Tag Archive for first time home buyer king county

09 Dec 2013
Real Estate

Is Winter a Good Time to House Hunt?

Is winter a good time to house hunt?  Many first time home buyers ask us when the best time to search for a home is.  The honest answer is, there can be pros and cons to shopping during any time of the season.  It really comes down to your personal situation.

Will I have less competition in the winter?  Many first time home buyers don’t want to house hunt during the holidays.  So if you’re willing to undertake your search during this time, you will most likely have less buyers to compete against.

Are there any down sides to shopping in the winter?  Absolutely!  Just as many first time home buyers don’t want to buy during the holidays, many sellers also don’t want to sell during the holidays.  So even though you may have less competition, you’ll probably also have less to chose from as well.

So when should I buy?  It really depends on your situation AND your specific housing market.  You should start looking for a home, when it makes sense for you.  Also, you should be consulting with a real estate professional about YOUR SPECIFIC MARKET!  It is possible to have less buyers and more sellers in the winter in one demographic, and the exact opposite ratios at the exact same time of year in another demographic.

Don’t make the biggest financial decision of your life without getting educated!  If you’d like to gather more information about when to buy in your area, or the home buying process in general please go to our Calendar/Reservations page and register for one of our FREE First Time Home Buyer workshops.

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27 Nov 2013
Real Estate

I Want an Ugly House for Christmas

I want to buy an ugly house.  We hear this from a lot of first time home buyers.  It’s generally an approach for people that want to be in a particular neighborhood, but are constrained by price.  So they look for an ugly house so they can get a better deal and do repairs after closing.  This can be a fantastic idea as long as you know what you’re getting into.

What do I need to know?  Even if you’re a contractor or just very handy, banks generally won’t lend money against a house that has structural issues.  Because of this, first time home buyers may want to narrow their search to only include properties that need cosmetic repairs as opposed to structural repairs.  If you’re considering a rehab loan, they have a lot of other caveats so we’ll save that discussion for another blog.

So I’ll just target cosmetic fixers then.  Hold on now, it also depends on what type of financing you’re using.  FHA can be a great option for first time home buyers.  However, they are often more stringent in regards to property condition than conventional loans.  So if you’re using an FHA loan, you could be excluded from buying cosmetic fixers with minor issues like pealing paint, or even a broken window pain.  This is why it’s imperative to align yourself with a real estate professional that understands the different types of financing guidelines.

If the bank won’t loan me the money, then I’ll just find another house.  It’s usually true that if the bank won’t give you a loan (depending on how the contract’s written), you can exit the contract and retrieve your earnest money.  However, there are some upfront costs involved like paying for a home inspection and ordering the appraisal, that have to be paid regardless of whether or not the loan closes.  This amount is generally some where between $1200-1500!  You don’t want to have to pay this money up front unless you’re pretty confident you can get the loan.

Don’t make the biggest financial decision of your life without getting educated!  If you’d like more information on buying a fixer, 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.

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12 Nov 2013
Mortgage

What are USDA Loans?

What is a USDA loan anyway?  USDA loans are specifically designed for purchasing homes in rural areas.  Some of the areas in Western Washington that are considered rural by USDA guidelines may surprise you.  In many cases first time home buyers looking for the suburban lifestyle are finding themselves purchasing homes in areas that can utilize USDA financing.

So what are some benefits of using a USDA loan?  Well, USDA’s monthly mortgage insurance is only one third of what FHA’s monthly mortgage insurance premium is.  Also, the interest rate for a 30 year fixed loan is lower with USDA than it is with standard conventional financing.  Another huge benefit for many first time home buyers is that with USDA, you can secure that low rate and the low monthly mortgage insurance with absolutely NO down-payment.  That’s right $0 down, so you can keep more money in your pocket!

What else do I need to know about the USDA loan?  First off, there IS an up-front Mortgage insurance premium that will be added to the loan amount of your 30 year fixed loan.  This up-front mortgage insurance is 15% higher than the FHA’s premium.  The next thing to know is that the monthly mortgage insurance, like FHA, will last for the life of the loan.  An additional major factor to consider is that there is a household income limitation.  Bottom line, there are a lot of different factors to consider.

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 first time 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.

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24 Sep 2013
Mortgage

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.

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10 Sep 2013
Real Estate

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.

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