26 January 2007

advice from one alumni to another

more advice on buying my very own home: It's very, very normal to feel anxious or intimidated about making the commitment to buy your first home. In my experience, it's actually better to have those feelings now, so that you can educate yourself about the process and move forward confidently. They always arise at some point during the process and it's good that they're coming up before you make a commitment to anything one way or another. Pre-buying jitters are always preferable to post-buying remorse. :)

It doesn't sound like you'll have a problem at all with getting good financing, which is always the first major hurdle for first time buyers. As far as waiting vesus buying sooner, it really just depends on what you want. Interest rates are great right now (they'll only get better if you have some money to put down on a property - although 100% financing is still pretty easy to get if you have good credit and an established job) -there's really no telling for certain if they'll drop significantly again within the next year. They have been holding pretty steady (a little up, a little down) for the last year or so. If you do end up buying sooner rather than later, you also always have the option of refinancing after a drop to get an improved rate.

It's much more of a buyer's market right now than it has been within the last two years. Fair Market Value (the selling price of a home) is basically determined by what a given buyer will pay and what a given seller will accept. Things are tending to stay on the market for a bit longer now, which gives the buyers more power during the negotiation process. However, the median value of homes went up 14% during the last year, so if you do decide to wait, there's always a chance that you'll end up paying a bit more.

I have to disagree with the comment on your blog about getting financing through a bank. Typically, banks can get better deals on refinancing or HELOCS (home equity lines of credit), but when you're getting your first mortgage loan, a mortgage broker has access to a lot of different loan programs through a number of different lenders, whereas a bank is typically the lender when you go through them, so they can't pull as many strings to get you a better interest rate. Just my two cents.

Sorry if I'm overloading you! As you can probably tell, I kind of love this stuff. Let me know if you have any more questions. I'd be happy to meet up with you and discuss as well (even if the meeting is purely informational for you - I'm very low key). Or II can answer questions on email, if you can put up with my long-windedness! :)


upinthecloudsnat said...

i thought he was kidding but i just got a voice mail message from stephen. hey natalie, i'm heading up to DC (from somewhere, NC) to participate in tomorrows' march. http://newmania.allmypeople.com/?p=148 -- everyone should march at least once in there life. i marched in NY during the Republic Convention. it was quite an experience. holding signs with hundreds of thousands of other humans carrying signs. i felt like an ant marching thru a big city hoping to make a point. the point was 'don't re-elect bush.' but he was re-elected and tomorrows' march is all about getting our men and women back home. end the occupation! good luck my friend. be safe!

Anonymous said...

Here's the other side of getting lending through a bank and establishing a relationship with a bank -- if you ever are late on a payment or lose your job or find yourself in hard times, an anonymous lender, who doesn't know you from Adam, isn't going to give two cents who you are or how earnestly you intent to repay your loan. They are likely quicker to foreclose than a bank who knows your face. Even if your interest rate is higher at a bank, you are getting local service and a likely second chance should you not be able to meet your payments. It depends on the bank. Also, from an attorney's point of view, nationwide lenders can really get you in closing costs. A mortgage broker is going to cost at least $1500 in finders fees or mortgagee fees, and then there might be two more entities . . . the costs really add up. If you go straight to the bank, you save on the front end, though you may pay a higher interest rate. Personally, I'd much rather know where my money is coming from than putting such a large amount in the hands of a faceless lender.


upinthecloudsnat said...

my landlord is basically letting me live in my apartment until he sells it. who knows when that will be but he indicated that if he does sell, he'll provide me with 2 months notice to vacate... OR he wants to work out a deal with me on the condo? hmmmm....