HEAD OF THE CLASS FINANCES
Basics to Healthy Financial Choices in
This is a time when those who can buy real estate should buy real estate. Yet the news of plummeting real estate values, of owners who have been over-leveraged and face loosing their house in this financial downturn are frightening. How to take advantage of still buying and selling without Financial Stress? There are many basics to financial lending that if followed will help de-stress your buying and selling of real estate.
Decide a head of time just what amount you can afford as a monthly payment.
Look realistically at your budget and living expenses. If you don’t have a budget and no idea what your living expenses are, it is time to consider them.
Before making the large investments, take the time to make sure of your small investments. If you don’t have a basic financial plan-take some time to read some basic money books. There are some great financial websites and planning books out there. As you read them determine which planners are advising high risk rather then low risk planning.
Decide just who you are when it comes to your money. Are you a high risk player? In the realm of finances high yields also have high risks attached to them. This is so in Real Estate as well.
If you decide on the money first, it will put you in the position of owning your home rather then your home owning you. Falling in love with a home that is out of your budget range is painful. Many will decide to take that step and acquire it, only to discover that their dream home is then blocking their dream of financial security.
Choose an experienced Real Estate Agent first and they can help you find an experienced mortgage lender.
Choose a Realtor that understands financing and is as determined to make sure that the financing of your house is as much in line with your money needs as are the houses they show you in line with your life style needs. If you choose a Realtor like this, they can help direct you towards the Lenders who will have the same care and considerations. These are the lenders who are reputable, experienced and willing to advise you honestly about your options and the cost of those options. An experienced Realtor will have worked with these lenders before this. There will be established levels of communication and trust already in place.
Keep in mind; both Realtor and Lender seek to give you the service for which you are asking. If you know the amount you are able to spend on a house, they can then seek out the kind of financing that will meet your goal. They can only advise according to what you tell them of your wants and needs.
If you do this homework first, you allow your Realtor and Lender to do their homework first as well. Your team of Realtor and Lender will be prepared as you make your next move in the buying process. When you go to view houses, you will have already taken the steps required that will give you the best in financing. Your Lender can marshal the better mortgages if given facts and time. Your Realtor can also put in their search of homes the financial terms that you have decided you want.
A Lender can view your credit scores ahead of time. Many times with simply closing out certain credit cards, and acquiring the right documentation, you can increase you credit score. Increased credit score generally gives you better interest rates. Attempting to do these things after you have made an offer for a home will restrict your options.
Certainly the better qualified you are the better the interest rate. However, a balance in terms may very well offset the higher interest rate—if it is still within your original monthly payment plan. Buying in this depressed market may still allow you to buy far more then you could in a strong market.
Being pre-qualified is good. Being pre-approved is better.
What is pre-qualified? Pre-qualified is where you have called a lender and after giving them basic facts, they have made an ‘estimate’ of what you can afford for a house. They will give you a mortgage range.
What is pre-approved? Pre-approved is where you have applied for a mortgage, filled out your application, and your lender is aware of your credit record, your employment is verified, etc. You know exactly what the loan amount will be.
If you are pre-approved it gives you more creditability with the seller. Cash always speaks the loudest. The next best thing is a pre-approved buyer. Remember, sellers who are being forced to sell will be more willing to meet the terms of a secure buyer rather then a insecure buyer. Many times they need a quick sale-if you are pre-approved you might offer that as a term for them in order that they give you your terms.
If you are considering working with Bank Sold properties or Short Sales, you will be in competition with other bidders and you will wish to show them that they can trust contracting with you over any other.