Facebook
X
Pinterest
Copy Link
Knowing When You’re Ready to Buy
Homeownership is a lifestyle choice. Therefore, choosing homeownership isn’t a decision made overnight. The decision often takes careful planning for how the purchase of a home will fit into your life now and in the future. Additionally, the decision will take financial planning for how to pay for the home of your dreams. How will you know if you are ready? Follow along as we explain the fundamentals of preparing for homeownership so that you know when the time is right for you.
When renting…
When renting, you usually don’t have to worry about maintaining the property, making repairs, or remodeling the home. Are you ready to take on those responsibilities as a homeowner? If so, are you ready to be tied down to one place? Renting offers a bit of flexibility because leases are renewed on a regular basis allowing you ease of relocation. As a homeowner you’ll need to spend time and money selling or renting out your home before relocating.
As a renter you never gain any long term savings in the form of home equity. As a homeowner, the longer you are in the home the more equity you can expect to gain. You can get a better idea of why by the explanation in our article, Is It Better to Buy a Home or to Rent One?.
A couple of good questions to ask yourself if you are considering becoming a homeowner are:
If you needed to move in a couple years, would you feel comfortable renting out your home or selling it?
Could it potentially bring in a cash flow?
As a homeowner you are ultimately responsible for paying the mortgage. Are you financially stable enough to not default on your loan?
Most importantly, becoming a homeowner means putting down roots. Are you and your household emotionally ready to make that change and commitment?
If you answered yes to the above questions, you are on your way to homeownership. Let’s dig a little deeper to see if you are financially ready to take the leap:
Do you know how much home you can afford?
There are a lot of factors that play into knowing how much home you can afford. Of course, there is the price of the home, but you must also consider interest rates as they play a significant role in your monthly mortgage payment. For a good demonstration of the effect of interest rates on your monthly mortgage payments check out this article, Rising Mortgage Rates. Furthermore, what many first-time home buyers forget to consider in addition to the down payment and monthly mortgage payments are closing costs, moving expenses, inspection fees, property taxes, and homeowners’ insurance just to name a few. A great agent will connect you with a lender that will walk you through how these will affect your payment and if they pertain to your loan. Don’t have an agent? Connect with us here to get paired with the perfect agent for you. Identifying how much you can afford is not a task to do alone. You must connect with a lender. They will look at your financial position and get you pre-approved for a home.
Are you working to reduce your debt-to-income ratio?
Lenders know that it is not realistic to have no debt. Therefore, lenders are looking to see that you are making progress towards paying down your debt. Demonstrate your plan to get your debt paid off. Your lender can help you determine the best course of action so connect with them sooner rather than later.
Are you prepared for a downpayment?
Lenders recognize 20% down payments as a demonstration of financial stability. 20% down payments decrease the initial risk to the lender and benefits the buyer by not having to pay PMI when they put 20% down. You can read more about those benefits here. However, we know not everyone can afford 20% down, but everyone needs a place to live. Therefore, there are different programs and flexible options that make owning a home attainable even when you do not have funds for a 20% down payment. It is important to talk to your lender to determine which fits your unique needs.
Maybe you already got a pre-approval letter, but you aren’t satisfied with the limits. You have several options. Provide your agent and lender with a clear expectation of your wants and needs. If you aren’t exactly sure what you want, try reading 6 Reasons to Attend Open Houses to solidify your desires. You can use this form to help identify your wants and needs to share with your agent and lender. Once you have a clear list your lender can help create a financial plan to reach your desired goal. Your agent can simultaneously watch the market for homes meeting your criteria and help you understand the dynamics of the local market. Knowing the market can help you understand your purchasing power. Your agent can help you understand the difference between a buyers’ and sellers’ market and help you understand what to expect and how to leverage the market to your advantage.
If you are ready to buy or still unsure, you should begin talking to an agent. If you don’t already have an agent, you are in luck! We have incredible agents and connections with lenders who can guide you through your unique situation and help you know when you are ready to purchase a home. Connect with us here.
State of The Nation’s Housing Explained
Harvard University’s latest edition of The State of the Nation’s Housing has arrived, and Windermere Chief Economist Matthew Gardner is here to break down what the data presented in the report means for the U.S. housing market in 2023 and beyond. Watch this video and if you have further questions you would like to discuss with a local agent call us at 360.675.5953 or connect with us here.
6 Reasons to Attend Open Houses
Some people wonder whether or not they should attend open houses. We believe open houses can be incredibly advantageous for both buyers and sellers. Follow along for 6 reasons why you should be attending open houses whether you are planning to buy or sell.
Get an idea of how your home compares:
If you plan to sell your home, visiting open houses in your neighborhood can give you a good idea of how your home compares to your neighbors. By visiting several homes, you can gauge the pulse on the neighborhood’s market by watching what the homes sold for, how quickly they sold, and how they compared to yours. This information can prepare you for what you can expect your home to sell for and give you a to-do list of things to get done before you list your home. If you have not connected with a real estate professional and would like to, connect with us here so we can recommend some.
Get a clear idea of what you want in a home:
If you are preparing to buy a home, it is a good idea to have a wish list of things you want in a home when you buy. Download our Wishlist Form Here. Fill it out before visiting Open Houses, then fill it out again after you have visited a few. Compare how your desires changed. Attending several Open Houses can give you a clear idea of what you want in a home. Perhaps you thought 1100 sq feet was enough room for you, but after experiencing it in person, you decided 1500 was more realistic for your needs. Or vice versa. Maybe you wanted 2300 sq ft, but after spending time in homes that size, you realized 1900 would be a better fit. You might have strong opinions about specific floor plans, garage sizes, number of bedrooms, or heating options. Find open houses in your area by clicking here.
Get a realistic idea of how much you will spend on a home:
You might have your heart set on a specific neighborhood or features in a home. Attending several Open Houses gives you a realistic idea of how much you will spend on what you want. You might find that you cannot afford everything you want in a home. It is best to first connect with a lender to determine how much you can qualify for with your circumstances. If you need help finding a suitable lender, contact us for recommendations. If you cannot afford everything on your wish list, you either need to refine your wish list or keep saving. A trusted lender can also help you determine which type of loan best fits your needs and help you develop a financial plan. So, connect with a lender as early as possible. You can find a few local to Whidbey listed here.
Imagine your life inside the home:
A recent study determined that roughly half of all home buyers experience buyer’s remorse when purchasing their home. Can you imagine feeling buyer’s remorse after making the biggest purchase of your life? You can avoid this by doing your research ahead of time. Attend Open Houses and refine your wish list till you know precisely what you want and need in a home. Visit several different-sized homes to have a realistic idea of what each square footage looks and feels like. Consider the different layouts and which ones feel most comfortable to you. When you are confident you know exactly what you want in a home, you can quickly and confidently make that decision. Therefore you can communicate effectively to your agent exactly what you are looking for in a home. A good agent will help you finetune your wants and needs and make sure you don’t buy something you don’t truly love. Don’t have an agent? Connect with us and we will pair you with a great one. When you find the perfect home you will know it is the right one for you and will feel confident in the purchase because you have done your research.
Get familiar with the neighborhood:
If your children have grown up and gone off to college, you might not like having a noisy community park up against your property. On the other hand, if you have small children, don’t wait till you have moved in to discover your kids are the only ones on the block. While visiting open houses in the neighborhood, ask the realtors about the neighborhood. Some good questions to ask are:
a. Is there an HOA?
b. What kind of amenities does the neighborhood have to offer?
c. Is there a school nearby?
Find an agent that is a good fit for you:
Whether buying or selling, attending open houses can also allow you to get to know agents in your area for when you are ready. If you don’t already have an agent and would prefer to connect with one, email us here: WhidbeyCommunications@Windermere.com.
We strongly urge you to check out homes in various price points, locations, and styles during this time. You might surprise yourself with what you imagined liking versus what you discover you want and don’t want.
Attending several Open Houses before you get serious about buying might be one of the best pieces of advice. Once you know you are serious about buying and what you are looking for, or if you prefer a more personal experience tour homes that meet your wish list criteria with your Realtor. Don’t have a Realtor? Let us connect you with one. Call us at 360.675.5953.
Click here to find our interactive Open House list for your area. If you have any questions, please don’t hesitate to connect with us.
View this post on Instagram
Real Estate 101
Location, location, location:
Costs and Financing:
Types of Real Estate:
When and How to Ask for Help:
The Importance of Escrow in Real Estate Transactions
Real estate transactions can be complex and involve a considerable amount of money. Whether you are a buyer or a seller, real estate is often your biggest investment. That is why it is important for both buyers and sellers to protect their interests and ensure that the transaction is completed smoothly. This is where escrow comes in.
What is Escrow?
Escrow is a financial arrangement where a third party holds and regulates the payment of funds required for both the buyer(s) and the seller(s) involved in a transaction. Escrow helps ensure that the transaction is completed smoothly and according to the terms agreed upon by both parties. Both the buyer and the seller provide the escrow agent with written instructions. When all conditions have been met, the escrow officer sends the closing papers to the county recording office, where the new deed is recorded. The escrow officer then releases funds to the seller.
How is Escrow Used in Real Estate Transactions?
In a real estate transaction, escrow is used to ensure that the buyer’s funds are securely held until all the terms of the sale, such as the transfer of the property title, have been completed. In addition, the escrow agent may also be responsible for completing tasks such as ordering a title search, obtaining necessary documentation, and disbursing funds according to the instructions of the parties involved in the transaction. During this process you may hear the term title insurance and you might wonder what it is. Title insurance is like a safety net around your property. Sometimes hidden mistakes in previous deeds, mortgages, easements or other recorded documents might give someone else an ownership stake in the property. It is important for you to get Title Insurance to protect you and your home as it will save you time and money in the future if problems arise. You can learn more about it in our “What is title insurance and why is it important?” blog. Read it here.
In conclusion
Escrow is an important tool that helps to protect the interests of both buyers and sellers in a real estate transaction. It ensures that the transaction is completed smoothly and according to the agreed upon terms, and helps to reduce the risk of disputes or issues arising. If you are buying or selling a property, it is important for you to understand the role of escrow and how it can benefit you.
If you are ready to connect with an agent or have any further questions, please don’t hesitate to connect with us today by clicking here. If you are just getting started on your home buying journey, consider reviewing these real estate terms to help you along the way.
Penn Cove Park
Welcome to Penn Cove Park. There is no doubt you will find a home you like here. There is an array of newer and older homes amongst this quiet community on the northern shoreline of Penn Cove off Monroe Landing. The central location between Oak Harbor and Coupeville provides not only more options for educational opportunities but also quick access to all the amenities both cities have to offer.
What sets this neighborhood apart from some of the others you might find on Whidbey Island is that residents not only have access to a private beach, but they also have a boat ramp. During the summer the water is warm enough to swim in because the cove is protected from the strong offshore winds that other water access areas are exposed to, making it likely the warmest beach on Whidbey Island. Not to mention, the incredible views of Penn Cove, gorgeous views of Saratoga Passage and the lovely historic Town of Coupeville. On sunny days you can spot snow covered mountains in the distance and a pod of Orca whales may be playing in the Cove.
One of the major benefits of living here is the short distance to the only Hospital on the island, Whidbey General Hospital. Downtown Coupeville offers quaint restaurants, galleries, shops, and a museum that overlook the cove offering luxurious views making for special trips all year round. Oak Harbor, just north of the neighborhood is home to Naval Air Station Whidbey Island where you will find an array of fast-food restaurants, car washes, and big-name shopping centers. In between the two discover the heart of Whidbey, with family farms like Three Sisters Market, small churches, and one of the very few left in the USA the Blue Fox Drive-in Movies with attractions like arcades, go-carts, and food!
Are you ready to get to know this Whidbey Island neighborhood better? Check it out here.
Have questions? We are happy to help. Connect with us here.
View this post on Instagram
Annual Report 2022
Are you interested in buying or selling, or just wanting to learn more about the market or just Whidbey Island in general? We are here to help! Connect with us here.
What is an Interest Rate Lock?
It is no surprise that you might have questions when buying a home. There is a lot to know. Having a good realtor on your side can help you navigate some of those tough questions. Don’t have a realtor of your own? Contact us here and we will get you connected.
In this article, we will be discussing mortgage loan rate locks and how they are used to help you when you are buying a home.
In a market with frequently changing interest rates, some people worry that their interest rate will change before they get into their homes. Depending on the individual circumstances this could be a realistic fear. It is important to discuss this with your trusted realtor and your lender. However, lenders know you need time to search for your home after you have been pre-approved. A rate lock is implemented to protect your agreed-upon rate for a specific length of time.
Let’s discuss this further.
A rate lock is an agreement between you and your lender guaranteeing a specific interest rate will be provided to you for a specific length of time after the pre-approval. This is called the rate lock period. Your lender will confirm with you your interest rate, the start date, and the date of expiration.
What if interest rates go up before I close on a house?
Rest assured you are locked in at your agreed-upon rate even if interest rates have gone up before you close. But again it depends on the expiration date. You might be wondering how lenders can do this. As soon as your rate is locked, lenders purchase money from their investors for you at your rate to be ready for you to spend it when you find your home. Assuming your loan application is approved (see our “Nervous about getting approved for a home loan?” article) and all the terms and conditions for the approval have been met the money is made available to you at closing regardless of the changes in the market after you had locked in your rate. Lenders do not ask you to pay a higher interest rate just because market rates have shifted upward.
Why you shouldn’t wait to lock your rate even when interest rates are dropping.
Would it be more disappointing to have locked in a rate and find that you have missed a lower rate, or NOT locking in your rate and then having rates increase? Trying to time the market can be a dangerous game. Often the market spikes without warning leaving buyers regretting not locking in lower rates. Don’t forget if rates continue to fall, you can often refinance your loan typically after 120 days. Check your lender’s post-closing refinancing policy and make sure to discuss this with your lender ahead of time.
If you do not have a lender of your own or would like to discuss buying or selling a home, please do not hesitate to connect with us so that we can help you.
Email us at WhidbeyCommunications@windermere.com or call us at 360.675.5953
