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Essential Home Financing Tips for Your New Home

Real Estate

Essential Home Financing Tips for Your New Home

As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing with financing so that you can take down that “for sale” sign on your new home.

Get pre-approved.

Sub-primes may be history, but you’ll probably still be shown homes you can’t actually afford. By getting pre-approved as a buyer, you can save yourself the grief of looking at houses you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.

Client Story: “When we got pre-approved early, Natalie helped us focus on homes we could realistically afford, saving us weeks of stress and disappointment.” — Mark and Lisa, Laguna Beach

Choose your mortgage carefully.

Used to be the emphasis when it came to mortgages was on paying them off as soon as possible. Today, the debt the average person will accumulate due to credit cards, student loans, etc. This means it’s better to opt for the 30-year mortgage instead of the 15-year. Now, you have a lower monthly payment, with the option of paying an additional principal when money is good.

Paying additional points.

Additionally, when picking a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate. If you plan to stay in the house for a long time—and given the current real estate market, you should—by taking the points, you will save money.

Client Story: “We chose to pay points upfront, and over the years it saved us thousands in interest — a decision we wouldn’t have known about without Natalie’s guidance.” — Rachel, Mission Viejo

Do your homework before bidding.

Before you make an offer on a home, do some research on the sales trends of similar homes in the neighborhood with sites like Zillow. Consider especially sales of similar homes in the last three months. For instance, if homes have recently sold for 5 percent less than the asking price, your opening bid should probably be about 8 to 10 percent lower than what the seller is asking.

Pro Tip: Working closely with your lender and real estate agent to review current market trends can help you craft a winning offer that’s both competitive and financially sound.

Thanks for taking a look at some tips for dealing with financing!

Always seek the assistance of a real estate professional when buying a new home!

Thinking about making a move? Contact Natalie today, 949.929.5727.

*Information provided is for educational purposes only and does not constitute financial advice.

Natalie Boyle headshot – Verso Homes founder
Natalie Boyle
REALTOR®, Founder of Verso Homes (DRE #01329012)
Over 15 years helping South Orange County homeowners discover their perfect community.
Learn more about Natalie →

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