Fears and Worries of Home Buyers

Fears and Worries of Home Buyers

Have you, or someone you know, been considering purchasing a home but the associated worries seem to be too overwhelming? Here are a few thoughts that should hopefully help alleviate those concerns.

b2ap3 large one Worried about the associated costs required to purchase a home? Worried that you will not be able to take vacations or go out to dinner or plan for retirement because all of your current savings will be drained? DON'T BE. In this day and age, it is relatively inexpensive to purchase a home. VA loans require no down payment, and FHA loans require only a 3.5% down payment, and there are programs out there now that offer either down payment assistance or even down payment grants! Concerned about your closings costs? DON'T BE! Most savvy real estate professionals can get the Seller to pay your closing costs for you during the negotiation process!

b2ap3 icon twoWorried you might not ever find a home you really like? First and foremost....don't settle, on a mediocre home, or on a mediocre real estate professional. If you work with the right real estate broker, they will take as long as you need until you find the home that is perfect for you. If you are feeling rushed or pressured by a real estate professional to hurry up and buy something, find another real estate professional! You deserve the time, patience, and respect that is needed to help you with perhaps the biggest purchase of your life!

b2ap3 icon threeWorried about buying a home that will have tons of repairs that are found only after you purchase it? Completely legitimate concern, but it can be alleviated two fold. A. Hire a professional home inspector to inspect your home prior to closing. A home inspector's job is to make sure you know every possible thing, both good and bad, about the home. A home inspector can also give you an idea of how much certain bigger repair items might cost so that you can go back to the Seller and ask them to correct the issue(s) before closing. B. Purchase a home warranty that can potentially cover costly home repairs and replacements due to normal wear and tear after you have closed on your new home. (A home warranty is a separate contract that covers repairs and replacements on systems in your home and coverage typically lasts for a one year period).

b2ap3 icon fourWorried that it is cheaper to rent than own? In most areas of the United States, it currently is not, and for Colorado Springs specifically, it definitely is not. If you are fairly certain that you will be in one place for at least three years, it just makes sense to purchase versus rent. Think about it this way: Rent money literally disappears, and you are not able to build ANY equity like you would with owning a home. Rent money pays your landlord's mortgage not your own. Rent money does not allow you vital federal tax deductions that come with owning a home. If in true doubt, use a rent vs. buy calculator to crunch the numbers or contact a local real estate professional for more insight.

Fear of the unknown causes quite a few of us to not make potentially good decisions. It is okay to be afraid, and it is definitely okay to ask questions...a lot of them! I am always here to answer your questions and even the ones that you may not even know that you have...I am ready when YOU are ready!

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Cash Buyers for Homes: Pros and Cons

Cash Buyers for Homes: Pros and Cons

Right now I'm working with a cash buyer, meaning they do not have to get a loan to purchase a home.  Often times cash buyers ask "can I negotiate more since I'm paying cash?"  Here is what I tell them: 

Advice for Cash Buyers

Being a cash buyer is great because you don't have to wait the usual time for a mortgage loan. You can usually close within 2-3 weeks instead of the typical 45 days which loans take to accomplish. So your "power" or leverage is that you can close quicker than most.

But being a cash buyer DOES NOT make you more valuable from a money standpoint. At closing the seller gets paid no matter what, whether you are financing your purchase or bringing cash to the table. They do not get paid more if you pay cash.

Why I Like Working with Cash Buyers

From my perspective a cash buyer is sweet. They can close quickly. There are less hassles without a mortgage involved. And they can choose whether or not to even have an appraisal done. For me, simple real estate transactions are great. 

While sellers may appreciate your ability to close fast, they won't stand to make any more money with you. And...be sure you can verify your funds. Sellers will need to see an account statement or some proof that you really do have the dough!

If you have more questions about buying homes with cash versus taking out a mortgage, feel free to give me a call.

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Low Property Taxes in Colorado

Low Property Taxes in Colorado

I often hear buyers comment on how low our property taxes are here in Colorado as compared to other states. I've heard that in places like New Jersey they are much higher.  But I never knew exactly how much higher. Recently I came across this article on Realtor.com   It's about property taxes and how much they cost in each state. The cost differences are quite shocking. This data is direct from their site:

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Mortgage Interest Rates in 2016

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Everyone is speculating about interest rates. Will they go up in 2016 or will they remain low? A low interest rate allows the home buyer to qualify for a higher priced home. When interest rates go up, buyers do not have as much buying power. Here is an excerpt from an article I recently read on realtor.com:

"Mortgage rates will likely be volatile in 2016. But the recent move by the Federal Reserve to guide interest rates higher should push mortgage rates higher in the new year than the historical lows they have been at for years. The 30-year fixed-rate mortgage will likely end 2016 about 60 basis points higher than today’s level. That level of increase is manageable, as consumers will have multiple tactics to mitigate some of that increase, experts say. However, higher rates will drive monthly payments higher, and, along with that, debt-to-income ratios will also go higher. The markets with the highest home prices will see the effects from the higher rates the most."

I think rates will go up a little this year just because the housing market nationwide is so strong. And usually the Fed raises rates in an up market. Here are today's rates as quoted by one of my favorite local lenders:

 

        Conventional 30 year fixed rate mortgage = 4.125%

        FHA 30 year fixed rate mortgage = 3.75%

        VA 30 year fixed rate mortgage = 4.0%

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Understanding Your Property Taxes

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Will property taxes go up in 2016?   Better yet, just how are property taxes calculated? Here, in Colorado Springs, the El Paso County Assessor re-evaluates the value of homes every two years.   He starts with the current market value of the home. Market Value is based on the most recent comparable sales in the area.

Once market value is determined, he multiplies the current market value by 7.96%, which is the current assessment rate for all residential properties.   MARKET VALUE times 7.96% = ASSESSED VALUE.

 

Once the assessed value is determined, he multiplies that by the current mill levy for the area. And that result is your annual property tax.

The mill levy for your area is dependent on many factors including but not limited to the school district, fire district, water district, library district, your county, and city. These various taxing entities comprise the total mill levy for an area. Taxing entities in one area may be higher than another. For example, the taxes for School District 20 are higher than those of School District 11. Although, the school district is not the only taxing entity in an area, the example gives you some information regarding the various mill levies for El Paso County.

You can appeal the assessed value of your Colorado Springs home, thereby possibly lowering your property taxes. If you choose to do so, remember the El Paso County Assessor will only consider comparable sales for a specific period. That period must fall within the Assessor’s specific collection dates. For this task, I recommend calling your Realtor. As a part of our ongoing service and commitment to you, we can easily provide those comps to help you through the process.

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