INFO JUST FOR YOU – FIRST TIME BUYERS

Home buying is an exciting process.  You can make sure it stays that way by reviewing the information and tips that we will provide to you.

Your first job is to figure out how much you can and want to spend on your new home. It’s simpler for us to work backwards in the process, starting off with how much you want to spend.  By knowing your budget, we can then determine the areas and types of properties that we should target.  Loan conditions are changing constantly, so it’s best to speak with a mortgage professional before you begin your home search to make sure that we are looking at homes that are in your price range.

A good way to begin this task is to figure out what you want to pay, monthly, for all of your housing-related costs (e.g. mortgage, taxes, maintenance & insurance).  At the same time, try to get a sense of what your maximum tolerable budget is.  These figures will help the lender and us to understand the range of your house-buying budget.

Your mortgage professional will also tell you what interest rate you can get and what loan options may be available to you.  We have a great team of experienced, service-oriented lending professionals that we would be happy to refer you to.  A great loan officer who is experienced and knowledgeable can also teach you techniques for presenting your financing terms in a way that will maximize your chances of winning in a competitive offer situation.

WHY YOU SHOULD CONSIDER BUYING

As of October 2020, the average rent for an apartment in Seattle was over $1,900 per month.  $1,900 per month is also the monthly cost of a 3% mortgage on a ~$550,000 property with 20% down.  The property you own, though, would be eligible for tax deductions on the mortgage interest and property taxes, and would not be subject to the rental market’s pricing fluctuations.

Once you purchase a particular home, much of your housing costs are not exposed to inflation if you use a fixed-rate mortgage for your purchase.

Your property will also accumulate equity.  Equity is simply the difference between the fair market value of your home and the amount remaining on your mortgage.  Over time, equity can be increased in two ways:

    1. The value of your home increases through appreciation, physical improvements, etc.

    2. You pay down the principal on your mortgage.

You can also borrow against the equity of your home.  Many banks state that equity loans can only be used for the property your loan is secured against.  You can consider your home’s equity as a potential funding source for improvements to your home that will increase its value, or for larger maintenance items such as a new roof or a new sewer line.  

Let’s move onto the financing section where we’ll talk more about your options and how the loan process works.