3 Most Important Aspects of Real Estate for First Home Buyers is Location, Location, Location

When shopping for your First Home, few families will compromise on Location. Have you heard Real Estate Agents refer to the saying, “The three most important aspects of real estate are: Location, Location, Location”?

That’s because it is vital to ensure a property is in the most desirable location for the type of property it is and your lifestyle.You can make improvements to the house like getting new appliances in the kitchen, remodel the bathroom or get a new roof.  You can even go to extremes and knock the whole house down and build a new one, however, you cannot change its location.

So the question remains: What determines if a property is in a desirable location?

An appealing location will have several components, one of which is the neighborhood. If the neighborhood is unpleasant with noisy and problematic neighbors, then most people will not want to live there. The design of the neighborhood is also relevant. Is it near a busy street, or are the houses too close together? Here are some other factors to consider.

City vs. Suburb vs. Rural   The setting you choose within the city or town you select will affect the amount of peace and quiet you have, lot size, education options for your children, proximity to shopping, entertainment, medical services and anything else you might want or need, and more.

Affordability   Another component that makes a location desirable is the overall affordability of homes within a neighborhood. A homeowner’s budget is a very relevant part of the home buying process, and some may choose to live in a less convenient location because of price.

So be sure you talk to a mortgage professional first and get Mortgage Pre-Approval before you go shopping for your First Home.

School District   If you have or are planning to have kids, it may be a good idea to consider the quality of neighborhood schools when choosing your location in order to maximize your investment.

Commuting Distance   The distance to the job is another component that determines a desirable location. The extra hassle of spending extra hours and gas money commuting to a job everyday multiplied by the amount of years you’ll spend in the home may not be worth it.worth it.

Safety   For most people, the crime rate is a top consideration. In my quiet neighborhood, the fire hydrant in less than 100 yards away and I know from experience that first responders will be at my door less than 5 minutes from my 911 call.

Proximity to Friends, Family   Your dream home may not feel homey if you live too far away from your friends and can’t see your family on a regular basis. On the other hand, your friends and family might end up moving at some point, so make sure this isn’t your only reason for choosing a location.

Proximity to Leisure Activities   What do you enjoy doing in your free time? If your favorite thing to do is stay home, you might have more choices available to you when it comes to this aspect of choosing your location.

Overall, buying a home is a very large investment, so you want to make a well-informed decision. Having a responsible and reliable real estate agent will help advise you on the pros and cons of any home you are considering buying. Just remember, Location, Location, Location.

Open House Tips for First Home Buyers

In today’s real estate market, most prospective First Home Buyers will be entering a house they’ve seen pictures of online. While these shots can give you a good idea of whether or not you like a house, visiting it is still a primary requirement.
An Open House can be a great opportunity to see a property in a more informal setting, letting you explore it a bit on your own. 

The first thing you should look into doesn’t even concern the house at all. Explore the streets surrounding the house and take note of those who live there. Well-kept yards and kids playing outside can be signs of a great neighborhood while overgrown lawns and a lack of activity may be bad signs. Especially if a family is part of your plans, the neighborhood could be a crucial factor and is something that is difficult to get a feel for without visiting.

Once you arrive at the house, take a look at the outside before you head in. Does it have Curb  Appeal? Does anything need repair or new paint? Does the roof look sturdy and intact? Chances are most things you notice will be cosmetic fixes, but if anything does jump out at you, you’ll be happy you took a look.
Further, taking a lap around the house will let you know what level of privacy you have. Some people like to be able to always chat with their neighbors while some want to be left alone. Whatever your preference, it is good to know what you are getting into.

Finally you should enter the house. Do a full tour and explore everywhere you are permitted. From the basement to the attic, you should look everywhere. It is always a great idea to take a tape measure with you to look at sizes of specific areas and the dimensions of drawers and cabinets. While you do not want to be overly pessimistic, it is vital to examine the home with a critical eye. Even the smallest spot of mold, for example, could be a sign of a bigger problem. Structural shortcomings can be tricky to spot as well, but are extremely important. Foundational cracks, leaky walls and windows, and uneven floors can all easily go unnoticed, especially in darker areas like the basement. Besides crucial issues, there are some other factors to consider, many of them intangible. Things like the flow of the house and the way light enters are virtually impossible to tell through pictures, but can make a difference in person

Another great area to focus on is the people around you: the sellers, their agent, and other potential buyers. While you always want to remain extremely polite, you are certainly entitled to ask questions of the sellers and their agent. While they will put a positive spin on things, getting them talking about their reasons for moving can provide extremely valuable insight. Ask their opinion on the neighborhood, schools, etc. Also, keep your ears open to other buyers. They may know more about certain aspects of the area or point out something you may have missed. You should take advantage of every potential information source at your disposal.

 

While we focus on a lot of small things here, it is still very important to consider the bigger picture. Things like layout, number of bedrooms, bathrooms, and square footage are all extremely important. However, chances are you are aware of all of these things before you visit the property. Even so, verify all of the details listed online to be sure there are no surprises later on. Between what can be discovered online and what you’ll see in an Open House, you should be able to get a great idea of whether or not you are ready to proceed with an offer.

What is a Home Inspection?

The Home Inspection should cover the structural and mechanical condition of the house, including the roof, heating, plumbing, air conditioning and wiring.

A Home Inspection protects you from buying a dwelling with serious, previously unknown problems. Your purchase offer should be contingent on the results of the home inspection, so that if you find major issues, you can walk away from the house with no penalty. And if minor problems are found, you may require the seller to fix them or adjust the price.

A Home Inspection typically costs between $250 and $500.

What is A Mortgage Rate Lock?

At some point during the mortgage application process, the borrower must exercise their agreement with the lender to lock in the rate for their final mortgage. 

What is a Mortgage Rate Lock?
A Mortgage Rate Lock protects the borrower from the risk that interest rates will increase during the rate lock period. It guarantees that the lender will offer the borrower a specific combination of interest rate, points or interest rate credit at the closing of their loan.
If market rates rise after the rate is locked, the borrower will still get the lower rate, to the lender’s detriment. But there’s a downside: If rates fall after the rate is locked, the borrower might not be able to take advantage of that opportunity. 

When Can a Mortgage Rate be Locked?
Buyers typically must wait until a seller has accepted their purchase offer for a specific property before they can lock in an interest rate for their mortgage. In addition, the lender must have certain information about the borrower and the details about the transaction before a rate can be locked. This includes receipt of all signed legal disclosures, the borrower’s credit score, anticipated loan-to-value ratio, property type and the borrower’s signed intent to proceed with the transaction. Until all pieces of the puzzle are in place, the lender can not accurately commit to any final interest rate, cost and terms.

How Long Can a Mortgage Rate be Floated?
When a mortgage rate is locked depends on the borrower’s tolerance for risk. The purchase and sales contract dictates when the loan must close. The borrower may opt to let the final mortgage rate ride or “float” with the market until they feel they can get the best deal. Of course they run the risk that the market will turn in their time period and rates will rise from current conditions.
A good mortgage loan officer may have, in good faith, projected a final mortgage rate for processing purposes, but the mortgage application cannot be approved until the final rate has been locked in.
In today’s mortgage processing environment, a mortgage rate could be floated until about 14 days prior to the prescribed closing date. This should give the lender to deliver the final disclosures, the underwriter time for a final review of the application and to issue a “clear to close,” and time for the closing deportment time to deliver closing package to the closing agent.

Should You Choose a Longer Rate Lock Period?
Borrowers are well advised to choose a 45 to 60 day rate lock period to ensure they can get the agreed upon rate even if there is a delay in processing their mortgage application. If a loan fails to close within the rate lock period, the borrower will charged the higher of the original lock and the current interest rate. If rates are higher, the borrower may be offered the opportunity to extend the original rate at a cost of 0.25 points for each 7 day period. (A point equals 1.00% of the base loan amount)

How Much Does a Rate Lock cost?
Most lenders will not charge for a Mortgage Rate Lock.  . But a rate lock isn’t free. Rather, a longer rate lock typically involves a higher interest rate, which is more expensive for the borrower. The interest rate or “pricing” difference between a 15-day rate lock and 60-day rate lock might be as little as one-eighth or could be as much as half of a percentage point. The longer period protects the lender from potential market deterioration. The shorter the rate lock period, the more risk the borrower is taking on, but they should be getting a better price.”

No Mortgage Loan officer is an interest guru. But he does understand the lender’s commitment to you and will do his best to honor the rate lock obligation. However, the complexity of your application and issues like: failure to provide additional documentation in a timely manner, appraisal concerns, possible title problems all add time to the process.

There is rarely a reason not to lock a loan as soon as you can. Interest rates change daily, sometimes hourly. To protect yourself against the volatility of the marketplace, it’s a good idea to lock your rate once you are satisfied with the rate. The reason some buyers dislike loan locks is because they want to grind every dime out of a transaction that is humanely possible. Just remember that if the rate was acceptable when it was locked three weeks ago, a drop of an 1/8 of a point or so isn’t the end of the world. You don’t need to be that kind of borrower to get a good deal.

Read more: http://www.bankrate.com/finance/mortgages/questions-rate-lock-answered.aspx#ixzz3cy8lb29i