By Patrick McCarran
Real Estate Broker
On the fence? Waiting for the next crash? You may be waiting for a while. Values have been holding steady after last year’s market correction and interest is back to a traditional level and highly unlike to drop anywhere near post-recession levels. With rents increasing the time to buy is now.
The home buying process can be overwhelming, but if you go into it prepared, your first purchase can be a good experience. Here are some things to consider before making the plunge.
Getting a mortgage—You miss 100% of the shots you don’t take. Fear of being rejected for a home loan is one of the main concerns for first-time homebuyers and the biggest hurdle to making the purchase. Don’t let fear of the unknown stop you from the first step in building your future. You have nothing to loose and everything to gain by calling a lender and starting the approval process.
Mortgage Payments—The costs involved in the purchase of a home may seemoverwhelming to first-time buyers. However, with the help of your lender and Realtor, you can calculate out how much they you be able to pay each month in mortgage payments. It is important to remember that rent can continue to increase (even in rent control cities) but with a fixed mortgage it is stable. Property taxes and insurance may increase monthly however these are largely predicable and significantly smaller that rent increase can be.
Down-Payment—The down-payment amount varies slightly depending on the loan you qualify for, Conventional can be as low as 3%, FHA 3.5%, and VA 0%. There are many programs and grants that will cover the down payment and sometime closing costs. You can also ask the seller for a closing cost credit. Again you only lose if you don’t play, CALL A LENDER.
Making offers—Don’t be afraid making an offer on the first home you see. This is a common mistake of many first-time homebuyers. If you know what you want and you find it, go for it. However it is perfectly fine to view different homes to get a feel for the marketplace. Make the decision that feels right for you. The market is moving quickly so speed is of the essence. The most important thing is not to get discouraged if you don’t get the first offer or even the 5th one accepted. One thing that experience has taught me is that when it is meant to be it will happen.
Condition of the Home—Buying an ugly home is often another fear of first-timers. While a home that needs major repairs can become a costly venture, a fixer upper can be a great value and often will not have the multiple offers. This is where hiring a home inspector will be beneficial. The home inspection will help explain whether it is largely cosmetic or a major repair and that way, you know what you are getting into. This can be done as a contingency of purchase so you can cancel without penalty if you find the condition overwhelming.
Yes, purchasing a home is a big undertaking, but it doesn’t have to be a hassle. If you’re even a little serious about finding your home, give me a call and we find a time to sit down together, openly discuss your options and set up an action plan for either for now or in the future. My process is client friendly, and my goal is to give you’re the information and let you make all the decisions.
Patrick McCarran is a local Realtor and Broker DRE# 01325072. He can be contacted by phone or text at (925) 899-5536, pmccarran@yahoo.com or www. CallPatrick.com. An independently owned and operated office. In association with Realty One Group Elite DRE# 0193160. Equal Housing Opportunity.
