Buyer Mistake #4: Waiting to save for a 20% down payment before speaking to a mortgage lender. Yes, this sage advice has been given for years. It can help you avoid paying private mortgage insurance (PMI or MIP for an FHA loan). But that 20% down payment is not the only factor to consider. Lenders are rolling out new loan products all the time and the guidelines change with them. There are lenders that can structure your loan so there is no PMI with a down payment of less than 20%. Also keep in mind that interest rates are still low but will not stay that way forever. Don't forget that as home prices increase, that 20% becomes a larger dollar amount for the same home. This may be the best time to qualify for a mortgage.
If you are a veteran, you may qualify for a VA loan with no down payment. There are also grants (not loans) for qualified borrowers who purchase a home in certain areas. Do not rely on Google to inform you of all the resources available for you as a home buyer. Your lender representative and your real estate agent are your best guides.
Similarly, there are buyers who are waiting for their credit score to improve. The question is, "Can you improve your credit faster than home prices are rising?" If you wait, your score may improve but the home you want may be more than you can afford. Find out from a mortgage professional how much you can afford now and learn exactly what you need to do to improve your credit as quickly as possible to qualify while rates are still low. And, yes, there is at least one major lender that has a product that does not take into account a borrower's credit score!
Meeting with a mortgage professional is a must before you start saving listings online and visiting open houses on the weekend. Know your buying power!
Author:D Gloria Hernandez Phone: 914-441-0980 Dated: March 30th 2018 Views: 254 About D Gloria: NYS Licensed Associate Broker
Branch Manager, Pelham & Briarcliff
I love looking at houses and...
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I got into real estate sales by accident in 2006. At the time, I recently earned a Bachelor's Degree in Economics from Lehman College in The Bronx. I had a very entrepreneurial mind and was ready to make my mark in the real estate world. I immediately purchased three multi-family houses in Binghamton, NY. They where fully occupied, however, the manner in which they were being run was not up to par. My brother helped me renovate several units, I let several tenants go and began renting primarily to Binghamton University students. After that, I hired a manager and was on my way.
Without question my favorite part of the business is working with first time buyers. In many cases it is much easier working with clients that have previously bought or sold, however, these transactions can lack enthusiasm. Buyers that have purchased before understand the lengthy process and usually know what's coming next. The first time buyer tends to be younger and has no idea of what to expect. They depend on my guidance and advice right through closing. They embrace challenges with a nervous yet positive outlook and every showing is an adventure. On the other hand, it's rather upsetting when a relationship builds with these clients for several months and comes to a sudden halt after a successful closing. I keep in touch of course with all of my clients but a hello every now and then is quite different than the four days a week contact over a several month period.