SPECIAL SECTION:
WHAT FIRST-TIME
HOMEBUYERS
SHOULD KNOW
Last year was a great year for new homebuyers.
According to the National Association of Realtors, about
35 percent of the homebuying market was made up of
first-time buyers. Yet, each year is not created equally in
the mortgage industry and real estate market. Changes
happen frequently and it is often hard to keep up. If
you’re looking to break into real estate for the first time,
here are some insights into how to navigate the market.
Saving. Step number one for a first-time homebuyer
should always be saving. Take a look at your current
finances. It’s recommended that your mortgage
payment not exceed 30 percent of your gross monthly
income. See where you can cut back spending to put
away a little extra out of your paycheck every month
for your new home. Not only can this cash go toward
a down payment, but most likely you’ll need furniture,
appliances, and decorations to furnish your new home.
Don’t just calculate the amount of money needed for a
down payment. Keep in mind the unforeseen expenses
such as home repairs, agent fees and closing costs. You
can never save too much!
1. Mortgage. Applying for a mortgage can be an
intimidating process, but if you prepare accordingly,
you’ll be happy with the outcome. According to
LendingTree.com, mortgage lenders are allowing
higher debt levels for borrowers with lower down
payments (as little as 3 percent on a conventional
mortgage loan). You may not need the typical 20
percent down that was required of homebuyers a
few decades ago. If your debt-to-income ratio is high,
you may not have to worry. Mortgage companies
are making it easier for borrowers with more debt to
still qualify.
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Real Estate
9. SELLING:
Will renovating always increase my resale value?
Make conscious decisions when renovating your home.
While newer will entice potential buyers, be cognizant of
what rooms you update and how you do it. While updated
kitchens will increase the value of your home, be sure to
appeal to a wide range of tastes. A good place to start is
with the appliances. Realtor.com states that homes with
stainless steel appliances sell 15 percent faster than those
without. Updated bathrooms are easier to satisfy a wider
range of buyers’ desires for luxury, but be sure to keep the
colors neutral.
10. SELLING:
Don’t spend earnest money!
Many sellers make the mistake of depositing and spending
earnest money before closing day. If the transaction doesn’t
go through or the buyer pulls out due to repair issues, it is up
to the seller to return the cash. It is recommended to have
a real estate agent or broker hold the deposit. Most buyers’
earnest money will be held in an escrow account until the
closing day, allowing the money to remain untouched by
either party.
FUN FACT:
Get the name and numbers.
Just when you think you’ve checked all the boxes for an
easy sell of your house, take a second look at your address.
According to Zillow, street names and house numbers
matter! If you happen to live at 666 Fanny Hands Lane, you
may be out of luck (however that particular street is in the
United Kingdom, so you should be safe). Innuendo-laden
street names tend to not sell as quickly as something more
like Thunder Road. American numerology says that 666
is bad luck and could decrease the value of your home by
2-3 percent. Also, steer clear of the number four, considered
unlucky in Chinese culture. Stick to the number eight, or
include the lucky digits 316 in your asking price!
Before entering the real estate market, educate yourself.
The more you know, the better your chances are for nailing
down the home of your dreams! ■