A Guide to Mortgages

With just a little bit of research and some foresight, however, getting a mortgage that will work now and into the future can be easier than you think. First, you need to review your finances and decide what sort of monthly payment you can afford today. Be realistic. It`s easy when you have a house in mind to tell yourself that you can afford something that you can`t. Think about it from all angles. You don`t want to end up “house poor” with no money left over after paying all of your bills.

Once you have this figured out, it is time to think about mortgage terms. The most common mortgage type is a 30-year note with a fixed interest rate. Rates are still near multi-year lows, so be sure to shop around to find the best rate for your mortgage. If paying your house off as quickly as possible is your goal, consider a 15-year fixed rate mortgage. With a shorter term, banks will generally offer a more desirable interest rate. If you go the 15 year route, be sure that you aren`t overextending yourself, as these notes will result in much higher monthly payments than their 30-year counterpart.

More exotic options can be found in loans called adjustable rate mortgages (ARMs). ARMs can give you a lower rate on the front end, but this rate can generally adjust every year, creating a significant difference in your monthly payments. A lot of folks choose ARMs due to the lower up-front costs under the pretense that they will either earn more money in the future to be able to afford a higher payment, refinance the mortgage into a fixed-rate loan before the rate adjusts, or only live at this residence for a short period of time. Be extremely cautious when going in this direction, however. Plans change and banking on never having to deal with an increasing interest rate can be a dangerous game. A lot of recent foreclosures have come as the result of homeowners not being able to afford their monthly mortgage payment after their ARM was adjusted higher.

After you go through the process of deciding on the best mortgage to fit your needs and the ink is dry on the loan papers, all that`s left to do is move into your new residence. The last thing you want to worry about is moving all of your furniture, so definitely consider looking at some moving companies to help you with the heavy lifting associated with a move.

Getting the Best Deal Possible on a Newly Built Home

One thing that is favorable for people who want to buy new construction is something that most people cringe at: economic recession. The time during a recession can constitute one of the best conditions under which to buy a newly built home. Home prices are generally significantly lower during a recession than during times when the economy is booming. So if you are planning on building a home and want to find a great piece of land, it may be wise to look for the right land then. A recession is particularly helpful for the prices of spec homes or inventory homes. A spec, or speculative, home is one that has been built without having been sold, in the hope that an interested buyer will come along and buy it. The reason for this is that the lots are already purchased and developed and the work is committed on these homes and the builder does not want to be stuck paying for the upkeep and other expenses of the newly constructed home. They want a buyer to take it off of their hands. They are often prone to negotiate a lower price in order to avoid carrying the overhead costs. You can often get a much better deal or maybe get a home with many upgrades that would not otherwise have been included in the original plans. You can expect to save a lot of money on a newly built home during a recession.

Even without being in a recession an economical way to buy a home is to look for a home that has been built on spec. This is a home that a builder has completed or is nearing the completion of construction, but without having been sold. The home has been built with the intention that it will be sold. They want a buyer as soon as possible so that they can recover the money they have shelled out on the build and do not continue to incur costs for carrying the home while it is just sitting idle there unsold. This is definitely a much more affordable choice than choosing to have a custom home built to your exact specifications. You may get fewer personalized options when buying a spec home or an inventory home but on the other hand the costs can be as low as half the price of building a custom made home where you design the home and make all your own choices.

Another consideration is the long term investment value of the home rather than just thinking about the initial price. If you consider all the things that will increase the value of the home in the long run and will increase the resale price of the home then you may get the best long term deal by selecting with care. Evaluate the location, size of the lot, and the floor plan. Some floor plans will help the home’s value and by making the home more attractive to more people. Subdivisions that are near transportation, schools, and other community facilities are better for when you want to sell.

As a closing point, your best advice is to negotiate firmly and from a strong bargaining position. You can assert yourself. This is your home and the builder needs to make the deal. The company that built the home needs to work with you rather than have you go to some other builder or choose another home, so it never hurts to bring it up. Explore what your options are and find out everything you can about your financing choices. You can get a great deal and the perfect home by taking steps to be an informed buyer.

This information was made available by Automated Homefinder, Colorado’s online resource for information on Lafayette CO homes for sale.

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Disclaimer

This site is intended for clients that are not currently registered with a Broker. If you have a current Buyers Representation Agreement signed with another Texas real estate Broker, please contact your Agent or Broker. Texas Real Estate Commission Consumer Protection Notice