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Helpful Tips for First Time Home Buyers

by Galand Haas

Good Morning!

With mortgage interest rates remaining extremely low, many first time buyers are making the choice to purchase a home now instead of gambling on waiting.  If you are a first time home buyer or if you know of someone thinking about purchasing their first home, here are some tips that just might help with the home purchase process.

First-Time Home-Buyers: Know What You Can Afford


The hardest part of the home-buying process is figuring out what is affordable. Some first-time buyers rely on the amount the bank is willing to lend. Others use a lender’s mortgage calculator to crunch a couple of numbers. However, banks are often willing to lend much more than you can afford, and mortgage calculators don’t always tell the whole story. To learn how much home you can afford, start with the basics.

 

How Much Can You Pay Each Month?

Rather than focusing on the purchase price or lender offers, decide how much you can spend on a mortgage payment each month. A common rule of thumb is that your mortgage payment should be between 25 and 30 percent of your income. In truth, 30 percent is too high for many people. The only reliable way to determine what you can afford is by adding all of your monthly bills and expenses. Make sure to get estimates of what your new utilities will cost based on the size of the home you plan to purchase. For area specific rates, consult local service providers or your real estate agent.

Remember to include cost of living changes as well. Even over small distances, the price of gas, groceries and other necessities can change dramatically. Long-term savings is another overlooked cost. Do not make the mistake of assuming that future wage increases will allow you to save money later on. It is a good idea to plan for savings right from the start. Once you are comfortable with your estimates, you can start looking at the other costs that factor into mortgage payments.

Striking the Right Balance with Your Down Payment

The next step of the process is to determine how much you can put down on a home. Save as much as you can, but make sure to set aside some money for appraisals, inspections, closing costs and moving expenses. If you can save enough to put 20 percent down, you will be much more attractive to lenders. Additionally, loan products with a 20 percent down payment requirement are easier to obtain if your credit is less than perfect.

However, if you can’t save that much, don’t be discouraged. There are plenty of ways to buy a home with little to no down payment. However, your interest rates may be a little higher, and you will have to pay private mortgage insurance.

What is Private Mortgage Insurance?

Private mortgage insurance (PMI) is what lenders use to protect themselves from risky borrowers. If you put down less than 20 percent, you will probably have to pay PMI every month as part of your mortgage payment. As your down payment decreases, PMI rates go up. Speak to as many lenders as you can to learn what rates to expect. Make sure to ask how long you will need to pay PMI. Some loans, such as those backed by the Federal Housing Administration, will require you to pay PMI for the life of the loan. Other products will allow you to cancel PMI after you have paid enough towards the principal balance.

How Much Difference does Interest Make?

Interest rates can make or break a loan deal. A slightly higher rate can add a large amount to your monthly payment.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!



4220 Heins Court

Price: $235,000     Beds: 3     Baths: 2     Sq Ft: 1489

Brand New Home with RV Parking! Another beautiful home from builder Gary Konold. Located in cul-de-sac with shopping only a 2 minute drive away! One level home offers laminate wood flrs, granite counters, vaulted & high ceilings and Great Room layou...
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Current Mortgage Interest Rates Will Be Short Lived

by Galand Haas

Good Morning!



The sky might be ready to fall in regards to mortgage interest rates. But for now, it is time to act if you have been considering a home purchase.  The home affordability that you have today is going to be short lived.

Consider this a gift to home buyers: Mortgage interest rates dipped to 3.78% this week, just in time for the spring housing market.

For people who are in the process of buying a house, our best advice is to lock in your rate now. “This is the last call before the bar closes at these historically low levels,” said Jonathan Smoke, chief economist at realtor.com®.

Currently, rates are low, but they are expected to rise. On Wednesday the Federal Reserve issued its first warning that rates will increase in the near term, because the economy has stabilized. The Fed has been propping up the economy by keeping rates at zero since late 2008, when the housing market collapsed. Now that employment is up, gas prices are low, and consumers are feeling more confident about the future, interest rates are sure to rise. Observers expect the Fed action to happen as early as June.

“From here, rates should go up more than down, which means affordability declines rapidly,” Smoke said. “It also means that navigating mortgage choices becomes simultaneously more important , but also more complex as higher rates would cause qualifications to be harder and some options will fall off the table.”

It goes to reason that as interest rates increase, affordability decreases. Home prices are rising and now that rates are indicated to follow suit, your buying power will not be as great as it once was. These are the waning days of remarkably low rates.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

775 N 8TH ST

Price: $155,000     Beds: 3     Baths: 1     Sq Ft: 1040

Charming ranch style home on dead end street. Features large windows for lots of natural light, wainscoting, laminate wood floors, well sized closets, all on 0.18 acre lot. Living room opens to dining room with slider to back. Master bedroom with ja...
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Your Path to Homeownership

by Galand Haas

Good Morning!


With mortgage interest rates remaining historically low, the number of home buyers has accelerated over the past several years.  If you or your family fit into the group of those thinking about a home purchase, here are some great tips to help you with the purchase of your home.  This article was taken from Realty Times!



You're ready to make an offer on the home of your dreams. But before you do, make sure you're really ready. Ask yourself and your household members if this is the home for the next five or so years. Make sure everyone is on board with commitments to make it work, from putting off the dream vacation to putting in the elbow grease to clean, paint and do the yard work.

Have your real estate agent pull up the most recent sold comparables (CMA) within a reasonable radius of the home, so you can compare the home with other similar homes in terms of location, size, features, and amenities.

Next, consider the most current market conditions, so you can choose the right offer strategy.

In a buyer's market, discounts are common because there are fewer buyers, more properties for sale, and home prices are soft or falling so offers under list price are common.

In a seller's market, homes sell quickly for full price or higher because there are plenty of buyers and few homes for sale.

Whether you are in a buyer's market or a seller's market, your goal is to buy the home at a fair price. If you were the seller, what is the lowest possible price you'd accept?

To show the seller you're serious, include a copy of your lender's pre-approval letter, along with a cover letter summarizing your strengths as a buyer in terms of creditworthiness, flexibility in closing, and why you love this home. Include a copy of the comparables you used to show why your offer is a fair price for the property.

If the seller's home is offered at a reasonable price, don't waste time. Pay asking price or close to it. A home priced to sell will sell quickly and you'll lose it if you mess around.

Offering too little for a property is risky. If the seller feels insulted by your offer, you've lost the opportunity to negotiate. On the other hand, some sellers are simply unrealistic about their home's value. Maybe your offer will be their wake-up call. The seller will probably respond with a face-saving still-high offer, but at least they're negotiating with you.

If your offer is conditional, such as your need to sell another home before closing on the seller's, you'll have to find a way to sweeten the deal, such as a full-price offer. Few sellers will accept a discount and a contingency.

Your real estate professional will help you draft the offer with a price, estimated closing date and terms, including earnest money (a guarantee that you'll perform as a buyer in good faith,) final approval by your lender and your right to have an inspection. Your earnest money check will be forwarded to the escrow agent when your offer is accepted.

You'll have a brief period to get your home inspections completed. Your home inspector will go through the home with you and point out the condition and potential lifespan of all systems and appliances. You should only renegotiate when a problem wasn't obvious before, or when a system is found to be unsafe or not functioning.

Once you and the seller have agreed to terms, your offer is now a binding contract and you're on your way to owning a home!

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

33970 VAN DUYN RD

Price: $995,000     Beds: 4     Baths: 2    ½ Baths: 1     Sq Ft: 2930

Live where the eagles fly. Gorgeous valley and coast range views from a serene lofted location in the elite Country View Estates gated community. An elegant, top quality home offering spacious rooms, built-ins, and beautiful views, including spectac...
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The Importance of Having a New Home Inspected

by Galand Haas

Good Monday Afternoon!


Home inspections are an essential part in the process of purchasing a home. This even means they are important when purchasing a brand new home from a builder.  The following article from "Realty Times", talks about the importance of having a new home inspected.


Question: We are looking to buy a new home from a builder. We like the neighborhood and the price has been reduced to make it very attractive. Additionally, the builder is throwing in a number of extras, including paying all of our closing costs.


However, we do not know this builder's reputation, and would like to have the home inspected before we go to closing. Is this possible?

Answer: In today's buyer's market, most anything is possible, and I think it's a very good idea. However, builders often reject such arrangements, for a number of reasons. Some builders claim that this will void their insurance policy and are afraid that someone will get hurt during the inspections. Other builders don't want their employees bothered by too many questions from the inspector, while other builders just say that "we will provide you with a house that has been approved by the county inspectors, so you do not have to worry."


But you are correct in worrying. According to Frank Lesh, former president of the American Society of Home Inspectors (ASHI), "even new homes have defects that only a professional can detect".

Keep in mind that in many counties, the government inspectors are busy and do not have time to carefully look at all aspects of the new home. Often, by the time the county inspector makes a site visit, your builder may already have put up the drywall, thereby covering up the electrical and the plumbing.

I have been involved in a number of new home warranty issues, many of which could have been avoided had the buyer been given the right to inspect the new home as it was being built. In one case, the new homeowner kept hearing pipes knocking every time the upstairs bathroom sink was turned on. The homeowner forced the developer to open up the walls -- at the developer's expense -- and found that some of the plumbing pipes were not properly affixed to the wall. The building inspector that the homeowner retained -- after the house had been completed -- determined that this was what he called "water hammer".

Indeed, in this case, the builder acknowledged that had there been a periodic inspection, the problem would have been detected earlier, at a significant cost savings to the builder.

ASHI recommends a three-pronged inspection: prior to the pouring of the foundation, prior to insulation and drywall, and finally prior to the final walk-through.

You should tell the builder that you want the right to have an inspector of your choice -- and at your expense -- to conduct these three inspections. The sales contract you sign should spell out this right in clear terms.

There are many components involved in a new home -- such as the roof, the foundation, the electrical and plumbing and the heating and air conditioning systems. I recently heard of a situation where a homeowner complained that the new house was not being adequately cooled, and when a professional inspected the system, he discovered that the builder had made a mistake. The system that was designed for a smaller house was accidentally installed in the house that was inspected.

 

Once again, the developer had to spend a lot of money correcting the situation -- money which could have been saved had there been periodic inspections.

It often amazes me that when consumers buy a new car, they inspect it carefully, even to the point of kicking the tires. But when they buy a new house, they are more concerned about how many bedrooms there will be, and what size television will they be able to put in the family room.

To my knowledge, there are two major home inspection organizations: ASHI and the National Association of Home Inspectors.

If you do not have the name of a competent inspector, you can find one by going to either of these organization's website.

When you contact a home inspector, inquire of his/her qualifications and background and check him/her out on the Web and at the Better Business Bureau.

If you decide to hire an inspector, get a copy of the inspector's contract before you formally commit yourself. Read it carefully, and make sure that the inspector will be doing the job you want.

There is one controversial provision in most home inspector's contract, called "an exculpatory clause". This states that should the inspector make a mistake and negligently fail to pick up problem areas in the house, your only remedy is to get full refund of the contract price. This clause has been upheld in the State of Maryland. However, the District of Columbia Court of Appeals held that these exculpatory clauses will not be enforced "when a party to the contract attempts to avoid liability for intentional conduct of harm caused by "reckless, wanton or gross behavior." (Carlton v Home Tech, decided June 15, 2006). This was a modest fix but unless you can prove that the inspector was engaged in such behavior, the exculpatory clause will be enforced. State laws differ on this issue.

While not every home inspector will agree to delete this clause, it certainly is worth trying.

Purchasing a new home creates significant anxiety among many potential homebuyers. Why not get an inspector to be on your side to relieve you of at least one aspect -- namely is the house built properly or will we have problems after we go to settlement?

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

 


 

2060 MCLEAN BLVD
 

Price: $330,000     Beds: 3     Baths: 2      Sq Ft: 2180

Beautiful and peaceful residence! From high up on a hill enjoy serene tree views. Sunlight floods inside through numerous large windows and 2 sliders. Relax next to the fireplace in the family room, take in the view from the living room, or outside ...
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Mobile Home Search Made Easy

by Galand Haas

Good Monday Morning!


In a recent study, the National Association of Realtors determined that over 85% of all online home searches are now done from a mobile device.  This means that most interested home buyers are shopping online from their smart phones, tablets, etc.  The problem that most mobile home shoppers find is that the site they are searching with their mobile device is not optimized for a mobile application.  This means that the home search site is set up for viewing from a PC and does not fit the mobile platform.  The result of this is an awkward and cumbersome page that is hard to use.  Typically, these sites will have distorted sized properties and you will have to scroll all over the place just to get a look.  If you have been on one of these non-mobile friendly home search sites, I am sure that you can relate to what I am talking about.


If you are doing a home search in the Eugene and Springfield market area, there is a solution.  There now is a great new mobile enabled home seach site that will make your home search from any mobile device easy and without the typical frustrations.  This site is www.eughomes.info.  There is no app to download, just type the site into your mobil browser and you are ready to go.


Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

 


 

3097 SUMMIT SKY BLVD
 

Price: $750,000     Beds: 4     Baths: 3     Half Baths: 1      Sq Ft: 4338

Elegant upper end home on 1.06 acres in SW Hills! Maple hardwood flrs, granite, travertine, 3 suites, 2 fireplaces, 2 balconies, family rm, library/office, formal dining, bonus rm, media rm. Gourmet kitchen with cherry cabs, wine fridge, dbl ovens,...
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Photo of Galand Haas Team  Real Estate
Galand Haas Team
Keller Williams Realty Eugene and Springfield
2644 Suzanne Way
Eugene OR 97408
Direct: (541) 349-2620
Fax: 541-687-6411

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