Kristen Meleedy, CBR's Blog
Buying a new home is a joyous occasion, one that should be celebrated by family members and friends. However, telling people about a new home purchase sometimes can be tough, particularly for those who may be leaving roommates or others behind.
Lucky for you, we're here to help you alleviate the stress and worry commonly associated with telling family members or friends about a new home purchase.
Here are three tips to ensure you can remain calm, cool and confident as you inform your loved ones about your decision to buy a new home.
1. Prepare As Much As You Can
Purchasing a house is a life-changing decision, and as such, your loved ones may have concerns. Therefore, you should plan ahead for any questions that you could face about your new house.
Why did you decide to buy a home in a particular city or town? How much did you pay for a house? And what does your home purchase mean for your loved ones? These are just some of the questions that you should prepare to face when you share the news about your new home purchase with loved ones.
Also, it is important to realize that you and your loved ones won't always see eye to eye. And if a family member or friend disagrees with your home purchase, accept his or her opinion and move forward.
2. Take a Proactive Approach
When it comes to informing others about your home purchase, it is always better to err on the side of caution. Thus, taking a proactive approach will ensure you can directly inform the most important people in your life about your home purchase.
Communication is key between family members and friends. With a proactive approach, you can inform your loved ones about your homebuying decision and minimize the risk that they will hear the news from a third-party.
Don't leave anything to chance as you determine who to tell about your home purchase. If you believe there is a risk that a loved one will be left in the dark about your new home, be sure to reach out to this individual directly.
3. Understand the Emotions Involved with a New Home Purchase
A new home purchase represents a new opportunity for you and your family. If some family members and friends feel left out of your upcoming move, many emotions may bubble to the surface.
Keep the lines of communication open with family members and friends – you'll be glad you did. That way, loved ones can share their thoughts and feelings about your new home purchase and understand you will allocate the time needed to hear them out.
If you need extra help as you get ready to tell loved ones about a new home purchase, don't be afraid to ask your real estate agent for assistance, either. This real estate professional understands the intricacies of purchasing a home and can provide expert guidance throughout the homebuying journey.
If you thought we'd answer "It all depends" you're absolutely right. So, lets take a look at the upsides and challenges of old and new homes.
Buying an Older Home or Condo
If you fall in love with an older home or condo, your real estate professional will guide you through the inspection process and help you estimate your costs for indispensable repairs. Electrical outlets, for example, must be up to today's standards... Safety first! Request the necessary fixes as part of the sale or ask the seller to prune the asking price.
Compare homeowner's insurance estimates and taxes before making an offer, too. A more up-to-date property might be cheaper on both counts.
For buyers with chemical sensitivities and allergies, old homes can be attractive. There won't be as many new materials in the older home.
And some prefer a traditional aesthetic. Some of the most beautiful and well-made homes are older homes. As long as you have the home thoroughly inspected, and a plan to handle the needed upgrades, a home with history and character can be yours to enjoy for many years to come.
Buying a Newer Home or Condo
New homes are made with state-of-the-art materials. They're usually energy-efficient. So are their appliances. Expect lower electricity bills with a newer house.
For buyers considering condos or townhomes, monthly homeowners' association fees are often at their most reasonable when the property is of recent vintage.
New homes are becoming increasingly safe and supportive, thanks to new technology. Smart homes can be a little pricier – perhaps 5% more than a traditional residence. Highly desirable technology could add as much as 10% to the price, but rarely more.
Smart Home Technologies: Evolving From Options to Standard Features
Across age groups, buyers appreciate smart home lighting and thermostat systems, as well as high-tech AC and kitchen appliances. Owners like security systems hard-wired into the home, and video doorbells. Devices that show visitors at the door and alert the owner if someone's on the porch are big draws in the era of home grocery and package delivery.
So, be on the lookout for smart technology when touring houses and condo properties. A special mention goes to the innovations that make greater independence possible for homebuyers. New features include a wide range of security sensors, and devices that notify homeowners of medication times or help visually impaired people navigate daily errands, desires and needs.
Need Support Finding Your Perfect Home?
Let us know! With an expert real estate professional on your side, your home can have the character and features you value. You'll also have support in negotiating a price. And that can help you update a new-to-you home just as you wish.
Many home buyers have lots of questions as they go through the buying process, especially first-time buyers. Whether you’re looking for a $50,000 house or a multi-million dollar luxury home, the questions are often the same.
How Much House Can I Afford?
Lenders use several factors in determining whether to loan you money, including your credit score, loan-to-value and debt-to-income. If you are self-employed, you could make $400,000 per year and still not afford a $150,000 home. Lenders look at your income, and if you are self-employed like many luxury home buyers, you use tax deductions and expenses to your benefit. However, doing that lowers your adjusted net income. If your adjusted net income plus depreciation doesn’t meet the debt-to-income bar for the lender, you won’t qualify for the loan. People in this situation need to find a lender who will lend based on bank statements instead of tax returns.
How Convenient Is This Location?
Luxury home buyers often have location concerns. You travel more and have more people — friends and relatives — visit. That means you need a home location that is convenient for travel. If travel convenience is a concern, ask your real estate agent about the distance to the airport, the ability to rent limos, and other travel concerns.
How Much Down Payment Do I Need?
Most loans require 20 percent down if you do not want to pay private mortgage insurance (PMI). However, if you are buying a multi-million dollar luxury home, that might be difficult if you don’t have liquid assets. Before you start looking, get a pre-approval from a jumbo lender, including the amount the lender requires with and without PMI. You can adjust the amount you are willing to spend or take the time to liquidate assets to get the down payment if you have your heart set on a home that requires a high down payment.
What Does My Credit Score Need to Be?
Conventional loans have a cap, which changes depending on your location and whether the Federal Housing Finance Agency (FHFA) increases that cap. If your mortgage is going to be higher than that cap, you will need to take out a jumbo loan unless you put enough down so that you are financing an amount below the cap. When you take out a jumbo loan, you are at a higher risk to the lender, so you have to jump through more hoops, including having a higher credit score.
If you are applying for a conventional loan, especially a loan backed by the VA, Fannie Mae or Freddy Mac, your credit score could be as low as 500. However, with a jumbo loan, your score must be at least 680. Some jumbo lenders require scores as high as 720.
The perfect home is not the only thing you'll need to shop for when you want to become a homeowner. In order to get the best terms, the lowest monthly payment and a reasonable interest rate, start doing some homework now -- before you even attend your first open house.
1. Check Your Credit Score
Checking your credit score should be the first thing you do when you're considering the purchase of a home. Why? Because every lender you speak to will use it as a benchmark for determining the likelihood of you being able to pay off the debt. The better your credit score, the more favorable terms and interest rates a lender might offer you. The earlier you know your credit score, the more time you have to address any issues that might be contained in it. Remember, you're entitled to one free credit report from each of the three reporting agencies each year. Take advantage of this service and keep tabs on your credit score.
2. Have Steady Employment
Being able to demonstrate that you are gainfully employed will go a long way toward qualifying for a mortgage loan and being offered attractive interest rates. Aim for at least two years of unbroken employment. Be ready to back up your claims regarding the duration of your employment and the dollar amounts you bring home.
3. Offer a Sizable Down Payment
Come to the negotiating table with a lender and with a solid down payment, you'll be able to enjoy lower monthly payments. There's no fast rule regarding the amount of a down payment. That being said, most lenders like you to have at least 20 percent of the home's purchase price as the down payment. There are some lenders, however, who accept less than 20 percent. If your lender accepts down payments that are less than the standard 20 percent, expect to have to purchase private mortgage insurance. This can be anywhere from .05 percent to 1 percent.
4. Know Your Debt To Income Ratio
The debt to income ratio demonstrates your ability to pay off the mortgage as agreed upon. Most lenders like to see that your monthly debt payments are equal to or less than 43 percent of your gross monthly income.
In a seller's market, there might be several people vying for the same home. Addressing the items above can make you look more attractive compared to some of the other potential home buyers.
If you want to enjoy a seamless homebuying experience, it generally is a good idea to establish a property buying plan. That way, you can take a step-by-step approach to make your homeownership dream come true.
As you prepare a homebuying strategy, there are several factors to consider. These factors include:
1. Your Dream Home Definition
There is no one-size-fits-all definition of a dream home. Instead, this definition varies from buyer to buyer. But if you define your ideal residence, you can narrow your house search accordingly.
Think about the features you require from a home. For instance, if you want a house that offers multiple bedrooms, you can search for residences that provide you with the space you need. On the other hand, if you want a home that boasts a deluxe swimming pool, you can search for a residence that offers this feature.
Consider where you want to reside, too. By doing so, you can search for homes in a select group of cities and towns.
2. Your Homebuying Budget
You likely have only a finite amount of money that you can spend on a residence. Thankfully, if you establish a homebuying budget, you can search for houses that fall within your price range.
Oftentimes, it helps to meet with banks and credit unions before you start a house search. These financial institutions can teach you about a broad array of home financing options.
Don't hesitate to discuss your home financing options with a variety of banks and credit unions, either. If you check out myriad home financing options, you can select a mortgage that complements your finances perfectly.
3. Your Homebuying Timeline
You may want to create a timeline for buying a house. With this timeline in place, you will know precisely how many days, weeks or months you have to find and acquire your dream residence.
If possible, you should maintain a flexible homebuying timeline. There is no telling when problems may arise as you search for your dream house. And if your homebuying timeline is flexible, you can adjust it at any time.
For those who want to streamline the homebuying journey, you may want to employ a real estate agent as well. This housing market professional will go above and beyond the call of duty to help you find a great home at a budget-friendly price. Plus, he or she can offer expert guidance as you craft a property buying strategy.
Also, as you navigate the homebuying journey, a real estate agent will respond to any concerns or questions. Perhaps best of all, a real estate agent is happy to provide homebuying tips and recommendations that you may struggle to receive elsewhere.
Ready to transform your homebuying vision into a reality? Craft a homebuying strategy today – you will be glad you did. Once you have a homebuying plan at your disposal, you can navigate the property buying journey with poise and confidence.