Archive for September 24, 2013

Minimum Down Payment Change Ahead


What is the minimum required down payment anyway? If you have your financing plan structured with your lender before November 16th 2013, on a conventional loan the minimum is 3% of the purchase price.  That means a $10,500 minimum down-payment for a $350,000 home.  If you don’t have your financing structured with a diligent professional lender before that date, your minimum down payment for a conventional loan will be 5% ($17,500 for that same purchase price).

How do I get my financing plan structured to avoid the minimum going up on me?  In order to ‘lock in’ the possibility of a 3% down-payment you will need to work closely with a lender who will secure something called “DU findings” from Fannie Mae on your behalf.  He/she will do this by gathering all of the pertinent information and documentation, pulling your credit report, and putting your exact scenario into Fannie Mae’s system.  If you have an acceptable scenario for a 3% down-payment before November 16th and make your way into Fannie Mae’s system, you will be able to continue shopping for houses past that date and be ‘locked in’ to the 3% down-payment structure.

Are there any other options for keeping my minimum down payment as low as possible?  The two alternative and most readily available options in keeping your down payment as low as possible will be securing FHA financing, or utilizing a down payment assistance program such as Home Advantage.  Both of which have advantages and disadvantages when compared to the standard conventional financing structure.  To learn more about these programs view: FHA vs. Conventional and Home Advantage DPA.

Don’t make one of the biggest financial decisions of your life without getting educated!  If you would like to gather more information about down payment options or the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.


How Do I Choose a Real Estate Agent?


How do I choose a real estate agent?  There are many things to consider when choosing a real estate agent to represent you in a home purchase.  Just a few of your criteria should be financial, structural, area and market knowledge.  Many people think they can represent themselves when buying a home, but this can be a risky strategy especially for first time home buyers.

Isn’t my lender the one that needs a financial background?  Yes, of course your lender should have a strong grasp on the different loan programs available to first time home buyers.  However, your lender isn’t in the car with you every time you view a property.  So it is imperative for your real estate agent to also understand the intricacies of the loan your utilizing.  If they don’t confirm this info before showing you property, it’s time to find a new agent.

But it’s the home inspector that assess the structural integrity of the property, right?  For sure.  No matter how much your agent knows about construction, every first time home buyer should always hire a third party inspector to assess the property.  However, if your agent at least has a basic understanding of construction, they should be able to steer you away from the really poorly constructed properties, so you don’t keep wasting money on hiring an inspector.

What’s area knowledge mean?  It’s often helpful to hire an agent that has a familiarity with the demographic that you are considering purchasing in.  The more they know about the area, the more they’ll be able to guide you in the right direction.  I.E. good school districts, etc.

So what about market knowledge?  The real estate market is forever changing.  Is this a buyers market, or sellers market?  Can I negotiate this price?  Will I have competition for this home?  These questions will be best answered by a FULL TIME real estate agent.  For an agent to have a strong understanding of the market, they have to do a consistent level of business.  We understand that everyone knows a real estate agent, but please make sure the one you hire will be able to represent you to the level that you deserve!

Don’t make the biggest financial decision of your life without getting educated!  This is just the tip of the ice berg.  If you’d like to find out more about hiring a real estate agent or the home buying process in general, please go to your Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.