Tag: First Time Home Buyers

Most buyers buy their home by taking out a mortgage. That can feel like a huge commitment and something that you may not feel like you are ready for. CNBC reported that an estimated 7.9 million renters were actually income “mortgage ready” to buy a home. What does that mean? It means that those people were qualified to buy and could have bought a home. This information is according to an analysis for the 2022 American Community Survey by the U.S. Census Bureau. Some of the people that were questioned may be perfectly happy to continue to rent. Others may not have been aware that they could qualify for a mortgage and would have bought if they knew that they could. If you are currently renting, but would love to buy, here are four things that may be keeping you from knowing that you are “mortgage ready.”

Fear of Rejection

The first thing that may be keeping you from applying for a mortgage is the fear of rejection. No one liked getting rejected, that is understandable. You may be underestimating your financial abilities and over estimating the strictness of the mortgage requirements. If you look past your fear and reach out to get pre-approved you can find out. Most lenders will also make a plan with you, if you are not ready. The plan can get you to a place that you are pre-approved.

Not Feeling Worthy

You may not feel like you are homeowner material. If you did not grow up in a family that owned a home, you may not feel that it is something that you can or should do. Renting is all that you have ever known. You may not see the benefits. The number one benefit is to build wealth.

Thinking the Process is too Difficult

Another reason you may not take the step to get pre-approved is because applying for a mortgage sounds like it is too complicated. The process probably sounds like it would require a lot of paperwork and time. The whole process from application, to closing can take 3 weeks to a month. But the pre-approval process may take you only a few minutes. In many situations a lender, that will be providing you with the loan, can tell you if you qualify, and how much money you can spend in a few short minutes. All you have to do is give them a call or fill out an online application, providing them with some basic information.

Assuming that Renting is Cheaper

A common misconception is that renting is always a more affordable option than buying a home. This may be another reason why you have not looked into applying for a mortgage. Depending on your area, and market conditions, buying a home can be more cost affective than renting. In addition. homeownership allows to grow your net worth by building equity. There are also potential tax advantages.

Don’t shut the door on homeownership before you explore if you can qualify and if the situation makes sense for you to buy. Call or email a trusted lender and real estate agent to explore your options.

Here are five things that home buyers often say that they may later regret. As an experienced real estate agent, I know that each and every buyer is different. However, it is amazing, how often home buyers will say the same things to me. Here’s a fun post of common, famous last words of buyers.

Five things you might say

1. “I know what I can afford.” I asked that the buyers that I work with get pre-approved before we start looking at homes. Some home buyers find this annoying and tell me that they know what they can afford. You may think that you know, but unless you are in the mortgage business, the odds of you knowing exactly where you stand and what you can afford is slim. Before you look at houses get pre-approved.
2. “I will never buy a _____ style house.” I know whenever I say never that it too often happens. It is best to leave the words always and never out of any conversation. Keep an open mind and your perfect home may be hiding behind a style of home that you would have never considered.
3. “I want to sleep on it.” Sometimes sleeping on it means that you miss out. There is a saying that I like to use: “if you sleep on it, you may not sleep in it.” Taking a night or a day to think about it seems reasonable, but depending on the market that you are shopping in, that hesitation could lead to heartbreak. Walking away for an hour to think about it probably will not cost you the house, and will give you a chance to clear your head and decide how you would like to proceed.
4. “I don’t want to get involved in a bidding war.” You have found the house that you love and you want to buy. When your agent calls, they find out that there are two offers on the home already. Are you going to walk away? More often that not you will have your agent write up your best offer to see if you can buy the home that you love. The fear that buyers have in this situation is that they will pay too much for the home.. Make sure that you have your agent guide you. Have your agent look at comparable properties that have recently sold, so you are making informed decisions.
5. “We can always increase our offer, but we can’t reduce it.” All buyers want to buy a home for the best price possible.In order to accomplish this some buyers want to write an offer that is unrealistically low. In doing this they risk insulting the seller. In this case you may not get a response. Sometimes even if the price is increase, the seller may not be willing to sell the home to you. Coming in too low may work against you.

As the buyer you are wanting to get the best deal. You also want to be able to find the house of your dreams. You want time to go through the process without the pressure of competing with other buyers. Make sure you connect with an agent to guide you through the process looking out for your best interest along the way. By doing this you can make wise decisions.

What kind of feelings might you have if you stopped renting and purchased a home now? I know you may be hearing that now is a bad time to buy. You may also be hearing that you should wait for interest rates to drop. May people feel like they just can’t buy a house because prices are too high, interest rates are high and the economy is not what it should be. Well, there may not be a better time to buy a home. All of the concerns that are listed above may apply to next year, and the year after that. It can always feel like buying a home is just too hard and out of reach.

It is not possible for everyone to buy a home. But in 2023, the last data available from Realtor.com shows that 32% of all buyers were first-time home buyers in 2023. In 2022 which was another tough year for home buying, 26% of all buyers were first time home buyers. It might be possible for you to buy a home. Here are some surprising feelings you may have ten years from now if you take the leap and buy a home now.

Glad

The first feeling that you may have is that you are GLAD, you got into the market when you did. The house you purchased is likely going to be worth a lot more money in ten years than it is today.

Wishful

Another feeling you may have is WISHFUL! It is hard to afford one house at any given hime, based on your salary and savings. But in the future, when you look back at the price that you paid for your home, you may be wishing you had purchased more than one home, when you did.

Relieved

RELIEVED is another feeling that you could feel in ten years. You will be feeling relieved because you will see how much more people are paying in rent, than you are paying in your mortgage. You have a pretty consistent monthly mortgage payment. It only adjusts annually if taxes or insurance go up. You are not having to worry about those rental increases.

Successful

Buying a home isn’t always easy, but you have done it. There may be struggles, particularly in the early years when the budget is tight. But you have gotten through it. You are building equity and you can take pride and feel SUCCESSFUL because you did it.

Nostalgia

Even if your first home is not your dream home, it more than likely will not be the house you live in for twenty years. You can pay down your mortgage and upgrade to a nicer home. Even if that first home was not the nicest home, you can look back at it with NOSTALGIA as you remember the memories that were made there.

Stop wondering if you can buy a home. Call Lestel and find out if you can! (970)310-8379

If you are a buyer, planning to buy a home, you have probably heard that there are changes coming coming in real estate. These changes are regarding how buyer’s agents get compensated. Some agents have been implementing the changes ahead of time, others are waiting until the deadline, 8/17/24. What will be required starting 8/17/24 is that all agents will need to sign a written agreement with a buyer prior to showing a home to a buyer. This agreement will include language that states how much compensation the agent will receive. Signing an agreement with an agent sounds like a new thing, but it really is not. There is no reason to be afraid of signing an agreement.

Let’s take a closer look at what must be included in the included in the agreement. There are four items included in the agreement between the agent and the buyer. The four requirements are:

The first requirement

The amount of compensation that the agent will be earning needs to be stated specifically and conspicuously. In the past the buyer may not have known what their agent was earning. Now the buyer has a say in how much their agent will earn and who will pay for that compensation.

The second requirement

The compensation cannot be open-ended and must be objective. For the most part, agents working for the seller have been paid whatever the seller decided to offer the buyer’s agent. It was usually a percentage of the sales price of the home. The seller still may pay the agent that sells their home, but the agreement between the buyer and their agent must state specifically what their agent will be paid. The agreement cannot say, “whatever the seller is willing to pay.” The buyer and the agent will agree what the agent will be compensated. They will also agree how the compensation will be earned. The agreement could be a percentage of the purchase price, a flat fee or an hourly rate, as an example.

The third requirement

The agreement between the buyer and their agent will include terms that limit your agent from being paid more than you’ve agreed upon. For example, the seller may be willing to pay the buyer’s agent compensation in the amount of “X” of the sales price, but if you have agreed upon less than that, the seller can only pay whatever amount you have agreed upon with your agent.

The final requirement of the agreement

The agreement must state that fees and compensation are negotiable. Many people incorrectly believe that there is and was a “standard” real estate compensation for agents. They have always been negotiable. Just because they are negotiable does not mean that your agent will be willing to work for whatever fee you offer them. Each agent will have fees they are willing to work for and may not work for less. You can shop around for agents who will charge the lowest rates. Make sure that you know what services you will be receiving. The level of service may be less than the agent that works for a higher compensation.

The changes were made to benefit the public and to make the process of working with a real estate agent more transparent.

Making a big step like buying a home, you want to avoid making mistake so your experience is as positive as possible. What are the costly mistakes that a home buyers should avoid? This is part two of this blog post.

Don’t forget to look at new construction

One mistake that buyers can make when purchasing a home is thinking that they cannot afford a new home. Did you know that approximately one in five homes on the market is new construction? New homes are often thought to be too pricey, but builders are responsive to market conditions and often offer incentives to buyers that can be very attractive. These incentives can include rate buy downs and closing costs credits, among others.

Use an experience realtor

Some buyers make the mistake of thinking that they do not need to use an experience realtor. They can do it on their own. Experience is important, particularly when you have someone that is guiding you to make such a major purchase. As a buyer, you should be looking for an agent with at least five years of experience, in the area that you are looking to purchase. You can interview agents to find one that you are most comfortable with. Remember that normally home sellers pay the buyer’s agents commission. This means that using an experienced, local real estate agent costs you nothing and includes their expertise.

Buy the house and the neighborhood

Another mistake buyers can make is falling in love with a house and not looking at or considering the neighborhood, where the home is located. When you look at a house, consider the neighborhood that the home is in. Also consider the schools, where the closest grocery store is and gas station. don’t forget to consider flight paths of airports, power lines, and train tracks. All of these things can affect the desirability and resale of the home.

Don’t wave inspections

Once you have your future home under contract, the next step, in the process, is inspection. Do not make the mistake of thinking, I can totally fix that, when you see the list of things that are wrong with the home. Do not let your excitement in buying your home, cloud your thinking. Ask your agent what is reasonable to have the seller fix, given the current market conditions. Follow your agents lead and understand the costs of what needs to be done.

When buying a home avoid making mistakes that can cost you money. Have a great agent guide you along the way and enjoy your home buying experience.

So you are wondering how to buy when interest rates are high? Don’t worry you have come to the right place. There are strategies that you can use that can make home ownership possible! Here are some tips to get you into a home that you can afford and enjoy. You may feel like you know exactly the neighborhood or town that you would like to live in. If you expand your search you may be able to find a home that you love somewhere that is more affordable and can work perfect for you.

How To Buy When Interest Rates Are High, Loan Types and Loan Options

• The favored loan, for most buyers is a fixed rate mortgage, but what would your payment look like if you were to get a variable rate mortgage? Have a frank discussion with your lender and ask for assistance exploring what is best for you.
• Remember that when you purchase a home you are not stuck with the loan and the interest rate on the loan. You can refinance when interest rates become more attractive in the future. Interest rates go up and they also come down.
• Look into grants and down payment assistance or gift funds. Not everyone has a rich uncle that they can call and get a chunk of change from. But do you know if you qualify for no interest down payment assistance? That does exist and you might be able to obtain it. Check with your lender and see if you might be able to qualify.

Home Ownership Equates to Building Wealth

Remember that buying a home to live in is a great way to build wealth. Owning your own place can protect you from ever rising rents. Having a place of your own you can paint the walls the colors you want and enjoy making the place yours. That is how to buy when interest rates are high. So, don’t be discouraged by what you hear in the news. Contact us today and get a recommendation for a lender. Explore whether now is the right time for you to buy!