Tuesday, April 27, 2021

Getting Prepared To Buy Your First Home

 For some it seems like a no-brainer. Renting a home feels like throwing money away, offering no sense of ownership whatsoever. Buying a home is investing in the future. Even if it takes up to 30 years to pay off the loan, you have been LIVING in your investment.

According to a new study by Framework, however, there is more than meets the eye with first time home buyers, who see it as laced with blind spots and pre-loaded with anxiety — mostly because they went into it fairly blind, without enough education and information. The surveys were completed by two groups: recent first-time homebuyers and prospective first-time homebuyers.

The report says only 41% feel very well prepared for the home buying process, 57% worry they can't afford homeownership, 47% think the home buying process is "rigged" against the buyer, 44% fear making costly mistakes, and 55% said they could use an independent advocate to coach them through the process of home buying and homeownership. On top of that, more than half of first time home buyers in both groups said buying a home was more difficult than it should be.

So what does this tell the average real estate professional or mortgage loan officer? That they may have fallen short of making their buyers literate enough to have confidence in the process? While, once they had been through the process of buying a home, 64% of responders said they emerged from it knowing a lot more about the financial aspects of it, most wished they had taken some kind of class to prepare them for it.

When you think about it, those in the industry often don't do a great job in explaining aspects of homeownership not in their purview — things like paying taxes, how and when a payment can adjust, or promoting the idea of having a home ownership "slush fund" in the case of an emergency, such as flooding, a failing roof, or plumbing leaking underground. Of course, these aren't included in the warm, fuzzy feelings industry professionals care to project as they lead buyers through the process, but that doesn't mean first-time homebuyers shouldn't be encouraged to find classes or sources that address their concerns.

CurrentMortgageRatesToday.org says that while the largest cost of owning a home will be
your monthly mortgage payment,
there are several other costs that you should be aware of when trying to find out how much homeownership will cost you — things like an HOA fee (and what it covers), property taxes, homeowner's insurance, and utilities. And then there is maintenance and repairs.

There are always risks inherent in any large purchase. But it's up to the potential homeowner to decide if it's the best financial step for them. Lenders and Realtors often offer courses for first-time homebuyers, but they can also be found online as well.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post. 

Roxy Redenbaugh, Broker
Sr Mortgage Consultant
Residential and Commercial
The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,
NMLS#269926 Company NMLS#1

Source: PRNewswire, currentmortgageratestoday.org, TBWS

Sunday, April 25, 2021

Obstacles That Can Hold Up Closing For Both Buyers and Sellers

Whoever said it’s the little things that count wasn’t kidding when it comes to closing escrow
on a house you just bought or sold.
If your escrow agent or real estate consultant were able to articulate all the hoops that must be jumped through from the day an offer is accepted to the day you hand over the house keys, they will have earned hero status.

The BIG things for the seller include signing off on the buyers’ inspections or fixing anything that comes out of them as a negotiation point of the sale, making sure the buyer gets a final loan approval and seeing their funds being deposited in escrow. But what about some of a sellers’ most overlooked things — those that have the capacity to wreak havoc at the least minute, keeping escrow from closing just when you thought the money would be in the bank?

Little things can be mini-bombs that go off at the last minute. You may not give utility bills a second thought. But utility companies, as well as closing personnel, will certainly notice that you forgot to pay your water bill. Any bills that stacked up against your property are your responsibility until you hand over the house keys. Failure to pay a $55 water bill can see everything come to a screeching halt.

A detailed walkthrough of your property is not only expected by the buyers, but encouraged
by their agent, their banker
— anyone who has an interest in seeing the transaction close. If they saw your home furnished and appearing in pristine condition when they made their offer, but now see gouged floors and banged up walls that weren’t there until after you moved out, it’s your responsibility to fix it, even if it’s due to natural causes, like flooding from a bad storm. Damage that occurred after a home inspection is always the responsibility of the seller, so fess up and make good on any damage that was your fault or even may have been your fault.

An issue that crops up more frequently than anyone would want to admit is property line and survey issues. If your neighbor was such a bud that his play set’s piers were cemented into the ground within your property line, it can hold everything up until the structure is moved if the buyer requests it. If you built a storage shed over a utility easement without knowing it, you’re still at fault and must remedy the situation. Fences don’t always follow property lines, either. Make sure you study the survey performed on your property and get these things addressed before the buyer heads over the sign papers.

So now we’ve warned sellers. What if you are the buyer? Something Realtors or Loan Officer's might not warn you about (but should) is committing the error of making major purchases AFTER your loan approval — one that has the capacity to lower your cash reserves and/or affect your credit score, making your loan approval become a fleeting moment instead of a reality. While it’s a royal pain for YOU, since you thought you had chosen the house of your dreams, think as well about the seller of the home you offered on in good faith. They may have already purchased another home and physically moved out. Your faux pax may have just caused a domino effect to take place, with escrows fallouts happening in rapid succession. Any other changes in your income, credit or access can change your approval, be careful during escrow to make sure you have no changes until AFTER you close escrow. 

The key here is to stay vigilant as to any potential hiccups that can occur by staying in close touch with your agent, your escrow officer, and any loan personnel that may be involved during closing week. They may have multiple transactions to deal with, while you have one — your own. And what can appear to be a small hiccup on the surface can bring things to a screeching halt if not dealt with promptly. While everyone tries to keep things together on your behalf, being proactive is never a bad idea.

Thank you for visiting my blog, please leave me a comment and let me if you like my blog and the information I post. 

Roxy Redenbaugh, Broker
Sr Mortgage Consultant
Residential and Commercial
The Greatest Compliment I Can Receive Is A Referral From Friends, Family, and Business Associates,
NMLS#269926 Company NMLS#1930219