5 Tips for Homebuyers
It's no lie: The real-estate and financial markets are a mess right now. But that doesn't mean there aren't people looking to buy and sell homes. If you're one of them, here are tips to help you weather current conditions.
1. Amass a decent down payment, but not at the cost of your emergency fund
After the excesses of the past few years, brokers say, you will need a substantial down payment to get good financing. The no-money-down era of lending is gone, and most buyers should expect to put anywhere from 5% to 20% down, unless they qualify for an FHA loan, which requires 3% down (3.5% as of Oct. 1.)
2. Choose a loan originator wisely
Selecting a good mortgage broker or lender is one of the most critical and difficult tasks for buyers, since there are currently no national licensing standards in place. Rhonda Porter, a certified mortgage planner, recommends that buyers start out the old-fashioned way, by taking referrals from friends and colleagues. Buyers should ask how long a broker has been in business, do Internet searches to see if his or her name is mentioned in unflattering or criminal ways and check his or her record with state regulatory agencies.
3. Get pre-qualified as early as possible
There are a couple of reasons for this, brokers and agents say. First, buyers need to know how much house they can afford and what kind of money they will need for down payment and closing costs, says Miami real-estate agent Sandra Fernandez of Realty World International Gateway. "I tell my clients, 'Let's do this right from the beginning. Let's make sure you qualify, and make sure you know what amount you qualify for,'" she says.
4. Reduce your exposure to risk
Once you have selected a mortgage broker or lender, it's time to start checking out houses. In addition to analyzing trends in value, agents should be scanning foreclosure data (from notice of default to bank repossessions) to make sure they know where the deals are, and whether or not there are so many foreclosures in the neighborhood that they'll pose a threat to home values in the years ahead.
5. Get a rate lock-- with a key
The turmoil in the financial markets has had rates really fluctuating, making it difficult to know when to lock in a rate. Your best strategy is to work with a lender who offers a float down. This is a chance to renegotiate your rate if it drops substantially ---by a quarter-point or more, Porter says. So, before you settle on a lender, ask if it provides this kind of flexibility to borrowers. That said, Porter adds, you still need to lock in a rate within 30 days of closing.
1. Amass a decent down payment, but not at the cost of your emergency fund
After the excesses of the past few years, brokers say, you will need a substantial down payment to get good financing. The no-money-down era of lending is gone, and most buyers should expect to put anywhere from 5% to 20% down, unless they qualify for an FHA loan, which requires 3% down (3.5% as of Oct. 1.)
2. Choose a loan originator wisely
Selecting a good mortgage broker or lender is one of the most critical and difficult tasks for buyers, since there are currently no national licensing standards in place. Rhonda Porter, a certified mortgage planner, recommends that buyers start out the old-fashioned way, by taking referrals from friends and colleagues. Buyers should ask how long a broker has been in business, do Internet searches to see if his or her name is mentioned in unflattering or criminal ways and check his or her record with state regulatory agencies.
3. Get pre-qualified as early as possible
There are a couple of reasons for this, brokers and agents say. First, buyers need to know how much house they can afford and what kind of money they will need for down payment and closing costs, says Miami real-estate agent Sandra Fernandez of Realty World International Gateway. "I tell my clients, 'Let's do this right from the beginning. Let's make sure you qualify, and make sure you know what amount you qualify for,'" she says.
4. Reduce your exposure to risk
Once you have selected a mortgage broker or lender, it's time to start checking out houses. In addition to analyzing trends in value, agents should be scanning foreclosure data (from notice of default to bank repossessions) to make sure they know where the deals are, and whether or not there are so many foreclosures in the neighborhood that they'll pose a threat to home values in the years ahead.
5. Get a rate lock-- with a key
The turmoil in the financial markets has had rates really fluctuating, making it difficult to know when to lock in a rate. Your best strategy is to work with a lender who offers a float down. This is a chance to renegotiate your rate if it drops substantially ---by a quarter-point or more, Porter says. So, before you settle on a lender, ask if it provides this kind of flexibility to borrowers. That said, Porter adds, you still need to lock in a rate within 30 days of closing.
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If we, at RE/MAX Lake Oconee can help you with any of these issues, please let us know! We are happy to assist you, in any way!
*All information obtained from msn.com.
posted by Re/Max Lake Oconee at
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