12
Apr
By First Rate Financial Group
Home Buyer Tips

How Young Is ‘Too Young’ to Buy Your First Home? Getting Started Early Has Its Ups and Downs

How Young Is 'Too Young' to Buy Your First Home? Getting Started Early Has Its Ups and DownsMany millennials are expected to enter the housing market in the next year with the interest rates still low. However, while it may be a good time, it does not necessarily mean that it’s the right time for you to make the investment. If you’re currently weighing your options when it comes to home ownership, here are some things to consider before you decide put the money down.

Are You Struggling With Student Debt

It’s possible to invest in a home when you’re still paying down student debt, but if you’re also struggling with a low-paying job and a high debt load, it may not be the right time to buy. Instead of trying to make ends meet to pay a monthly mortgage payment, it might be a better decision to pay off some of your debt, lower your interest costs and consider investing later on. This will also enable you to afford more home when you decide the time is right to buy.

Do You Have A Down Payment?

It can be a good testament to your financial ability if you want to purchase a home at a young age, but having a down payment is one of the most important things to have on hand when it comes to investing. If you’ve come up with 20% of the purchase price, this will allow you to avoid mortgage loan insurance. If you don’t have this amount, however, or much of anything saved up, you may want to create a budget in order to save up for your down payment.

Are Your Ready To Commit?

Many people romanticize the idea of buying a home since it’s something that really belongs to them, but it’s important to be prepared for the monthly mortgage payments, home maintenance and all the other fees and responsibilities associated with home ownership. It’s great if you want to invest, but if you want to travel or explore different job opportunities or even continue your education, an investment commitment may not be the best choice.

It can be a great financial benefit for your future to invest in a home at a young age, but it’s important to ensure you’re ready for the commitment by having your debt paid down and having money saved.

17
Feb
By First Rate Financial Group
Home Buyer Tips

Buying Your First Home? Here’s Why You’ll Need to Ensure You Have a Proper Home Inspection

Buying Your First Home? Here's Why You'll Need to Ensure You Have a Proper Home InspectionThere’s a whole lot to learn when buying one’s first home, an investment that can bring joy, but sometimes, grief. A competent real estate agent can assist in locating those homes that meet the home buyer’s needs and can advise on factors such as market value of the home and neighborhood services. The agent will help the buyer through the negotiation and purchase process. But the buyer should take responsibility to make sure that the steps below are taken.

Home Inspection Contingency Included in Purchase Offer

At the point where the buyer finds a home and decides to make an offer, the contract should be written contingent on an acceptable inspection. If serious issues are found, the buyer has the options of requesting certain items to be fixed, to be compensated for the costs of repair, for a lower purchase price or to cancel the contract. Without this contingency, the buyer is bound to the contract without these options and may suffer huge costs.

Selecting the Home Inspector

Reputable and successful home inspectors may be recommended by the real estate agent or friends. The buyer should talk with prospective inspectors and ask for references. Another indication of competency is an affiliation with professional groups such as the American Society of Home Inspectors (ASHI) or the National Association of Home Inspectors (NAHI).

Inspecting the Home

There are potentially many problems in homes that are not visible to the eye. The home buyer that engages a professional home inspector can be assured that major problems will be identified. As an added value, by accompanying the home inspector and asking questions, the first-time buyer can learn about proper maintenance and of possible problems that will not go into the report.

What Will the Home Inspector Do?

The home inspector examines the entire home, both outside and inside, and checks for safety, defects, replacement or repair needs, and potential problems that should be monitored closely. The inspector will then produce a report covering the findings. The inspection generally takes two to three hours and costs between $200 and $500.

What Will Be Inspected?

External inspections will cover the roof, exterior walls, foundation, grading, garage, and may include sprinklers, lawn, porch lights, walkways and driveways as well. Interior inspections will examine the plumbing and electrical systems, HVAC (heating, ventilation and air conditioning), the water heater, kitchen appliances, laundry room, fire safety and bathrooms.

Taking this optional step of completing a home inspection, even with a new home, will be well worth the time and additional cost. It will provide a basis on which to make a more realistic offer and give the buyer the peace of mind of having in-depth knowledge about the house being purchased.

01
Feb
By First Rate Financial Group
Home Buyer Tips

Is It Worth It to Put More Than 20 Percent Down?

Down Payments 101: Is It Worth It to Put More Than 20 Percent Down?Are you thinking of buying a new home this spring or summer? If so, you’re not alone. Many thousands of individuals and families alike will become homeowners this year. Whether you’re a first-time buyer or a seasoned veteran of the housing market, you probably know there are significant choices to make. One of the big decisions you will have to ponder is how much you want to invest in your down payment.

With that in mind, let’s try to answer the question of whether or not it is worth it to put more than 20 percent of the home’s price in your down payment.

Ask Yourself: How Liquid Are You?

Before you can decide how much to put down, you first need to determine how liquid your finances are. That is, how much cash do you have access to? For example, if you are considering a $300,000 home, a 20 percent down payment is $60,000. If you have more than $60,000, fantastic. However, if you have less than that, you might have to do a bit of work to save up the remainder.

Even if you do have enough available cash now, you won’t have access to it once you take possession of the home. It is important to leave yourself with some cash in case of emergencies or for other uses.

Higher Down Payment, Lower Interest Rate

If you do choose to invest more than 20 percent in your down payment, it’s possible that you will gain access to a lower interest rate for your mortgage. Many lenders look favorably on homebuyers that are investing more of their own money and borrowing less. Be sure to check with your mortgage advisor to find out if you qualify for lower rates.

Lower Monthly Payments Await

Finally, choosing a down payment higher than 20 percent means that you will have lower monthly mortgage payments in the future. You are borrowing less so you will owe less. This can provide a nice boost to your monthly budget moving forward as you will have more free cash flow each month.

Try to keep in mind that there is no perfect answer to the question of how big your down payment should be. Choosing the best course of action means taking a good, long look at your current financial situation and deciding what your goals are. When you’re ready to discuss buying a new home contact us. Our professional mortgage team is happy to share our experience!