Over the last few years and in certain regions of the country, we have been able to see a mortgage crisis occur, homes close due to no mortgage payments and sellers walking away and abandoning their homes in order to get out of the financial pinch so many were sold into.
Here is my take:
A lot of the people who moved forward and made purchases were either victims or setting themselves up to fail and here is why:
One: We are starting to see and hear rumors that a lot of people who were sold homes in the last few years made good moves for the time. In various publications, such as the Wall Street Journal, I can recall reading how a group of buyers who acquired real estate through one firm in northern San Mateo County were unaware of what they were buying because the people selling it to them took advantage of their good nature and used the sale to profit. The end result was the owners of the property lost all the money they had including their homes.
Two: During the prequalification period and truthfully, before one makes a real estate purchase, you should sit down with a mortgage advisor to find out what you should be looking for at a level that you can afford so you are not in a dull life scenario. Some people have over extended themselves to make payments which were low at first but adjusted to a higher rate after a certain time period. Knowing that they were going to have to make the payments, a lot of buyers put themselves in a pinch. They too lost their homes due to a poor decision.
So, now the question is, how does this relate to first time home buyers? Here you go: The days of zero down and an 80/20 loan are no longer. To find one and be approved you would have to be very well positioned. Do not count on anything coming to fruition be it lottery, stock options or funds you are invested in for the long or short term. In sales, a basic rule which many do not follow is DO NOT GUARENTEE FUTURES. It is a big rule and needs to be observed. This is why; I cannot tell you how much your home will appreciate. What I can do with a buyer is give them historical facts and figures that they can use in making their decision.
Part two to the last paragraph is what should I have to make myself look good? I'll list it out:
1. Have a good job that pays well.
2. be able to build a credit score in the 700 area.
3. Save your money so you can have a down payment.
4. Consider the future. If you are having kids, will this one place be a better long term investment with two bedrooms one bath or will the house that needs a little work with a three bedrooms two and a half baths be better? If you are planning on having a child or a lot of people over, make sure you invest in the right home.
5. Get rid of debt!
Making sure you have a game plan is key to the purchase along with the items mentioned above.
Jason
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