You are here: Home / Archives for prequalification

Make Buying your Home a Priority in 2012

December 21, 2011 By

Now it makes more sense than ever to purchase your first home or invest in real estate vs. renting and making someone else rich!

buy cialis tadalafil online

: verdana,geneva;”>Here are 3 points where renters are losing money compared to homeowners:

1. You’re missing out on the appreciation that the property gives to the property owner. Appreciation is a term used in accounting relating to the increase in value of an asset, which means in real estate terms, added value to the property. With price so low, over the next 5-10 years, you will be locking in the appreciation of the building as long as the market cooperates.

2. Renters don’t get to freeze their monthly housing expenses like home buyers can. Of course, many home buyers get mortgage payments with adjustable interest rates and their payments go up over time. However, these payments will not go up over the long term like rising rent payments! A fixed rate mortgage in the 3′s or 4′s – are you kidding me? Those are unbelieve rates and now is the time to lock in an affordable mortgage payment.

3. Renters don’t benefit from tax advantages. Homeowners get income tax deductions. Tax deductions for interest costs, for instance, save tax payers thousands of dollar each and every year. Buy a home this year and write off the loan origination charges for 2011!

Emotional Satisfaction of Home Ownership

Besides losing out on making money with real estate, renters don’t get the same satisfaction of home enjoyment that benefits home buyers. Many landlords won’t allow you to paint your walls in colors that you desire. Also, you won’t feel like fixing up the property with custom window coverings and you get little say in flooring materials. Because you can’t make your personal statement, you won’t feel like you’re HOME as much as home owners who feel emotionally connected to their

property.

As I have practiced real estate, one of the biggest hurdles that would-be buyers cannot seem to overcome is saving enough money to come up with a down payment. With several loan options to choose from, (depending on your credit), FHA and HomePath provide affordable down payment options requiring as little as 3.5% down to purchase a home. People sometimes have this misconception that it requires thousands of dollars for a down payment, but it really does not. With careful planning and just watching what you spend, those considering a purchase can have the funds saved on in no time at all.

Remember, to add in about $2,000 extra for your loan origination and pre-paids. For example, right now in Mesa if you bought a $75,000 home through an FHA loan and put the minimum down payment required (3.5%), and got the seller to contribue $3,000 towards your closing costs, you would to come up with about $3,800-$4,400 to buy a house.

The average rent for a 1,500 sq ft home, 3 bed, 2 bath in the valley is around $1,150 per month. The same house if purchased,

would be $550-$700 per month.

If these amounts sound high (or low) to you, check your local area. Perhaps your monthly rent is only $1,000 and houses cost less than $200,000.

Talk to a qualified mortgage loan officer and see how much of a home you can afford.

If you’re renting, make one of your priorities to buy your own home in 2012.

Filed Under: Blog Tagged With: , , , , , , , ,

When should I get Pre-Qualified?

July 4, 2011 By

A common question I get is “When do I get pre-qualified in the home buying process?”

The answer may differ in certain situations but ultimately the advantages of ha

ving a prequalification in hand when looking for a house far outweigh any disadvantages:

Situation #1: “I will be buying in 6-8 months, should I get pre-qualified now?” A: The first question I always ask next is: “If you found the perfect home tomorrow, would you still have [or want] to wait?” Before you answer, understand that there is a difference between “having to wait” and “wanting to wait.”  I added “want” to the question prompt because sometimes buyers cannot come up with a valid reason for waiting unless there is something that is preventing them from qualifying (usually financial or credit related problems). If there is nothing preventing you from qualifying, then why pass up the perfect home or lose out on a bargain due to delays of getting pre-qualified after the home is found?

Buyers that have a pre-qualification in hand are more in control of the situation. They have the choice to move now or wait.  If they choose to wait, they may have to have their credit pulled a second time if the lapse in time from their initial credit check is too long.  You can always discuss everything with a loan officer without actually having them pull your credit until the house you want comes along.  This way you have an idea of want price range you should be looking in and allow you to finalize pre-qualification faster at the appropriate time. 

Situation #2: “I’ve been thinking about downsizing into something smaller than the home I currently own.” A: Take 15-20 minutes and make a phone call to your lender of choice.  You may be surprised at what you may qualify for with your current mortgage. This will help you make a more informed decision on your financial future.  Many buyers consider purchasing a second property and renting out one or the other.  This may add an additional income stream helping with one’s retirement.  Although profit margins are smaller for landlords/investors having a mortgage on a home, the current rental demand and rental rates in Arizona are creating situations where homeowners can step into an “instant cash flow” situation by deciding to buy an investment property.

Situation #3: “I want to submit an offer on a home, but I have not been prequalified.” A: You can currently submit an offer on a home in Arizona with no proof of funds or prequalification.  Is it advisable? Not exactly – for at least two reasons.  First: What if you cannot qualify for the amount you need to purchase the property?  Then you are wasting your time, your Realtor’s time, and the seller’s time. Second: if multiple offers are submitted on the same property and you have not included proof of pre-qualification; your offer may not be considered as strong as others.  If they accept your offer they are taking a chance that you may not qualify and the other potential buyers may be long gone by the time it is figured out, thus wasting their time which could be critical depending on their situation.  

Do get out there and start looking for property, but be sure that you are working on your prequalification

and you are comfortable with the payment you will have.  Be reasonable with yourself and always stay within your budget!

Filed Under: Blog Tagged With: , , , , , , , ,