With all the talk about record low mortgage rates and housing prices that are at the most affordable level ever for home buyers...more people are out looking to buy a home today. Unforutnately, with so many choices and more people everyday startign online to do a home search buyers are getting lured into traps on homes. I tell everyone who is thinking of looking at a home to avoid these common traps:
First, when you begin your seach online avoid the monthly payments that they are advertising. They are simply wrong. Those payments are based on the asking price plus interest at a low level.They do not factor in other things into your payment such as mortgage insurance (if you are not putting 20%) down, home owners insurance and property taxes for the house. In reality all of that adds money to your monthly paymnet.
For example a typical house for $150,000 in Charlotte would probably cost you around $45 a month for home owners insurance. Property taxes on average would add $135.00 a month and mortgage insurance would add another $50.00 to your payment. So that base payment now jumps up $230.00 a month. That is a substantial increase in yoru monthly payment.
Second, when talking with a mortgage broker tell the mortgage broker what you are comfortable as a monthly payment with your taxes, insurance and any premiums added in. Make sure the mortgage broker tell you what price range to look at that keeps you in that budget.
Third, interview Real Estate agents. Not all agents are the same. Yes we all have access to the same information but we all perform differetnly. By contacting different agents you can get a feel if they are knowledgeable with the area you are looking in and are looking for homes that fit your criteria. Just becuase you know the maximum you can afford is $150,000 you do not want only homes that are in that spectrum of price. You want everything under that price as well. Some agents (unfortunately) feel you are not worth the time if your price range is not at a certain dollar amount.
Fourth, make a checklist of things you want to make notes of when looking at a house. By going into a house with a checklist and noting things about the house you like and do not like you will be better off when you make a descsion on the house you want. The listing sheet and the information an agent gives you only can provide you with so much information. it could be something about the house or the neighborhood that attracted you to it. Without the notes you are probably going to forget.
Fifth, do not rush into a purchase. Even if you like a house and are ready to put an offer in sleep on it. Call your mortgage broker and give him the address of the house. He will be able to pull up the taxes on the house and give you a monthly payment within a few dollars (subject to your homeowners insurance). make sure based on the condition of the house and what you may want to do to the house that it will fit within your budget.
Following these steps can help ease the anxiety that comes with buying a house. I know when I purchased my homes prior to being in Real Estate i wish I had known these things. Everytime I would start my search online to see what was out there and look at the monthly payments I would say i can afford that....until I found out i could not or did not want to. Then the emotional part of me is taking over and I am justifying to myself why I should buy that house.....By following these steps I have put myself in a psoition to know what i can afford and making a descison that is best for me and my family....
Dave diCecco
Realtor/Broker
www.davedicecco.com
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