1st Time Homebuyer Seminar ...... Opening Questions. From my very first, "1st Time Homebuyer Seminar" till now, I have started my Seminars by asking a few simple basic questions which serve a very important purpose. These simple opening questions provide me with the information I need to quickly identify the reason(s) why those in attendance are there. A mistake made by some who conduct 1st Time Homebuyer Seminars, is to assume those in attendance are there because they are looking to purchase a home, which is not always the case. They might be there:
- Simply because they are curious about what is involved in purchasing a home.
- They have credit issues, and want to get information on how to go about clearing up those issues.
- While others are ready to start looking for their first home, and just want a little more information before doing so.
So by asking the initial questions below I can quickly identify why they are there, and what I should be emphasizing throughout the Seminar.
The first question is simply to ask, do they really want to own their own home?
- They might not have decided they are ready or really want to purchase a house at this time. It is a big step in their lives, and one that should not be made lightly.
- They may have already decided to purchase, and now want to learn about the process.
- Also by asking this question it helps to break the ice, and gets them to start opening up.
The second question can they afford to purchase a home? In other words, have they considered the costs of purchasing a home? Do they realize they will need money for the following:
- Down payment: How much money do they have to put down on a house, or will they be looking for down payment assistance.
Closing Costs: Most First Time Homebuyers seem to think they only need to have a down payment in order to purchase a home. Many are very surprised to find out there are other cost they will need money for besides the balance of their Down payment. Some of those costs will be:
- Attorney Fees (CT is an Attorney State)
- Title Insurance
- Taxes & Insurance that will be put into an Escrow account
- Prepaid Interest
- Possible points
- Recording Fees.
Up-Front Costs: Are also costs First Time Homebuyers many times have not considered. Cost they will have to pay before the Closing, and are very surprised when they are told they are going to need money for:
- An Application Fee
- Appraisal Fee
- Homeowners Insurance
- Earnest Money (deposit on sales contract)
- Home Inspection.
- Well & Septic Inspections (if applicable)
The third question is, have they considered how much money they can afford for a monthly mortgage payment? This is very different from what they can qualify for. Qualifying for a mortgage, and being comfortable with a monthly mortgage payment, are two very different things. In qualifying them for a mortgage I will look at all their revolving debt, which I will get from their Credit Report. But there are other expenses not on the Credit Report which need to taken into consideration in deciding the amount of a monthly mortgage payment they can really afford. Examples of other expenses which do not show up on their Credit Report are:
- Child Care
- Cell phones
- General House Maintenance
- Church Contributions
A "First Time Homebuyers" can quickly get in over their head, so the more I can bring to their attention at these Seminars, the better equipped they will be to determine how much they really can afford to pay for a mortgage.
Once they have answered these initial questions, I turn the conversation in a more positive and encouraging direction, "The advantages of owning a home". After all I don't want to talk them out of purchasing a home. Owning your own home is the American Dream, so I spend a few minutes going over some of the advantages of owning their own home:
- A place of their own: It is their own house and they can do what ever they want to it, and what they put into it is theirs.
- Stable housing costs: The mortgage payment will always stay the same (if it is a fixed rate loan), unlike renting which can change every year.
- Increase in value: As property values go up so does their equity in the property, and this can far exceed any money they would have put in the bank over the same period of time.
- Tax benefit: Interest payments on a mortgage are tax deductible, and can substantially reduce your tax liability each year.
I could point out more advantages of owning a home but I try to keep it simple. I am not there to overwhelm them, and provide them with information overload.
This concludes the initial part of the Seminar, 1st Time Homebuyer Seminar ...... Opening Questions. From here I then go onto explain the Pre-Approval processes they will need to go through to determine the amount of mortgage they will be able to qualify for, before they begin to look for a house. I will cover this in my next blog 1st Time Homebuyer Seminars ..... Pre-Approval Process.
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Info about the author:
George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or email@example.com