First Time Home Buyer Fears part 2
Yesterday I started to address the results of a survey I posted on my Facebook Fan Page on what are some of your biggest fears when you bought your first home, or what are you concerned with most if you are thinking about buying a home right now. You can read the first post in this series here.
So to quickly recap. What were the top 3 first time home buyers fears in the Kansas City area?
- Buying in the right area.
- Can I afford it if something happens to me financially?
- Can I afford the maintenance?
Can I afford it if something happens to me financially?
This is a really great question, and is still at the front of everyone’s mind in light of the recent economic situation. People who have seemingly rock solid jobs with the city, government, fortune 500 companies are being let go daily. So what happens then?
The first thing is having a great conversation with your lender and making sure you buy what you can afford. A good lender will not just give you a blank check, they will sit down with you, go over your monthly expenses and discuss with you what you could and should take on. The lenders who are still in business are good, there is a reason they have survived the market shift. Listen to them, but more importantly ask them questions. Here are a couple good questions you may consider asking your lender:
- What will my total PITI (Principle, Interest, Taxes and Insurance) payment going to be?
- What is my current debt to income ratio?
- If I needed to sell quickly is this loan assumable?
- Are there any prepayment penalties if I pay off my loan sooner rather than later or have to sell quickly
I will be going much further into lending, terms and the different products available in a future post.
The next step is making sure you are not paying too much for your home. As a market expert, I see hundreds of homes a month and watch the market statistics religiously. A phrase I use often with my clients is this, “If you are not a little embarrassed by your offer, you are offering too much.” This always gets a smile and you can see body language relax a little. I will always let you know if a property is grossly overpriced or if it is a Smoking HOT deal. Actually, I’m required by LAW to let you know about SMOKING HOT DEALS 🙂 That is, if we have an agency agreement.
Worst case scenario, if you lose your job and main source of income, there are options to mitigate your losses. Not over extending yourself on your mortgage on the front end can help you possibly handle it on one income until you get back in the workforce. Buying it correctly and not paying too much gives you the best opportunity to sell your home quickly and possibly not lose any money.
Stay tuned for part three of this survey Can I afford the maintenance? You can subscribe to this blog by clicking on the RSS feed icon or like our fan page and be updated when a new post hits.
Download our FREE First Time Home buyers eBook that talk about the step by step process that myself and my team will help with.
As always, thanks for reading!
P.S. If you or a friend or coworker is thinking about buying a home or selling a home in the next 30-60 days let us know! We would be thrilled to help your friends and family.