Part 2: What First Time Savannah Homebuyers Aren’t Told

Of all the things first time homebuyers in Savannah are told, some that turn out to be pretty important are too often overlooked. Here are four items first time homebuyers will find useful to know:

4.         Remodeling costs more than you think

You’ve found a fixer: your energy is to be applauded. But before you write that offer, if you are one of our Savannah first-time homebuyers, be certain to have penciled out the bottom line cost of bringing the home up to the standard you require to be move-in ready. You may well be able to live with some items that you will fix over time, but in all areas, budget 20% more than your estimate.  

5.         What matters is what the bank’s appraiser thinks the house is worth

Getting a loan approved isn’t as simple as having great credit and a down payment. Your offer also has to pass the bank’s approval process before they will okay the loan.

6. Getting inspected doesn’t mean there won’t be problems

Should you skip the inspection process? Absolutely not. You need to know if the home is structurally sound. But owning a home involves continuing expenses -- and problems can pop up even on Day One of ownership. Make sure you have funds set aside.

7. Buying your first house can be stressful…really stressful!

One of the absolute best pieces of advice I can give is to relax — expect the unexpected! Buying your first house is scary only if you allow it to be. Since it is all but certain that there will be ups and downs, allow the possibility that you may not get any particular house. Veteran homebuyers come to understand the cost of overly emotional involvement — when you do, too, you will be better able to roll with the punches…and to make financially sound decisions.

If you missed the first three items in my list, check back to Part 1 – or just call us! I’ll fill you in on everything Savannah first time homebuyers need to know.

7 Things No One Tells Savannah First Time Homebuyers

First time homebuyers in Savannah are told a lot of things —

“Save your money,” their parents advise.

“Location, location, location!” their friend’s friend cautions.

Reasonable advice, for certain. But there some important elements of the home buying process which a typical Savannah area first time homebuyer doesn’t usually hear. I’ve listed some of the most important ones, in no particular order:

1.                  Mortgage rates you see advertised aren’t usually what you get

The banner ads are everywhere online: “3.2% rates!” “No money down!” But the truth is, mortgage rates vary greatly. The only way you’ll know what rates you actually qualify for is to go through a complete mortgage application including credit pulls and income verification. One more point to consider: online mortgage calculators, while handy, can be deceptive if you do not factor in the real cost of tax, insurance and PMI when you’re looking at an FHA-loan. 

2.                  Every Tiny Bit of Debt Counts

Think that $1400 left on your Visa isn’t going to matter? Think again. Every iota of debt weighs in when your credit is scored. What many first time homebuyers aren’t told is that when you apply for a mortgage, nearly every element of your financial history is going to be analyzed with a fine-toothed comb. All debt will be factored in as the bank figures out how much it is willing to lend. Standards have stiffened, so the earlier you dispose of even small issues, the better.

3.                  Your Choice of Agent Makes All the Difference

Let me guess: your friend’s friend also has an agent to recommend (she carpools with his sister’s next door neighbor). There’s no reason you shouldn’t interview her: maybe that’s the right fit for you. But don’t just sign up with the first agent you find: this is a working relationship that can shape your family’s future. Your agent’s connections, experience, and market knowledge will be key — and can well make the difference between your writing an offer that gets accepted or not.

(Coming Tomorrow: Another 4!)

Three Money-Saving Tips for Your Savannah Mortgage

Your mortgage: you only think about it once a month (if you’re on autopay, maybe not even that often). Why worry about it? If it ain’t broke, don’t fix it, right? 

Wrong!

Like all aspects of your big-picture financial planning, keeping an eye on that mortgage can be an extra wealth-building move. I can point to three reasons why re-evaluating your mortgage could pay dividends:

Down, Down, Down…

Ok, with interest rates continually making headlines, this one might be a no-brainer. But some folks don’t realize just how attainable significant savings may be: a drop of just a single percentage point in the Savannah mortgage rate can make a gigantic difference. A general rule of thumb is that if you can lower your interest rate by a percent or more, it usually makes sense to refinance. It’s certainly worth looking into.

Pay More Sooner (Build Wealth Quicker)

Nobody wants to part with more hard-earned cash than necessary, but extra money out now can wind up saving a lot of greenbacks later. Making just one extra payment a year will have you owning your home free and clear sooner – whereupon those payment dollars become yours!

Sound too painful? It needn’t. See if you can set up bi-weekly payments of half your monthly mortgage amount. You'll be making 26 payments annually: the equivalent of 13 monthly payments! Confirm with your lender that the extra payments go toward principal.

Eye That Equity

If you’ve got a PMI payment, you know that extra insurance doesn’t come cheap. So why make the extra payment a single month longer than necessary? By law, your lender is required to stop charging you PMI after you accrue 22% equity in your home. But in many cases, once you hit 20% equity, simply writing a letter to your lender will prompt them to allow you to stop paying PMI then and there.

For most of us, our home in Savannah is one of the largest investments we’ll ever make. Got a real estate question? We’re here all the time to supply you with friendly help and advice!