Is it time for you to buy a house?

Good morning, World! How are you today?

If you're in Michigan, you're probably cold. Nothing new for spring.

So, I've been thinking for days about what the right kind of "first blog" should be. 

About me seems too egotistical.

And just sharing what other people have written just seems too.... impersonal.

So let's try personal, without egotism.

Are you ready to buy a house?

It's a question we've all asked ourselves at one time or another. I'll be honest; before I got into real estate, I thought buying a house was like cutting your limbs off.... painful, and almost impossible without knock-out-surgery. Just wanna wake up and have it done and overwith. 

But... the idea of buying a house is actually more intimidating than the process. Sure the process is tedious, and stressful. Not gonna lie. Buying a house is stressful. Mostly, because paperwork. But here's what my overwhelming thought was. "I can't afford to buy a house". Because nobody really explained to me; you don't need eleventy billion dollars in cash to buy a nice house. 

All you need is 

A Good Real Estate Agent (not to toot my own horn, but if you're in South East Michigan Counties, ....... *ahem*, beep beep)

An an annual household income that's consistent, steady, that you can get a mortgage with. 

OMG A MORTGAGE! 

Even that was an overwhelming thought. But when you compare Renting a house to Buying a house with a mortgage.... You're *almost* doing the same thing.

When you rent, you pay a landlord. Different leases have different agreements. Depending on the lease agreement, the landlord will take care of routine maintenance; or you can AND rent will go up each year. Or, you take a risk and get a landlord who won't uphold their end of the lease agreement. Next thing you know you're calling him about a broken window for 2 months and you end up having to fix it yourself.

When you buy a house, based on a mortgage... you don't pay a landlord... you basically pay the bank. Or your lender. Or the title company. Or your mom who helped to buy the house for you. 

Yes, there are other details that you need to make sure you take care of. Buying a house isn't just a walk in the park, a pick of unlimited choices, and a skip down a meadow of beautiful flowers. 

Once you decide you might want to buy a house, is when you've already made the choice you want to, you just don't know what steps to take.

Your first step is to get your pre qualification and pre approval for the mortgage. This is the paper that tells you what you're financially allowed to look for. Most lenders require a 20% down payment (think of that as a security deposit that you'll never get back, plus first and last months rent when you look for a lease); so you want to look for a house that's no more than 3 to 5x your annual household income.

Once you get your PreQual and PreApproval, you pick your Real Estate Agent. (again, BEEP BEEP, I'm over here!). 

Make sure you shop around for your Agent. Nothing says "this sucks" more than being shown houses by an agent who

* Doesn't get you

* Doesn't listen to you

* Doesn't treat you with respect.

I can't tell you how many friends of mine expressed "I wish you were my real estate agent" After I began my career. Apparently, there are a lot of Agents out there who don't take their clients seriously, or into consideration. 

Having a (great) Real Estate Agent works to your advantage because Agents have access to homes before readily accessible to the public. Agents can negotiate for your best interest; They can help accompany for home inspections, or appraisals. 

One of the biggest mistakes somebody can make when shopping for a house, is getting caught up in the house that somebody else owns. Walking into a house with the intent to buy, you can get overwhelmed by the wallpaper, the ugly bathroom, or the rug on the living room floor, that won't even be there if you buy it and move in.Its best to have somebody with a neutral stance to remind you to look at the floor plan, not the current owners decoration habits. You can always decorate how you like it. 

After you have your agent (or before, but we like after); now you start really looking and deciding on what house you want. Your agent will send you updates of houses that aren't found on Zillow, Trulia, or Realtor (if they're not on there yet). Your agent will set up the showing for you to go inside and see whether or not this might be your new home.

After you've made your decision (Hopefully it's not 17 showings later), and you've made your offer, now we get down to the nitty gritty, stressful parts. Stressful but worth it. 

You have to get a home inspection. Purchase offers are contingent on home inspections. This contingency is to protect the buyer. This is to investigate for structural defects, damages, or anything else that might take the cost down from the listing price, that you may or may not want to negotiate. If there's wood rot under the water heater, maybe you don't want to pay to fix that. You have options to negotiate price, ask the seller to fix it, or completely withdraw the offer if you decide you don't want to put forth the time and effort. Again, purchase offers are contingent on home inspections. 

Make sure to get an appraisal contingency in your purchase agreement. Once you get your home inspection, you get your loan, you get your appraisal. 

This is when you find out if there are OTHER problems that might be making you pay more than what the market recognizes it's worth. You will hardly ever get an appraisal for what the house was listed for. Your loan (remember that down payment on the mortgage loan for 20%?) will be based off of what the house is listed, or what the house is WORTH, whichever is LESS. If it's listed at 150k, but only worth 130K, your lender will only Lend 80% of the appraisal total. Because it's less.

The rest is just finalizing and getting the mortgage / loan, coordinating the paperwork, and the closing. Coordinating the paperwork is a doozy, and can take 45+ days. But once you had the check over, it's only a few days until you can move into your new home!!!! 

Did you hear that? YOUR NEW HOME!!!

If you have any questions about buying a house or getting a mortgage, please don't hesitate to contact me. 

When It Comes to Mortgage Rates, Don’t Settle for Average

*Originally posted on Realtor ® blog, by Jonathan Smoke

If you’re shopping for a home, you’ve probably noticed how dynamic mortgage rates are—changing daily, often following moves in the financial markets. A change of just one decimal point might not seem like a big deal, but it could end up costing you—or saving you—hundreds of dollars per year.
Mortgage rates are complex and vary by lender, location, and product. Think of them like gas prices. You see them posted at gas stations everywhere, and if you pay close attention you start to notice that the prices vary by location, brand, and product.
But unlike filling up at the pump, the actual rate you get also depends on your financial profile and the specific property and terms of purchase.

Now that spring home search and buying activity are heating up, mortgage rates are heading higher. But it’s not going to be a straight upward journey—rates are likely to move around quite a bit this year.
The financial markets are reacting to monetary easing (what central banks do to stimulate economic activity) in Europe and Asia, while the U.S. prepares for expected rate increases by the Federal Reserve. However, no one knows exactly what the Fed will do.
This uncertainty will probably not only drive rates up but also back them down occasionally. That means it will really pay for you to keep track of what rates are doing before you lock in an interest rate on your mortgage.
Changes in rates are often described in basis points—100 basis points equal 1 percentage point. So last week, the average rate for a 30-year fixed mortgage was 3.75%. This week, it’s 3.86%. That’s an increase of 0.11 percentage points, or 11 basis points.
Why does that matter? A 10-basis-point increase on a mortgage rate adds 1.2% to the monthly payment. The change in the past week would amount to an almost $300 difference in the course of a year for a traditional mortgage on a median-priced home.
Don’t assume you are getting the best rate, even if a rate you were quoted matches what was reported in the news—those are averages across the U.S. We often see differences of 20 basis points or more across various lenders, and some areas of the country have rates much lower than the U.S. average.
For example, this week borrowers in California saw rate offers that were close to 10 basis points lower than the U.S. average; however, in the District of Columbia, rate offers were 10 basis points higher than the U.S. average.
Rates can vary by state because of the perceived risks and returns that lenders expect from the mortgages in those markets. Better rates in California mean that lenders are bullish on the state and want to see more loans there, but the higher rate in D.C. reflects less of an appetite. The rate differences across states also reflect the relative difficulty lenders face when borrowers default.
Keep track of rates in your area by reviewing our current mortgage rates and loans.
Also, if you want to brush up on your understanding of mortgages, payments, interest rates, taxes, and more, explore our Mortgage 101 educational series, running now.
Putting in the effort to understand and track rates that fit your situation will help you end up with the lowest possible monthly payment, saving you hundreds of dollars per year

Read more on the Realtor blog


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