Dealing With Financing

Dated: 05/23/2017

Views: 196

As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing with the dollar signs so that you can take down that “for sale” sign on your new home.

Get pre-approved. Sub-primes may be history, but you’ll probably still be shown homes you can’t actually afford. By getting pre-approved as a buyer, you can save yourself the grief of looking at houses you can't afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.

Choose your mortgage carefully. Used to be the emphasis when it came to mortgages was on paying them off as soon as possible. Today, the debt the average person will accumulate due to credit cards, student loans, etc. means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, you have a lower monthly payment, with the option of paying an additional principal when money is good. Additionally, when picking a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate. If you plan to stay in the house for a long time—and given the current real estate market, you should—taking the points will save you money.

Do your homework before bidding. Before you make an offer on a home, do some research on the sales trends of similar homes in the neighborhood with sites like Zillow. Consider especially sales of similar homes in the last three months. For instance, if homes have recently sold for 5 percent less than the asking price, your opening bid should probably be about 8 to 10 percent lower than what the seller is asking.

Blog author image

Regina McKinney

Regina McKinney is an "outside-the-box" thinker with her finger on the newest, innovative ways of marketing your home. Her deep understanding of the role technology plays in today’s real estate mar....

Latest Blog Posts

Dont Make This Mistake If You Are Selling Your Home FSBO

Wow!  Don't Make this fatal mistake if you are selling your home FSBO or For Sale By Owner!   In my recent book, The Ultimate In Your Face SoldByOwner  Guide to Sell Your Home, I

Read More

Mindset Of Buying A Home

So, getting back into the real estate game is a battle.  I had no idea I would have such trouble overcoming my limiting belief systems that I had to overcome years ago.  I know the

Read More

Come Back Kid

I've been working in and around real estate for 20 years now.  2 decades!  What?  Wow!  I started my career in banking where I handled a lot of home equity loans and worked with

Read More

Why Choosing The Right Title Company In ABQ Matters

Why does it matter who you chose to close the sale of your home?- A lot of people don't know this, but title companies play a vital role in the sale of a home.   A title company

Read More