into anything, analyze yourself. Think hard about where you are and what you want for the future. Speak to a realtor and see if they have any advice for your individual situation.

If you are looking at purchasing property in the area, give me a call. I’d love to discuss your options and see if buying is the right path for you.