Friday, August 4, 2023

Real Estate: Diving into summer with a new home?

By Matt Trudel

Summer finally seems to have arrived and the rain has backed off a little. We all love spending our time outside in Maine while the weather is so nice. Whether the lake or camp is your thing, or maybe it’s hiking or the ocean, this could be the right time for you to consider purchasing a new home.

There are many reasons that people make the decision to purchase their first home. Tired of paying rent, living with roommates, or maybe parents, are just a few possibilities. If you are considering this and are on the fence about it, I would encourage you to do your homework and go for it. This article will provide you with some basic things you will want to do, a few things that you absolutely should not do, and hopefully create some more questions that you can discuss with one or all of the professionals that should be a part of your team for this process.

So who are the professionals that make up this team that I am referring to that are supposed to help you with this process of purchasing a new home?

The first one is pretty obvious, and that is a Realtor to assist you in all facets of this process. Selecting a buyer’s agent is important and not as easy as it may seem. We all know at least 5 to 10 realtors it seems, but sometimes using a friend or family member is not the best choice. Experience, professionalism, confidentiality, and experience are extremely important factors when selecting a Realtor.

I used experience twice because it is that important to have a Realtor who has several years of experience. It can be the difference of having a positive successful transaction or having an absolute nightmare or failure of a transaction.

Confidentiality is important to many people. People’s financial situation, credit worthiness, and personal information are things that many people don’t want their friends and family to know.

Once you have your Realtor selected, they can assist or answer questions about the other professionals to complete your team. Choosing your lender or mortgage broker is another important professional to add to your team.

This will not only get you pre-qualified for your purchase, but it also should provide you with a lot more options that you and your Realtor can use to assist in being successful in the process. Deciding on which type of financing works best for you and provides you with the strongest offer you can present to a seller is a key part in almost every transaction.

There are a lot of programs out there other than just FHA or Rural Development. First responders such as EMT, fire fighters, police, nurses, doctors, and many more, there are lender programs that might offer a better interest rate or provide some additional money toward closing costs for you.

These are all things that you should take into consideration when selecting which type of financing you are going to use.

I mentioned interest rates, and this is worth discussing since interest rates have increased from the all-time record low interest rates we saw for a couple years. Do not let interest rates scare you into not buying a house. Today’s interest rates are still really good in comparison to over the last 15 years.

I don’t believe interest rates will ever get back down to 3 percent again, or at least not in the next 10 years. So put the interest rate aside and if it does go down significantly you can always refinance your home to the lower rate.

Next is the absolutely do not do list. Some of these seem obvious, but you would not believe the number of clients I have spoken to discussing these very things and quite often I have to remind them. Do not make any large purchases at all without discussing them with your team. That means nothing, none, not a one, zero.

Well, what about a cash purchase? No, that depletes your reserves and makes you a weaker buyer. Cars, boats, and other items financed most likely wil hurt your debt-to-income ratio and lower your purchasing power. Do not apply to multiple lenders and have your credit pulled because it can lower your score and cause you to have a higher interest rate.

Do not use your credit cards excessively and run the balances up. The balances need to be below 30 percent and preferably you don’t have credit card debt. Any financial transaction, debit, or credit, over $1,000 you should have a conversation with your team.

It doesn’t mean you can’t do it but you need to be informed about how it may affect you. More than likely, they will give you some advice on the best way to do it if you want to proceed forward. <

This article was written by Matt Trudel, Broker/Owner of Five Star Realty, Windham. 207-939-6971


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