WOW! What a beautiful day today here in The Bronx to be out and about House Hunting! If you’re shopping for your first home today here’s some simple advice to help you make the right decision on your home buy.
1. Wish List: Be sure to have a WRITTEN wish list of everything you want in a home. Include features, condition (how much improving are you willing to do?) and location (proximity to transportation/work and desired school districts). When you find a home that comes pretty close to your wish list, it’s a good house for you!
2. Focus on TOTAL Monthly Mortgage Payment. Your total monthly mortgage payment includes the Principal and Interest of your mortgage loan, one-twelfth of your property taxes/Homeowners Insurance/Flood Insurance/Mortgage Insurance (depending on the mortgage loan program), otherwise called “PITI.”
Your Mortgage Banker should be only a phone call/text/email/tweet away from providing you with an accurate TOTAL monthly mortgage payment. I advise this to be the best option for accurate information as opposed to online calculators. Your Mortgage Banker will be more familiar with local common and customary costs such as Homeowners Insurance and Flood Zone costs as well as local property taxes (be wary of the property taxes listed in the real estate listing for under-estimating).
If you’re qualified for a mortgage loan program that requires mortgage insurance (PMI, FHA, or VA Guaranty) those online calculators can’t correctly calculate your monthly insurance. If your Mortgage Banker isn’t available or isn’t familiar with those local common and customary costs you need to find a different Mortgage Banker!
3. Make OFFERS promptly. Nothing demonstrates that you are a serious buyer like making an OFFER on a home immediately. Don’t wait until Thursday! If a home comes close enough to your basic Wish List requirements and the total monthly mortgage payment fits your comfort zone then strike while the iron is hot!
You’ve got nothing to lose and everything to gain! Sellers want to work with serious buyers, and so do their real estate agents. Get your Offer prepared in writing with your agent before you go home. Then enjoy your evening and let the real estate agents and the Seller fret, worry, and negotiate with YOU.
4. Prepare your counter-offer position. Assuming the Seller doesn’t accept your initial Offer, prepare your pricing strategy for the next highest price you’re willing to go up to. Once again, focus on Total Monthly Mortgage Payment. Never pay more than you’re comfortable with! And, prepare your “walk away” strategy, too. Some Sellers and their agents are just too unrealistic with their pricing expectations. If they don’t respond to your Offer in a reasonably prompt manner, and with a reasonable counter-0ffer (less than 5% of List Price is NOT reasonable IMHO), then it’s time for you to walk away from the negotiating table. Let them chase YOU. After all, you’re a prepared and serious buyer, not a time-waster.
5. Line up your professionals to move your deal along. Be sure to have your ATTORNEY, your HOME INSPECTOR and, of course, your Mortgage Banker all lined-up and ready to jump on your home buying bandwagon once you and the Seller have worked out and agreed on your terms and price. Your professional team should respond to your heads-up about your accepted Offer within less than two hours, IMHO, to help you prepare to buy your home.
Do you have questions about Total Monthly Mortgage Payment? Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in New York State.
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Happy House Hunting!