Even if you can afford the cost of a home, remember owning a house requires additional expenses a renter doesn’t have to pay. For example, homeowners have to pay for insurance against disasters, for home repairs and improvements and for property taxes. In addition, condominium owners are required to pay maintenance fees as part of the homeowner’s association. Be sure to make yourself away of the additional expenses of owning a home so you don’t find yourself in trouble after purchasing.
NEXT Mistake 4: Being too picky.
Before you place an offer on a house, obtain a pre-approved loan. This way, you won’t agree to something before knowing you will be able to pay for it. Also, understand that even after you’ve been pre-approved, the loan can still fall through if you do something to dramatically alter your credit score, like buying a car.
Therefore, when buying a house, it’s important to not only receive a pre-approved loan, but to also hold off on other large expenses for a while. If you really can’t wait to get that new car, perhaps you should hold the home purchasing process until later. After all, only you can determine what’s most important for yourself and your family.
Budgeting isn’t easy, but the fact is, if home buyers don’t set a budget for what they can afford for a house, things can go terribly wrong. The recent subprime mortgage crisis is a perfect example. Banks may say home-buying hopefuls can afford an amount they actually cannot afford. Budgeting is one way to ensure you don’t get trapped by knowing what you can and cannot afford to remain financially comfortable.
Create a budget that includes your major expenses. Examples of major expenses could be student loan payments, transportation costs (gas, car payments, etc.), credit card bills, cable bills and telephone bills. Also be sure to include expenses that come only once a year, like holiday bills or taxes. Add all this together and subtract it from what your earnings — the result is what you can afford on a house.Home buyers who skip this step could end up either badly wanting something they can’t afford and/or putting themselves at risk financially.
Mistake 2: Skipping Mortgage Qualifications.
Grand Mart at Lincolnia in West End Alexandria
Grand Mart International Food is a supermarket chain primarily based in the Washington, D.C. metropolitan area, with locations in North Carolina and Georgia. It is owned by Annandale, Virginia-based Man Min Corporation, a family company. My wife shops there from time to time and she loves the wide selection of Korean and East Asian groceries and fresh produce.
The store in Lincolnia is somewhat international offering Asian, Latino, African and traditional North American groceries, but Grand Mart caters to Korean cooks and grocery preferences. Grand Mart supermarkets also offer in-store Korean bakeries and video rental shops which rent out DVDs of television shows from South Korea.
The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system by:
insuring deposits,
examining and supervising financial institutions for safety and soundness and consumer protection, and
managing receiverships.
The FDIC is located near Virginia Square Metro and is located at 3501 Fairfax Dr, Arlington VA.
Average sale prices for homes in foreclosure and those owned by banks rose 1.6 percent in the second quarter compared to the first quarter and 6.1 percent year over year, according to RealtyTrac, a foreclosure marketing service.
The average price of these homes in the second quarter was $174,198 nationwide, but was significantly higher in California where the average price, according to RealtyTrac, was $256,833. These prices reflected homes sold by lenders or by homeowners who had received at least one notice of default.
About 24 percent of all properties sold in the second quarter were REOs and foreclosures. Their prices were on average 26 percent lower than those of homes not in foreclosure, RealtyTrac reported.
RealtyTrac Senior Vice President Rick Sharga projected that it would be the end of 2013 before the housing marked works its way through the foreclosure inventory.
Source: Los Angeles Times, Alejandro Lazo and Daily Finance, Hugh Collins (09/30/2010)
Julie Nesbitt
Julie Nesbitt knows the back trails and by-ways of Northern Virginia real estate.
Established in 1974 with a mission to reduce homelessness, increase community support and promote self sufficiency, the Good Shepherd Housing and Family Services is operated by a multi-denominational board of directors and staff managing over 70 housing units. Good Shepherd Housing and Family Services is located in the Mount Zephyr Business Center at 8305 Richmond…
Will mortgage rates ever drop to 0 percent?
Zero percent financing has long been a loss leader in the automotive industry, but Keith Gumbinger, vice president of HSH Associates, a provider of mortgage information, says that scenario is unlikely. You’d have to find an investor who would buy a security with a zero return – a hard sell even today.
Jim Sahnger, mortgage associate Palm Beach Financial Network, concurs that the funding would be hard to find “unless there were significant fees on the front end to compensate for costs to originate, deliver, default, etc.”
If 0 percent financing could be funded, Sahnger believes potential borrowers would be lined up, kicking up demand for houses.
Gumbinger isn’t so sure because buying a home is a bet on the economy and that kind of confidence is hard to find, he says. “People are concerned that tomorrow is not going to be better than today.”
Source: MarketWatch.com, Amy Hoak (09/27/2010)
Julie Nesbitt
Julie Nesbitt knows the back trails and by-ways of Northern Virginia real estate.
Established in 1974 with a mission to reduce homelessness, increase community support and promote self sufficiency, the Good Shepherd Housing and Family Services is operated by a multi-denominational board of directors and staff managing over 70 housing units. Good Shepherd Housing and Family Services is located in the Mount Zephyr Business Center at 8305 Richmond…
The percentage home owners with mortgages who spent 30 percent or more of their household income on housing, including mortgage payments, taxes, insurance, and utilities, was 37.6 percent in 2009, almost unchanged from 2008. At the same time, the median home price dropped about 6 percent, according to data from the U.S. Census Bureau.
Renters weren’t so lucky. The number of renters spending 30 percent or more of their household income on housing-related costs rose to 51.5 percent of all renters in 2009, rising from 50 percent in 2008, according to the Census.
Two factors affected housing affordability:
Median household income, adjusted for inflation, fell 2.9 percent in 2009 as unemployment rose.
Median monthly housing costs, including rent and utilities, rose 3 percent in 2009 from $818 to $842.
Here are the products grabbing the attention of the home building and remodeling industries, according to Bill Millholland, executive vice president of sales and marketing at Case Design/Remodeling in Maryland, and Jamie Gibbs, a New York-based interior designer:
Appliance Drawers. Small warning drawers, modest-sized dishwasher drawers for small loads, refrigerator drawers and microwave drawers.
Counter-depth refrigerators. Some are only 24 inches deep.
Motion-detecting faucets. Like you'd find in the restrooms of businesses.
LED (light-emitting diode) lighting. These are used under cabinets and in ceiling fixtures as a longer-lasting, more efficient alternative to compact fluorescent lamps and incandescent bulbs.
Electric heated floors. A nice touch in bathrooms,
Showers with multiple heads and body sprays. Bathtubs are out.
Will Nesbitt -- principal broker of Condo Alexandria / Nesbitt Realty
I'm often asked for recommendations for financing. First-time home buyers often don't know where to begin, but even veteran purchasers like to know who I suggest. This is also important for relocation buyers. Condo Alexandria\ Nesbitt Realty never makes any money off of loans and our only goal is to see that your transaction happens smoothly and at the lowest cost. My recommendations are based on direct experience, so this list only includes folks I know personally.
One distinction for first-time buyers: a mortgage broker is a company that arranges for loans with lenders. Mortgage brokers don't technically make the loans, rather they get a cut from the bank for finding borrowers. Mortgage bankers actually loan the money. Mortgage bankers usually have good prices. Mortgage brokers with low overhead can sometimes beat the banker's price. On the other hand, mortgage brokers without a conscience can hammer the consumer. In other words, mortgage brokers often have more discretion on their price.
Condominium Mortgage
Condominium Mortgage is a mortgage broker in Alexandria VA. Although we used to send the bulk of our loans to Condominium Mortgage and American Affordable Mortgage, many of the lenders that provided loans to to these Condominium Mortgage have gone out of business. This company now focuses on buyers with top-flight credit and bankable incomes, providing discount loans for high-end buyers.
Alexandria Financial
Dillon Lee runs a nearly one man brokerage in Alexandria VA. Dillon has years of experience and can help all types of buyers. He specializes in keeping his overhead low to pass savings on to consumers. You won't always get Dillon the first ring, but once he answers he is a great loan officer. Call him at 703 360 8868.
Don Bucci
Don Bucci is a friend of mine dating back more than 25 years ago to my time in the Army. Don works for a mortgage banker with an office in Richmond VA where he resides. Don can sometimes beat Northern VA prices because of lower overhead working in Richmond. On the other hand, Don can't meet with you personally if you're buying a home in Northern VA. His number is 804 400 0864.
Kelly Garant
Kelly works for Wells Fargo. I think the "big boy" banks like Wells Fargo and Bank of America often have great prices, but it's tough to get an experienced and accountable loan officer for these big banks. (Tip: NEVER call the 800 number for a mortgage.) You can get Kelly at 703 442 5338. She works for the big bank but you'll get the service you expect from a small lender.
James Thompson
James is fairly new to my acquaintance but he's impressed me with his attention to detail, pricing and work ethic. James works for AmericaHomeKey, Inc. You can call him at 240 499 1140.
Gregory Williams --- Home Mortgage Consultant, Wells Fargo Home Mortgage 7620 Little River Turnpike, Suite 300, Annandale, VA 22003, (703) 333-5560
Kenneth A. Cyr, CMPS Mortgage Banker, Mortgage Planning Specialist, Asst. Manager Primary Residential Mortgage, Inc. 8001 Braddock Road, Suite 101, Springfield VA 22151. Call him at 703.426.6968
A few more tips ...
Credit Unions promise great rates but there is often a funding fee or other fee that basically makes the price the same as a mortgage broker or mortgage banker. The trouble is the service at credit unions is often poor.
Above all, we're I've seen the biggest problems is with out-of-the-area fly-by-night Internet lenders who hang customers out to dry after promising a great rate.
Recently, I've also seen a pattern of delayed closings with Bank of America. Bank of America has had an influx of business since the onset of the financial crisis and they don't appear equipped to handle the volume of loans they are trying to do.
Will Nesbitt is the principal broker of Condo Alexandria / Nesbitt Realty.
