What to Expect When Buying a House: The rent is too high and the rates are too good...decisions, decisions

by seacoast_ashley 6. August 2015 15:32

 

blogad.png

After selling our home for a move across the state, my husband and I wondered if now was the right time to buy a home? We had to move quickly, due to a job start date as well as a super-quick sale of our home. Upon arriving in our new town we set up camp in a rental with our three children and started researching.

The very first thing that we did, upon the advice of various realtors and lenders, was to make sure that our finances were in good order. No matter our choice to buy or rent, we needed to be able to understand where our debts stood and how much we could afford. By ensuring that our credit scores were good and that all open accounts were in good standing we were able to move forward.

The decision to buy was made pretty quickly. Our family was going to stay in the same home for the duration of elementary school (at least) for three children, so we knew this will be a 5-10 year move. Mortgage interest rates were at historic lows. And possibly the biggest factor for us was that rent would be just as expensive as mortgage payments and in most cases even more because of the size of our family! Buying was a no-brainer for us.

https://youtu.be/lm2NtyM2i2Q

http://bit.ly/1OC1OaX

After making the first of what would end up being hundreds of decisions, the first person that we contacted was our long term mortgage broker. We had worked with him on all of our previous loans, and it felt comfortable going back to him for guidance. Our broker was able to speak with us about income, assets, debts, etc. He then gave us a general idea of what we could afford and a loan pre-approval letter in the event that we found something we wanted to put an offer on.

alpha.jpeg

With pre-approval in hand we began casually driving around neighborhoods looking for the perfect spot. We scoured the Internet for neighborhood reviews, school reviews, etc. We joined forums for our new town. We reached out to anyone from our past that now lived in our new city. I’m pretty sure that at some college somewhere I have earned a doctorate in all things “new city.”

openhousepaper.JPG

The research could have been a full-time job and without local knowledge of the area we were swimming in a sea of confusion! This is where a relocation specialist came in very handy! A relocation specialist was able to answer some of our questions and then refer us to a local realtor.

http://www.seacoastrealty.com/relocate/

Our realtor was able to assist us in narrowing our search. The market is hot in our new city, and we needed to focus to be able to play the real estate game! We chose three areas to focus on. I drove those areas in the morning, afternoon, and night to get a feel for the traffic, neighborhood activity, and the kinds of people that would become our neighbors.

All of the above steps were imperative in our quest for the perfect home. After completing the steps above we were confident walking into each showing that if we loved the house we could quickly make our offers. The future was coming and coming fast! Check back to see what happened when we found our dream home!

How did you make the decision to buy or rent? What were the big factors in choosing where to look? Who was imperative to you starting your search?

Join the conversation on our Facebook page

https://www.facebook.com/seacoastrealty

What are Seller Concessions?

by seacoast_ashley 2. February 2014 06:16

Seller ConcessionsWhen a buyer purchases a home with a mortgage, they are required to pay a certain amount of closing costs on top of the actual purchase price of the home. Some buyers discover during their home hunt that they have enough money saved for a down payment, but not for the closing costs. Rather than wait to save more money to purchase a home, they’ll request the seller to pay these closing costs. This monetary contribution is called a seller concession or seller contribution and is only applied to closing costs.

Why would a seller agree to pay concessions? It’s really an accounting game as no cash actually exchanges hands. The concession is added onto the purchase price of the home. If the home costs $200,000 and the closing costs are $8,000, the purchase price becomes $208,000. Then, the $8,000 concession is deducted from the seller net proceeds on the HUD-1 Settlement Statement and given back to the buyer. But the seller concessions must be agreed upon at the time the contract is signed, because adding them in later can be a hassle.

Why wouldn’t the seller agree to pay concessions? The appraisal may not compensate for the extra money. Without the concessions, the home would have to appraise at $200,000. With the concessions, it would have to appraise at $208,000. If it doesn’t appraise that high, the deal falls apart. The lender will not loan for more than the home is appraised at. That’s why it’s important to not ask for seller concessions unless you are sure it has a chance of appraising at the elevated contract price.

It’s also important to note that some loan programs have limits on the amount of concessions a seller can pay. Currently, FHA will allow the seller to contribute up to 6% of the price, VA will allow up to 4% of the price, and conventional will allow up to 3%. USDA has no cap. But this may change. Always verify with your mortgage consultant how much the seller can contribute before finalizing an offer.

If you have any questions about seller concessions, ask your Sea Coast agent. Don’t have an agent, find one today.

Meghan Riley

TextBox

Tag cloud