5 mortgage tips
Once you finally get through all the paperwork and research and land the home of your dreams (or at least one you can afford), who the hell wants to throw thousands of dollars into upgrades, fixtures and changes?
No one, of course, but while there are some things you should demand from the seller, there are others you might let slide. Essentially, it's a matter of picking your battles.
Realtor Bob Swain has moderated many a battle in his years as an agent for Patterson-Schwartz Realty. He gave us a rundown of some issues that come up when shopping for a home, and when to buy, when to barter, and when to run.
1. If the paint peels, the tires don't have to. So the paint is chipping inside the house you're considering? No biggie, a gallon bucket costs as little as $23 at any local home improvement store. And as Bob told us, "I had a three bedroom townhouse in Elsmere that we had painted all one color by a painter for $500. That's not a big deal."
2. A side of veggies with your townhouse? In our search, we've seen some overgrown front yards, especially with vacant houses. But even if the weeds and bushes are 10 feet tall, you can look past things like that. "The inside of the house should be your biggest concern, because you're likely going to plant a garden or flowers out front anyway," Bob said.
3. No reason for bitchin' in the kitchen. Good luck finding a dream house with a dream kitchen. Since the kitchen is usually the first room to get remodeled, don't let a crappy one phase you. "Just re-paint the cabinets or change the door pulls for a different look until you have the money to spend," Bob said.
4. If the roof (the roof, the roof) is on fire, then you don't (don't, don't) want to be the buyer. "Structural items that are costly to repair, especially foundation issues, are things you want to get the seller to take care of or you should walk away," Bob said. A new roof can cost a few thousand dollars, depending on the angle and damage, so keep a close eye on the inspector's assessment of the shingles.
5. If the seller is asking more than you can afford, remember it's a buyer's market. You can walk away or threaten to do so at any time. Buyers have much more power than they did just a few years ago. If you're set on a neighborhood, but can't get a seller to come down in price, you have options. "The fringe of a very popular area is a good place to look. You won't be in the house forever, so get as close as you can to the neighborhood you want," Bob said. "Sellers on the fringe might be more likely to negotiate."
PREPARE FOR YOUR MORTGAGE
To understand how the whole mortgage thing works, you're probably going to have to go back to school and become an amateur economist. But you don't have the time, and neither do we, so we asked some professionals.
After chatting with three local mortgage experts, we've got five tips on programs available and things you should know before heading into the finance of your life. Pay attention, because life can be long, especially with a 30-year mortgage.
* Do the math first. Everyone in the business that we spoke to agreed that it's pertinent to find out how much you qualify for (and can afford) before you even go looking. You might take a credit card to the mall to pay for something, but this isn't a coffee maker -- make sure you have the cash saved.
* Your credit is key -- and so is the number 620. Before you even talk to a loan officer or mortgage broker, know your credit score, and pray you're batting above six hundred. A minimum acceptable credit score that most lenders will accept is 620, which will qualify you in most cases for 100 percent financing.
* Bonds. Delaware State Housing Authority bonds. Each year the DSHA makes a ton of public money available for first-time home buyers. However, a borrower's gross family income (for one or two person households) can't exceed $72,100 in New Castle County. The current 30-year fixed rate is 6.05 percent, while 40-year fixed rate is 6.2 percent.
* Be careful of the ARMs. Also known as Adjustable Rate Mortgages, they're a tricky product you need to understand before applying for one. The reason is because, after the initial term of the contract, the interest can (and will) change. And it usually goes up. Equate it to how you feel when your six-month introductory cable deal runs out and your bill goes through the roof. Not fun.
* Meet face to face. Don't consult with a mortgage lender based in Nevada, because they have no idea what rules and laws apply in Delaware, and what you may or may not be entitled. With Wilmington being such a banking hub, staying local when it comes to your lender should be an easy decision.
via Spark Weekly
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