BTW – Your First Stop should be with a Trusted Real Estate Advisor!
To Buy or Not to Buy
There are advantages to buying real estate. One of the biggest has to do with your finances. If you have the taxable income, you maybe able to write off the mortgage interest.
Mortgage interest has to do with the interest your bank is charging you for the money they lent you.
During the first few years of your mortgage it can be a majority of your payment. The other “part” of your payment is applied to principal. Principal is the actual money going to paying off the home.
Other reasons have to do with quality of life. It’s nice to have something that is “yours” and not the property of another. “Another” whom you are helping pay off their real estate investments.
Learn Types of Lenders
If you are from a wealthy family, you may not need to buy a home using a mortgage. You may not need to speak with a real estate lender because you will be buying the home with saved money.
For most of us, that is not a possibility. We will need to obtain a mortgage from a reputable real estate lender.
There are three main types of real estate lenders:
1 – Banks – These are the main financial institutions in the country like Wells Fargo, Citi Bank, Chase, Bank of America and Union Bank. They lend money to home buyers. In some cases they are reported to be “cookie cutter” and “non-flexable”.
2 – Credit Unions – These are those entities that lend money mostly from their own coffers. They don’t typically re-sell the loan after they lend the money. They are pro-ported to have good interest rates if you fit within the programs they offer.
3 – Mortgage Brokers – These differ from Banks and Credit Unions due to the amount of sources of money they can draw from. This fact can be of benefit to the home buyer due to the “better flexibility” of the Mortgage Broker.
How much can you Afford?
Whichever lender you and your Trusted Real Estate Advisor decide is the best fit, find out how much you qualify for.
That is the “top” of your real estate lending option. If you and your advisor find out you can “qualify” for $600,000, you may see that payment and consider it to0 “strenuous” to make each and every month.
That is why considering “afford” is more important than what you qualify for.
Some agents will push you to qualification limit. If you encounter one of these, run for the Hills.
The same applies to real estate lenders. Some will also push you for various reasons, most being self centered and commission based.
The higher the loan or price of home, the more the Real Estate agent and the Lender make.
Additional Tip – The 3.5th Step
Your first stop on your real estate journey needs to be the Real Estate Agent. Find one in your market that you can trust and one that will take the time and sit down with you. This should occur before you start looking at homes and real estate.
This step could occur before you meet with a lender. Also, this should happen before you go into open houses or new construction.
The reasons is that you need a quality game plan when it comes to real estate. Homes cost a lot of money and the return of home ownership can be quite handsome.
Your qualified real estate agent will be able to get your real estate sights aligned so you will be able to hit the “home target” with ease.
I’m Connor and I’d love it if you interviewed me when it comes to everything that is real estate. I’ll be here for you as I have been for thousands of home buyers. Reach out to me when you are ready and please share this post of the “3.5 steps for Santa Clarita home buyers” to those who you know.