• About

The Hanley Home Team Blog

~ "ON TOP" Of Your Real Estate Needs!

The Hanley Home Team Blog

Tag Archives: buying a home for the first time

Don’t Give Up on Buying a Home if You’re a Millennial Renter

27 Tuesday Sep 2022

Posted by The Hanley Home Team in Uncategorized

≈ Leave a comment

Tags

buy now, Buying a home, buying a home for the first time, buying a home in Jacksonville, buying your first home, homes for sale in Jacksonville FL, Jacksonville FL Real Estate, Jacksonville Real Estate, millennials, real estate, real estate advice, real estate information, Real Estate Team, real estate tips, rent vs. buy, renter, renters, The best real estate agent in Jacksonville

Almost 25% of Millennials (ages 26-41) claim they plan on renting forever according to this Apartment List article. That’s nearly double the amount since they started their ongoing survey of 31,000 Millennials in 2018.

In the grand scheme of things, 1 in 4 Millennials swearing off homeownership forever isn’t earth-shattering news. To put things in perspective, the highest rate of homeownership ever was 80% in North Dakota back in 1900. But generally speaking, the homeownership rate has hovered in the 65% range nationally for almost 5 decades. Some people will always be renters; homeownership isn’t for everyone. 

There are four main reasons they give for not buying:

  • They feel it’s financially risky (19%)
  • Don’t want the costs of maintaining a home (30%)
  • They like the flexibility renting allows (28%)
  • Can’t afford to buy a house (77%)

Obviously, by far the biggest reason is affordability. It’d be easy to chalk that up to the recent surge in home prices and rising interest rates. It’s legitimate and true. But that’s also been the main reason since well before the current market conditions. Truthfully, affordability is almost always the reason renters give for not buying, regardless of the decade. It’s never an easy financial leap to take.

However, while renting may feel like the easier, more affordable option, over time it’s not. In fact, renting is getting even more expensive. According to this Fortune article, an increasing amount of older adults are struggling to be able to pay rent. They’re constantly in fear of rent hikes that may just get to a point they can’t afford to pay. Then what?

While it’s never an easy financial leap to take, once you take the leap, your housing cost can be kept stable for years to come, and even go down as you pay off your house. Sure, it won’t be easy up front, but think of how it’ll be for you a couple of decades from now. Would you rather have an asset you can sell, or still be paying a landlord an ever-increasing amount of rent with nothing to show for it? 

Sure, prices and rates may seem high right now, but it almost always feels that way relative to the times. There’s always an area and a house you can afford to buy a house in, if you’re qualified for a mortgage. (And if you’re not, it’s worth making an effort to be qualified!) Your first house may not be everything you want or where you ideally would like to live, but it’s a first step toward taking control of being able to afford to live comfortably as you get older. It may seem years away right now, but time has a way of creeping up on you. And the cost of living does, too… 

The Takeaway:

Considering the financial burdens many Millennials have, coupled with rising interest rates and home prices, it’s no surprise that an increasing number of Millennials are saying they’ll never buy a home and remain renters forever. 

But if you can afford to rent, the chances are you can afford to buy. It might not be your dream home, or in the exact neighborhood you’d prefer, but you can buy something. Buy where (and what) you can afford now, so that you have a predictable and controllable cost of living — as well as an asset you can sell — as you grow older.

Let’s discuss your real estate goals. Jennifer Hanley, REALTOR The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2700 HanleyHomeTeam.com
Advertisement

How Time Can Be On Your Side if You’re a First-Time Home Buyer in This Market

07 Thursday Apr 2022

Posted by The Hanley Home Team in Uncategorized

≈ Leave a comment

Tags

Buying a home, buying a home for the first time, first-time homebuyer, homes for sale in Jacksonville FL, Jacksonville FL Real Estate, Jacksonville Real Estate, real estate, real estate advice, real estate information, Real Estate Team, real estate tips, The best real estate agent in Jacksonville

If you’re in the market to buy your first home in this market, it’s probably felt like an uphill battle. There aren’t a lot of houses to choose from, and the minute a house gets listed there are a ton of offers to compete against.

Adding to the stress, now you’re probably worrying about the news that interest rates are going up, and hoping to scoop up a house before rates go up too high and make buying a house more affordable. 

But then there’s the news about pending home sales dropping over the past couple of months, which may sound hopeful to buyers. 

Is there light at the end of the tunnel? Are buyers putting on the brakes and waiting to see if house prices come down due to rates rising? Should you wait and try to time the market?

All understandable questions buyers may be thinking about, but speculating and trying to time the market is a gamble that may not pay off as one would hope. Here’s a few reasons why:

  • Even if interest rates go up, prices may not come down enough to make buying a house cost less.
  • Inventory won’t likely increase enough to outpace demand. That can only be solved by either more houses being built, or more Baby Boomers listing their houses, which hasn’t happened as anticipated.
  • Trying to time the real estate market is almost impossible for even a seasoned real estate investor, let alone an average homebuyer.

So timing may not be the best bet, but time itself can be on your side as a first-time buyer in any market, but especially this one.

Part of the reason why there are so few homes for sale, and pending sales have dropped over the past few months, is due to the fact that many homeowners worry about where they’ll go if they sell their house. Think about your concerns as a first-time buyer having to find a house to begin with, and then hope you can beat out a bunch of other buyers. That concern is even greater for someone who already owns a house. Even if they truly want to move, it can be scary to pull the trigger and list their house because they have legitimate concerns that they won’t be able to find and buy a house.

This is where you, as a first-time buyer, have an advantage. Most sellers would love to have time on their side to look for a home once they get their house under contract. Sure they want as much money as they can get for their house, but time to look for a house can be more valuable than a higher offer another buyer makes. 

The Takeaway:

Rather than put your house hunting on hold and speculating that prices will come down, or more inventory will magically appear, focus on what you have to offer that other buyers can’t offer to a seller—as much time as they need to find a house to buy. 

This doesn’t mean you can get away with a lowball offer against other buyers, but it can give you the upperhand. So consider writing terms into your offers that give the seller as much time as they need to find a house. 

And perhaps your real estate agent can even use your ability to wait as a reason to reach out to their network of past clients and other agents. There’s no guarantee, but he or she might be able to find a seller who hasn’t listed their house because they’re concerned about timing. It could be just the right thing that gets a hesitant homeowner to sell, and gets you a house to buy!

Let’s get creative! Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside HanleyHomeTeam.com 904-515-2479

Many First-Time Home Buyers Are Overlooking a Competitive Edge in 2022

13 Thursday Jan 2022

Posted by The Hanley Home Team in Uncategorized

≈ Leave a comment

Tags

Buying a home, buying a home for the first time, buying your first home, first-time homebuyer, homes for sale in Jacksonville FL, Jacksonville FL Real Estate, Jacksonville Real Estate, My First Home, real estate, real estate advice, real estate information, Real Estate Team, real estate tips, The best real estate agent in Jacksonville

Buying a house was challenging for many buyers in 2021, but especially for first-time buyers. Competition and prices were high, and inventory was low, and while some predictions suggest things will loosen up a bit in 2022, buyers will still need to have an aggressive strategy heading into the new year.

According to this REALTOR Magazine article, first-time buyers are optimistic about their chances in 2022, and many are changing their strategies to increase their odds of success.
The most notable changes in strategy were:

  • Making an offer within 48 hours of seeing a home
  • Offering above asking price
  • Being willing to compete in bidding wars
  • Going over their budget
  • Making offers on houses without even seeing them first

Making offers quickly, being willing to go above asking and compete in bidding wars are all advisable strategies in this market. 

Going over budget on the other hand…well, that depends. If “going over budget” means still within their comfortable financial means, sure! If not, it’s a recipe for future struggle and financial trouble. 

And making offers on houses without seeing them in person first isn’t the worst thing to do given technology, but it isn’t ideal. 

What wasn’t on the list, and would likely make the biggest impact for first-time buyers, was to choose and work with a great real estate agent. Working with a trusted buyers’ agent can enhance any of the above strategies, if not make them unnecessary. Their awareness of the market, perspective, advice, connections, and negotiation skills can often give first-time buyers an edge, yet many first-time buyers don’t put a lot of emphasis on choosing and working with one. 

So, if you’re a first-time buyer looking to edge out competition in 2022, by all means be prepared to do everything on the list other buyers are planning on. But, to truly tip the scales in your favor, make sure you’re teaming up with a buyers’ agent you connect well with and trust.

Need an experienced buyer agent? Give us a call – Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside HanleyHomeTeam.com 904-515-2479 Team@HanleyHomeTeam.com

Can’t Afford a Home? Co-buying Skyrockets

12 Friday Nov 2021

Posted by The Hanley Home Team in Uncategorized

≈ Leave a comment

Tags

Buying a home, buying a home for the first time, co-buying, homes for sale in Jacksonville FL, Jacksonville FL Real Estate, Jacksonville Real Estate, millennials, real estate, real estate advice, real estate information, Real Estate Team, real estate tips, The best real estate agent in Jacksonville, tips for buying a home

OCTOBER 13, 2021

More roommates are committing to long-term relationships and co-buying a home. ATTOM says the number of co-buyers with different last names surged 771% in six years.

SAN FRANCISCO – Millennials are pooling finances with roommates, friends and significant others to buy a home together.

The number of home and condo sales by co-buyers is increasing, according to research from ATTOM Data Solutions. The number of co-buyers with different last names surged by a whopping 771% between 2014 and 2021.

The trend especially took off during the pandemic. From April to June 2020, 11% of buyers purchased as an unmarried couple and 3% as “other” (e.g., roommates), according to data from the National Association of Realtors® (NAR). That’s up from 9% and 2%, respectively, in 2019.

“During the pandemic, people have been renting and they may have wanted more space, and so they looked at, perhaps, their roommate and decided, ‘Let’s go buy a home together,” Jessica Lautz, vice president of demographics and behavioral insights for NAR, told The Wall Street Journal.

But affording a home isn’t easy for a first-time buyer. The median existing-home price for all housing types was $356,700 in August, up nearly 15% from a year earlier.

Besides the higher costs to buy, student loan debt increasingly burdens young adults, hampering their ability to afford a home. Half of the potential homebuyers surveyed this year say they haven’t bought yet because of student debt, according to a report by NAR and Morning Consult. Millennials are the most likely to point to student debt as a top reason for delaying homeownership.

Those with student loan debt are still finding ways to buy, though. In addition to co-buying, for example, they may apply for a mortgage with a co-signer such as a family member to help improve their credit status.

Source: “Millennials Team Up to Fulfill the Dream of Homeownership,” The Wall Street Journal (Oct. 11, 2021) [Log-in required.]

© Copyright 2021 INFORMATION INC., Bethesda, MD (301) 215-4688

Buying Your First Home? Make Sure to Avoid These Common First-Time Homeowner Mistakes

14 Tuesday Sep 2021

Posted by The Hanley Home Team in Uncategorized

≈ Leave a comment

Tags

Buying a home, buying a home for the first time, first-time homebuyer, homes for sale in Jacksonville FL, Jacksonville FL Real Estate, Jacksonville Real Estate, real estate, real estate advice, real estate information, Real Estate Team, real estate tips, The best real estate agent in Jacksonville

Photo by Ketut Subiyanto on Pexels.com

Buying a home for the first time is extremely exciting. But like any new experience, as a first-time homeowner, you don’t know what you don’t know—and that lack of knowledge can lead to frustrating, challenging mistakes.

But what, exactly, are some of the most common mistakes people make after buying their first home?

A recent article from realtor.com outlined some of the most common mistakes made by first-time homeowners, including:

  • Hiring a contractor without researching their background. Hiring the wrong contractor can lead to a lot of wasted time and money, and blindly hiring a contractor is one of the costliest mistakes a new homeowner can make. Before you hire anyone to do a home renovation project (whether that’s remodeling your kitchen, or landscaping your backyard), make sure to do your research, read reviews, and ask to speak to references.
  • Not budgeting for home-related expenses. When you bought your home, you budgeted for the major expenses, like your mortgage. But buying a home can come with a host of new expenses first-time homeowners aren’t used to paying, like homeowner’s insurance, homeowner association (HOA) fees, and monthly utility bills. If you don’t budget for those new expenses, it can put you in the red. When you buy your first home, make sure you’re looking at all the expenses associated with the purchase—and budget accordingly.
  • Putting off routine maintenance. Many first time homeowners don’t realize all the routine maintenance that goes into keeping your home in tip-top shape. And, as such, they let maintenance tasks slide—which can lead to expensive repairs down the road. When you move into your new home, make a checklist of all the maintenance tasks and how often/when they need to be completed—then review the list every month to make sure you’re not forgetting any tasks.

The Takeaway:

There are a lot of mistakes people make after buying their first home. But knowing the common mistakes first-time homeowners make can help you avoid those mistakes—and the headaches, frustration, and expenses that go along with them. Give us a call and let’s avoid those mistakes! Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 HanleyHomeTeam.com

Rent vs Buying – Is The Time Right to Buy?

19 Monday Apr 2021

Posted by The Hanley Home Team in Uncategorized

≈ Leave a comment

Tags

buy now, Buying a home, buying a home for the first time, buying a home in Jacksonville, buying your first home, Jacksonville, Jacksonville Real Estate, real estate, real estate jacksonville fl, Real Estate Team, rent vs. buy, renters

Making the decision to buy a home is a big one—and you want to make sure you’re ready.

But how do you know when you’re ready to make the transition from renting to homeownership?

A recent article from realtor.com outlined key questions to ask yourself when you’re determining whether you should keep renting or make the jump to homeownership, including:

  • Do I have enough savings to cover closing costs? If you’re considering buying a home, chances are, you have enough saved up for a down payment. But before you make the decision to buy, you’ll also need to make sure you have enough saved to cover all the closing costs associated with buying a home (like the appraisal and inspection).
  • How long do I plan to stay in the property? Ultimately, you want buying a home to be a smart investment; you don’t want to lose money. And in order to not lose money on the deal, you typically need to stay put for two to three years—so make sure you’re willing to settle in for at least a few years before you buy.
  • Are you prepared for maintenance? When you rent, your landlord takes care of home maintenance—but when you buy, that responsibility falls to you. Before you make the decision to buy your own home, make sure you’re ready to tackle all the home maintenance projects—and costs—that come with owning property.

The Takeaway:

Bottom line? You want to make sure that, when you buy a home, you’re ready—and asking yourself these questions can help you gauge how prepared you are to make the transition. Let us help you with your decision – Kevin and Jennifer Haley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 HanleyHomeTeam.com

Fed vows to keep rates near zero until inflation tops 2%, likely keeping meager rates 4 to 5 years

21 Monday Sep 2020

Posted by The Hanley Home Team in Uncategorized

≈ Leave a comment

Tags

Buying a home, buying a home for the first time, buying your first home, first-time homebuyer, interest rates, low interest rates, real estate, real estate advice, real estate investing, real estate jacksonville fl, Real Estate Team, Selling a home, selling your home

Paul Davison USA Today Published 2:00 pm ET Sep 16, 2020 Updated 5:17pm ET Sep 16, 2020

The Federal Reserve said Wednesday that it will likely keep its key interest rate near zero until the economy reaches full employment and inflation runs “moderately” above its 2% goal for “some time,” a vow that economists say is likely to keep rates at rock bottom for the next four to five years.

The central bank made the market-friendly commitment sooner than many top economists anticipated and it drove the Dow more than 150 points higher before the market gave back the gains on persistent tech stock jitters. .

The Fed’s assertion is consistent with its new policy framework unveiled last month, which states that officials will no longer preemptively raise rates as unemployment falls to head off a potential spike in inflation. Rather, the Fed will allow inflation to edge above 2% for a time to make up for years of persistently low inflation and to bolster job gains.

The Fed plans to keep its benchmark short-term rate near zero until “labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time,” the Fed said in a statement after a two-day meeting.”

That, the central bank said, will help ensure inflation averages 2% “over time” and the public cam reliably expect 2% price increases. 

“These are powerful commitments that we think will support the full recovery as long s it takes,” Chairman Jerome Powell said at a news conference.

Previously, the Fed said it would maintain near-zero rates “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

The U.S. economy has partially recovered from the coronavirus recession more rapidly than expected, but the Federal Reserve envisions a slog the rest of the way.Get the Coronavirus Watch newsletter in your inbox.

Stay safe and informed with updates on the spread of the coronavirusDelivery: VariesYour Email

“The labor market is recovering but it’s a long way — a long way — from maximum employment,” Powell said.

Besides keeping its benchmark rate near zero, new Fed forecasts indicate it likely will stay there at least through 2023, based on policymakers’ median estimate. That’s a year longer than its previous estimate since the Fed’s forecast horizon was extended. But the promise to keep rates near zero until inflation picks up should maintain rock-bottom rates until mid-2024 or possibly longer, says economist Kathy Bostjancic of Oxford Economics. 

The Fed now predicts the economy will contract by 3.7% this year, below its 6.5% estimate in June, and the 8.4% unemployment rate will fall to 7.6% by year-end. The Fed previously reckoned the jobless rate would end 2020 at 9.3%.

Yet the economy may be at a crossroads. States are allowing shuttered businesses to reopen, putting furloughed employees back to work and boosting growth. But Congress is deadlocked over a new stimulus to restore enhanced federal unemployment benefits and keep struggling small businesses afloat. The number of permanently laid off workers and bankrupt businesses is rising. And the specter of a second wave of the virus this fall looms.   

A look at the Fed’s views on:

Interest rates

All 17 Fed policymakers prefer no hikes from the near-zero federal funds rate through next year and the median projection is for no increases through 2023. But one official believes a quarter-point rate increase will be warranted in 2022 and four think the first move should come in 2023.

Bond purchases

The Fed said its massive bond purchases are now designed partly to juice the economy by lowering long-term interest rates, such as for mortgages, as well as ensure that markets run smoothly. Previously, the Fed said the purchases — of $120 billion a month in Treasury bonds and mortgage-backed securities — were aimed at reviving markets for those assets that virtually came to a halt early in the crisis.

The change eventually could pave the way for the Fed to buy bonds with longer-term maturities to more effectively push down long-term rates.

The economy

Fed officials predict the economy will shrink 3.7% this year, less than their 6.5% forecast in June. But they forecast growth of 4% in 2021, down from their prior 5% estimate, and 3% in 2022.

Gross domestic product plunged at a record 31.7% annual rate in the second quarter, a bit better than the initial 32.9% forecast.

The economy has bounced back faster than expected, largely as a result of stronger consumer spending, Goldman Sachs says. While COVID-19 surges in the South and West led some states to pause or reverse reopening plans, hospitalizations and death tolls have improved recently. IHS Market predicts growth of about 30% in the current quarter.

But Barclays says the recovery is likely to slow in the months ahead, in part because a snap-back in auto production to pre-pandemic levels has played out. Powell noted that many laid-off workers have stopped looking for jobs.

Jobs

Unemployment is projected to fall from the current 8.4% to 7.6% by the end of the year, 5.5% by the end of 2021 and 4.6% by the end of 2022, according Fed officials’ median estimate.

The economy has regained nearly half the 22 million jobs lost in the early days of the pandemic as businesses have reopen but economists say recouping the remainder will be tougher. The number of workers permanently laid off jumped from 2.9 million to 3.4 million in August, indicating some temporary layoffs have become permanent.

Of the 11 million idled workers who have not been called back or found new jobs, Powell said, “Our commitment is not to forget those people.”

Inflation

The Fed estimated its preferred measure of annual inflation will close out 2020 at 1.2%, up from its 0.8% forecast in June, before rising to 1.7% in 2021. A core measure that strips out volatile food and energy items is projected to end the year at 1.5%, above officials’ previous 1% prediction.

Inflation has picked up recently, chiefly because of a surge in used car prices and a partial rebound in apparel prices and air fares that were depressed by the effects of the pandemic.

Even before the crisis, inflation was held down for years by discounted online prices and the globally connected marketplace.  The Fed’s new policy framework aims to juice inflation but economists say there’s no guarantee it will work.

 While modest price increases are generally a good thing, persistently low inflation can lead to deflation, or falling prices, that prompts shoppers to put off purchases.

Curious about buying or selling a home in today’s market? Give us a call and let’s chat! Jennifer and Kevin Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside http://www.HanleyHomeTeam.com

When Should You Stop Renting and Buy Your 1st Home?

30 Thursday Jul 2020

Posted by The Hanley Home Team in #HanleyHomeTeam, #HomeBuyer, #HomeBuyingTips, #HomeOwner, #HomeSeller, #housegoals, #househunting, #RealEstate, Jacksonville, real estate, Uncategorized

≈ Leave a comment

Tags

buy now, Buying a home, buying a home for the first time, buying a home in Jacksonville, buying your first home, first-time homebuyer, real estate, The best real estate agent in Jacksonville

woman using gray laptop computer in kitchen

Photo by LinkedIn Sales Navigator on Pexels.com

This choice often comes down to a financial decision: Can you afford what you want? But that’s not the whole story. There are more things to think about when trying to decide if it’s time to take your first real estate plunge.

Cost-Benefit Analysis is the term for figuring out if something is worthwhile doing or not. When you analyze a situation and decide that the benefits are greater than the cost, then you may want to go forward. Conversely, if the cost exceeds the benefits, you may decide to wait.

Sometimes when you weigh the benefits against the cost, the benefits are higher, but not high enough. In that case, you might want to increase the benefits or lower the cost before taking action. These are exactly the thoughts you should be having as you plan to buy your first home.

To help you weigh the benefits and costs of buying vs. renting, this report offers key elements to think through, including evaluating the monthly payments correctly, estimating home ownership costs, weighing location against price, evaluating purpose and home investment strategy, and improving credit and interest rate to decrease payments. 

The most important factor when thinking about buying is to not “panic buy.” Don’t jump in just because interest rates might rise or prices might rise. Buy when you are ready and don’t let the market dictate your timing.

What are the benefits of renting? 

  • One benefit is living in a property without having to spend great chunks of money to replace the roof or fix the plumbing. 
  • Another benefit is that you may be able to rent a type of home or in a location that you could never afford to buy. 
  • You have no stress or worry about maintenance. That’s the landlord’s job.
  • You can pick up and move without wondering if you can sell your house. 
  • If your income drops, you can rent somewhere less expensive. It’s a pain to move, but you won’t face a foreclosure or fire sale. 
  • If you are late with a payment, you can discuss it with the landlord. 
  • You probably won’t get a serious ding on your credit if you’re a month late. 
  • In many places, renting is the only option because there isn’t enough housing for sale, or the prices are beyond reach for the average mortal.

What are the costs of renting? 

The landlord charges you X amount and as long as you pay that amount, you get to live in that property. The cost is X. But there are other costs:

  • By renting, you lose the opportunity to build equity (the money you gain if you sell the property). So when you move, you move with no money in your pocket.
  • You lose the opportunity to pay off the house and eventually own it outright.
  • You lose the opportunity to put down permanent roots, do what you like to the property, and raise capital by getting a second mortgage or home equity loan.

What are the benefits of owning?

  • Build equity through rising values and making payments. 
  • Pay off the home and eventually have the security of owning outright. 
  • Be able to increase your wealth…by selling and profiting, by renting it to someone else, or by getting a home equity line to use the money in some other way.
  • Put down deep roots in the house and community.
  • Do what you want to the house…paint it orange and pink if you want (as long as you don’t live in a Planned Community or Condominium).

What are the costs of owning?

  • Monthly fixed and variable maintenance costs are significantly higher than renting.
  • Interest on your mortgage loan (which may be a tax deduction, so that may actually be a benefit)
  • Time involved in maintaining a home that would not be involved when renting.
  • Possible falling values making it harder to sell when you want to. 
  • Inability to work with the loan holder when you’re late with a payment.
  • Possibly higher monthly payments than would be with renting.
  • Possibly not being able to live in the community you want because you can’t afford to buy there.

Compare Costs and Benefits 

Here are several questions that will help you decide if it’s time to buy, or if you should keep renting.

What can you REALLY afford to pay each month?

Let’s look at an example. (This example uses US$.)

  • Suppose you feel that you can afford to comfortably pay $1,500/mo. in a mortgage payment. 
  • Now, imagine putting aside a little each month to pay for maintenance and improvement projects (painting, new roof, new kitchen, emergencies, etc). Let’s say 10% per month for homes in decent condition. That’s $150/month, based on your $1,500 comfort level.
  • Now, instead of paying $1,500/mo, you’re really looking at paying $1,500 + $150 = $1,650. Can you afford $1,650? If not, then you need to be looking at a monthly mortgage closer to $1,350.
  • That small difference in monthly payment can mean a difference of $30,000 in your purchase price, so it is important to calculate maintenance costs before buying. 

If you don’t include maintenance costs up front, then the costs will come from somewhere else after you buy—your vacation budget, your new car budget, etc. You could become what’s known as “house poor,” a term that means you have a house, but a lower quality lifestyle.

So before you buy, try to look at you monthly payments realistically, inclusive of your lifestyle goals.

What mortgage would you qualify for?

You may feel comfortable paying $1,500/mo, but the important question is ‘What loan amount will that qualify you for?’

Several factors go into determining what the lender will decide you can pay and what you can buy:

  • Your loan amount is based on your income, debt, and interest rate.
  • Your interest rate is determined based on your credit rating—which is based on your history of paying your debts, as well as the amount of overall debt you carry.
  • The interest rate you are given may mean a $20,000  to $40,000 difference in the price of home you can buy. 

So, although you feel comfortable paying, say $1,500/mo, the mortgage lender might say that based on your income, debt, and credit score, you really are more comfortable paying $1,400/mo.

And that means, instead of getting a mortgage for $239,000, you can only get a mortgage of $219,000.

So work with your mortgage professional, and go through the entire loan application process. Fill out the loan application. Provide the documentation. Yes, it’s arduous. But it’s the only way to get accurate figures, and get the coveted “pre-approval letter” that you need when buying a home.

Why do you really want to own a home?

Here are your choices: 1. Financial reasons.  2. Pride and roots reasons. Of course, it’s both for most people. As a first time buyer, you’re aware that ownership has financial benefits. And you also want to live in a place you love and put down roots.

 Unfortunately, for many home buyers, the price of a home in their desired location is too high for them. That means that first time buyers need to focus on the first choice: buying for financial reasons. 

Look at lower cost alternatives that allow you to build equity and eventually buy up into the area you want to put down roots. Here are a few ideas for first time buyers to make their first home a smart investment:

  • Buy a much smaller home or condominium near the
    area you want to live.
  • Buy a fixer-upper near where you want to live.
  • Buy a home in an area you don’t want to live. After a few years, decide to either keep it, and put a renter in it, perhaps using the equity to buy another home, or sell it and use the cash to move up.

Each choice has its own costs and benefits. With each choice, the goal is to increase equity so that you can sell and have a larger cash down payment on a home in your preferred location. Create a long-range plan. Then work towards that goal by increasing savings, building equity, and improving your income. And always, always work on reducing debt.

Is your rent low enough?

If you’re paying $1,000/mo in a $3,500/mo area, and you have a good landlord, maybe you’re better off investing in other things instead of buying a home. Or perhaps buying an investment home in a cheaper area. It is OK to not own the home you live in, if it makes financial and emotional sense not to. 

But be smart about it. Do the analysis. There are many factors involved in home ownership that may benefit you, such as rising values, interest rate deductions, and the potential to control an asset.

Using a Mortgage Calculator

Mortgage calculators should be used as guidelines only, as just another data point. Once you’re really serious about buying, the only truly accurate way to know what you can afford and what your payments will be is to go through a full pre-approval process with a mortgage professional. 

But until then, mortgage calculators can be a useful tool to help you see how adjustments in down payment, interest rate, and income can affect purchase power.  Just be dead sure that the estimate you get is includes Principle, Interest, Taxes, Insurance, and Extras charged on the loan, such as Private Mortgage Insurance. If you leave out any of these costs, you will be surprised when your mortgage professional shows you a figure lower than you thought.

 Calculators come in several varieties. Here are four calculator suggestions you can look up on Google. Use a calculator designed for your country.

1. House Price, Based on Payment

2. Payment, Based on House Price

3. Payment, Based on Income

4. Rent vs. Buy

Final word

As a first time buyer, you are swept up in the excitement of buying—the dream of owning. You look at homes online and imagine putting in your own garden, painting the baby’s room, and decorating the way you want. 

But you are smart. You know you’re making a financial decision, not simply an emotional one. You know the factors that go into deciding when to stop renting and buy a first home are complex.

There are no simple answers. But we’d like to leave you with this final word:

Don’t let fear of buying stop you from buying a home. There are plenty of professionals out there who can guide you through this decision and help you make a sound financial choice. If not me, then find a real estate consultant you trust to sit down with you and discuss the ideas presented in this report. Work with a mortgage professional to get accurate figures. 

We want you to know that I’m always available to you—or your friends and family—for a home buying consultation. And we want you to know that we’ll spend whatever time you need to answer your questions so you can make the right decision in your own time.

 Call to arrange a consultation appointment – Simply call 904-515-2479 OR email Team@HanleyHomeTeam.com Thank you! Kevin and Jennifer Hanley, REALTORS Keller Williams Realty Atlantic Partners Southside

Townhouse vs. Condo, which should you buy?

30 Monday Dec 2019

Posted by The Hanley Home Team in #Condoliving, #HanleyHomeTeam, #HomeBuyer, #HomeBuyingTips, #housegoals, #househunting, #Jacksonville, #JacksonvilleFL, #KellerWilliams, #Movingday, #RealEstate, #Townhouse

≈ Leave a comment

Tags

advice, buying a home for the first time, condo living, Florida, real estate

opened window

Photo by Sam Johnson 

Whether it’s your first time buying or you just want to purchase something smaller, townhouses and condos are both great options. Check out the differences between the two to help aid you in your search!

Condominiums

Condominiums are similar to apartments in that you purchase an individual unit inside of a larger building, but not the property it sits on. This generally includes access to the building’s amenities, such as the clubhouse, pool, and gym. However, condo owners are not responsible for the upkeep and repair of these common areas. Because of the number of shared spaces, living in a condo often allows for meeting new people and building a strong sense of community. There is a fairly similar vetting process for loan approval as for a full-sized home; however, the lender will also look at the health of the condo association.

Townhouses

Those who purchase a townhome are generally purchasing the complete unit, both inside and out, including the land it sits on. This might also include the driveway, yard, or roof. Traditionally, these units are two- or three-stories tall and may also include common areas like pools and parks. Townhome owners pay a fee to a homeowners association every month and the loan process is the same as buying a full-sized home.

Which is the best choice?

Both townhomes and condos offer less maintenance than a traditional home and generally offer great shared areas. Your decision ultimately comes down to you and your family’s needs and wants. Things you’ll want to take into consideration include location, lifestyle, family growth, and price.

Give us a call today; we are happy to lead you in the right direction.

Kevin and Jennifer Hanley, REALTORS Keller Williams Realty Atlantic Partners Southside 904-515-2479 http://www.HanleyHomeTeam.com


An Increasing Surge of Wire Scams & Frauds Across the Real Estate Industry: How can you Protect yourself?

05 Saturday Jan 2019

Posted by The Hanley Home Team in Uncategorized

≈ Leave a comment

Tags

buying a home for the first time, cyber crime, cybercrime, fraud, home search, Jacksonville FL Real Estate, Jacksonville Real Estate, phishing, protect your money, real estate, real estate fraud, real estate wire fraud, staying safe, wire fraud

full frame shot of eye

Photo by Vladislav Reshetnyak on Pexels.com

The lucrative nature of real estate investments and transactions makes them vulnerable to the risk of fraud, robbery, phishing and cybercrimes. As opposed to bank robberies and burglaries, wire net frauds and cyber robberies don’t have a limit to the amount of money that can be looted. 

Wire fraud in the real estate industry appears to be the fastest growing amongst all cybercrimes prevalent across the US. In 2017, the authorities reported losses more than $1.4 billion while complaints were registered by 301,580 individuals and firms. Moreover, statistics reveal that more than 9,600 investors and renters were looted of $56 million in the real estate industry last year. 

So, how does a real estate fraud actually occur? 

Basically, the fraudsters and crooks conduct fake real estate transactions by adopting the identity of a real estate agent from a reputable firm or someone related to the agent handling the purchase. The fraudsters forge the identity, email and other important details to create a highly authentic and credible image that can be easily trusted by the buyer or organization. After posing as a credible agent, they scam the buyers with fallacious emails and instructions of wire to a bank account, which belongs to the fraudster. 

Earlier in June, the federal authorities have launched a coordinated law enforcement initiative, WireWire, to take down all BEC schemes that attempt to intercept and hijack wire transfers. In a short period of 6 months, this effort has managed to make 74 arrests, and recovered $14 million from fraudulent wire transfers. However, the risk of being a victim is still looming high above the buyer’s head. 

How can you protect yourself? 

Reports from the FBI reveal that business email scams and compromises have accumulated loss of over $12 billion and the numbers keep growing with every passing day. It is a common practice for fraudsters to hack the buyer’s email account and monitor all the correspondence taking between the buyers and real estate agents. 

The scammers wait until the two parties head towards the transaction, and at the very last moment, they contact the buyer with fake emails to make it appear like the agent is using a different account to ask for a money to be wired to another account. Fraudsters can also hack the email accounts of real estate agents and professionals. So basically, not only your money and your investment are at stake, but more importantly, your personal identity and your personal/financial information linked with your email account are also at risk. 

These wire transfers amount up to a great deal of money, and personal identities and information are also valuable for such scammers. It is important for buyers and real estate agents to adopt a more secure way to communicate and conduct business transactions. Most important, email accounts should be password protected. It is also important to make sure you verify all emails that ask you to wire funds or pay any kind of amount. Be sure to verify all the details and sudden changes by contact your real estate firm or agent on a verified number. 

Have any questions or are you ready to start your new home search in 2019?  Give us a call today!  Kevin and Jennifer Hanley, REALTORS Keller Williams Realty Atlantic Partners Southside 904-515-2479 http://www.HanleyHomeTeam.com

← Older posts

Subscribe

  • Entries (RSS)
  • Comments (RSS)

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • August 2018
  • July 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012

Categories

  • #BedroomDecor
  • #buyandhold
  • #Condoliving
  • #DIY
  • #Forrent
  • #HanleyHomeTeam
  • #HOA
  • #HomeBuyer
  • #HomeBuyingTips
  • #HomeOwner
  • #HomeSeller
  • #housegoals
  • #househunting
  • #HurricaneSeason
  • #Jacksonville
  • #JacksonvilleFL
  • #KellerWilliams
  • #Movingday
  • #Passiveincome
  • #Quaratine
  • #RealEstate
  • #Refinance
  • #sellingyourhome
  • #summer
  • #Townhouse
  • #yardtips
  • #yardwork
  • DIY
  • Jacksonville
  • real estate
  • Summer Yard
  • TIPS, HACKS
  • Uncategorized

Meta

  • Register
  • Log in

Blog at WordPress.com.

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy
  • Follow Following
    • The Hanley Home Team Blog
    • Join 114 other followers
    • Already have a WordPress.com account? Log in now.
    • The Hanley Home Team Blog
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar
 

Loading Comments...