Buying a Home

Buying a home, whether it’s your 1st or your 21st, can be exhilarating, satisfying, nerve-racking, and exciting all at the same time! When shopping for a home, the truth is that you can NEVER have too much information. But what are some of the things you want to be looking for and thinking about?

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Check out this list below:

Buy a home that allows you to accomplish your goals.

Understand how the proposed home purchase fits into and affects your existing financial situation, especially saving for retirement.

Get your personal finances in order before you buy.

Real estate is a good long-term investment.

However, home values go through up periods as well as down periods. If you’re a homeowner during most of your adult life, your home should enjoy a healthy appreciation of value.

What you don’t know is usually what gets you into trouble.

Real estate is a team sport. Put the right players on your team and reduce the likelihood of problems with your purchase.

“What’s it worth?” is the most important question to answer when buying a home.

Examine sales of comparable homes to answer this question.

There are no absolutes in real estate negotiation.

Smart buyers realize there are times to make a low-ball offer and times to make your first offer the highest offer you can afford.

Don’t try to save money by skipping inspections.

Have the home thoroughly inspected before you buy it. If in doubt, reinspect.

Once you make the decision to purchase a home, especially if you are a first-time homebuyer, your first question is probably “Do I qualify for a mortgage?” And the truth is that only an experienced loan officer can tell you if (a) you qualify and (b) what you qualify for.

The main items that are considering when qualifying for a mortgage include:

Credit score

Income and Employment

Savings

Existing debt

Keep in mind there is no minimum income to obtain a mortgage, but some loan programs have a max income limit.

How short-term and long-term interest rates affect mortgages

When choosing between an adjustable-rate mortgage and a fixed-rate mortgage, many people don’t realize that they’re making a choice between mortgages on which the interest rate is determined by either short-term or long-term interest rates.

Most of the time, borrowers pay a higher interest rate to borrow money for a longer period. Conversely, borrowers generally pay a lower rate of interest for shorter-term loans. Interest rates that are used to determine most adjustable-rate mortgages are short-term interest rates, whereas fixed-rate mortgage interest rates are dictated by long-term interest rates.

It stands to reason, therefore, that when little difference exists, the rates of fixed-rate mortgages shouldn’t be all that different from the rates of adjustable-rate mortgages. Thus, adjustables appear less attractive, and fixed-rate mortgages appear more alluring.

On the other hand, when short-term interest rates are significantly lower than long-term interest rates, adjustable-rate mortgages should be available at rates a good deal lower than the rates for fixed-rate loans. All things being equal, adjustables appear more attractive during such time periods and save you more money during the early years of your loan.

Get pre-qualified

One of the most important and helpful things you can do for yourself BEFORE you start home shopping, is to obtain a pre-qualification letter from Bison Ventures. A pre-qual letter shows a seller that you are a serious buyer and that you can in fact obtain financing. Additionally, by getting pre-qualified, you will be able to determine what your home budget should be so you don’t waste time looking at homes you may not be able to afford.

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