The 5 Biggest Questions for First-Time Homebuyers

September 20, 2015 by AJ Smith

It’s only natural for a first-time homebuyer to have questions. For many of us, buying a home is the largest financial decision we make. It’s important to be thoughtful and confident in whatever choices you make. Check out the important questions below to help you prepare for homeownership.

1. Is It Better to Buy or Rent?

The rent vs. buy decision is common among Americans looking to make their next move. Some say that buying is always a better financial choice, but that is not necessarily the case. It really depends on your individual financial situation.

It’s important to ask yourself how long you plan to stay put, how stable your job is, how the monthly costs compare, how the total costs compare, and if you are both financially and emotionally ready. The truth is, there is no clear right or wrong answer. In some cities, and for some people, buying a home makes more sense, but for others, renting may be the better choice.

2. How Much House Can I Afford?

Having a realistic estimate of how much home you can afford will help you gauge your next move much better. You can use online tools to help estimate the total value of a property you can afford, what your mortgage payment and amount are likely to be and what kind of down payment you will be looking at. Your income, credit score, debt ratio and desired location will all play an important part in the calculation. You want to find a home you are happy with without scrambling to live month to month. It’s important to establish your housing budget carefully. (You can check your credit scores for free on Credit.com to see where you stand.)

3. Is It Better to Buy an Existing Home or Build?

Most buyers spend a lot of time and energy either searching for or designing the perfect home. It makes sense, because each buyer typically has a wish list that includes specific needs and wants. Buying an existing home will almost always be faster and more convenient, but does involve numerous steps like viewing homes, making offers, home inspections and closing. Plus, you may have to do work on the home to make it fit your needs. Building a home, on the other hand, ensures you can get exactly what you want (so long as you can afford it). This usually comes with a longer timeframe and heftier price tag.

4. How Do I Find a Lender?

It’s important to do your research when it comes to choosing a lender. You want to find the best offer and also a reliable lender. It’s a good idea to research broadly and then narrow your focus once you find a type of lending environment that makes you most comfortable and offers reasonable rates in your area. You can ask at the bank or credit union where you currently have an account and turn to friends and family members for referrals. Applying to multiple lenders at once can increase your chances of approval at the best possible rate without dragging down your credit score.

5. What Happens at Closing?

Closing is the final step before you become a homeowner. It’s a good idea to know what you are in for during this step. This will be when the title of the home is actually transferred from the seller to the buyer.

Knowing the answers to these five questions can help start you off on your homebuying journey. Next, you can try to find the right neighborhood and home for you. Before you know it, you will be an educated homeowner enjoying the property that fits your personal needs and goals.

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About the Author - AJ Smith is an award-winning journalist with more than a decade of experience in television, radio, newspapers, magazines and online content. She currently serves as the managing editor for SmartAsset. AJ has a passion for meeting new people, sharing stories and helping others. She has degrees from Princeton University and Mississippi State University. AJ and her husband also write and illustrate educational children’s books. More by AJ Smith

3 Questions to Ask Before Buying a Home

by The KCM Crew on January 20, 2015

 

If you are thinking about purchasing a home right now, you are surely getting a lot of advice. Though your friends and family have your best interests at heart, they may not be fully aware of your needs and what is currently happening in real estate. Let’s look at whether or not now is actually a good time for you to buy a home.

 

There are three questions you should ask before purchasing in today’s market:

 

1. Why am I buying a home in the first place?

 

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of the space

 

What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

 

2. Where are home values headed?

 

When looking at future housing values, Home Price Expectation Survey provides a fair assessment. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years.

 

They then average the projections of all 100+ experts into a single number.

 

Here is what the experts projected in the latest survey:

• Home values will appreciate by 4% in 2015.
• The cumulative appreciation will be 23.5% by 2019.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 15.1% by 2019.

 

3. Where are mortgage interest rates headed?

 

A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by an increase in mortgage rates.

 

The Mortgage Bankers Association (MBA), the National Association of Realtors, Fannie Mae and Freddie Mac have all projected that mortgage interest rates will increase by approximately one full percentage over the next twelve months.

 

Bottom Line

 

Only you and your family can know for certain the right time to purchase a home. Answering these questions will help you make that decision.

Harvard: 5 Financial Reasons to Buy a Home

by The KCM Crew on December 2013 in For Buyers

Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. This year he released a new paper on homeownership - The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.
Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available. 

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.” 

2.) You're paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning. 

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for many social and family reasons. It also makes sense financially.

Chicken Little is Wrong: Homeownership Still the American Dream

 

by The KCM Crew on November 4, 2013 in For Buyers

After the harrowing challenges experienced by so many homeowners over the last few years, many housing experts had predicted that the belief in homeownership as a major element of the American Dream would soon die. There is now conclusive evidence that these experts were wrong. As we reported back in September, The Joint Center of Housing Studies at Harvard University completed a study which concluded:

"The long term cultural preference for owning seems to have weathered the recent housing crisis."

Now, a second source recently announced similar results. Fannie Mae just released their National Housing Survey of Delinquent Mortgage Borrowers. The survey asked questions about the value of homeownership to the most sensitive of all groups – those delinquent on their mortgages. Here is what they found:

Of those delinquent borrowers:

• 74% still see homeownership as better than renting when building up wealth
• 71% still see homeownership as better than renting when saving for retirement
• 73% still see homeownership as better than renting for overall financial stability
• 80% still see homeownership as better than renting as an investment plan
• 70% still see homeownership as better than renting for creating an overall tax strategy

Bottom Line

Homeownership has always been and will always be a crucial piece of the American Dream.

Noemi Cardoso
William Raveis Real Estate
Westport MA 02790
Cell: 508-558-1945
www.DistinctiveHomes-NE.com

Experts Comment on the Housing Market

by The KCM Crew on September 2013 - in For Buyers, For Sellers

Rick Judson, chairman of NAHB

 

Responding to the report that over 80% of housing markets are improving:
“While there is still plenty of room for growth, this is an excellent indication of how the housing recovery has begun to take hold across more geographical areas.”

Tim Sloan, Wells Fargo Chief Financial Officer

 

“When you look at any sort of statistics in the demographics in terms of household creation as well as household affordability, they are still very attractive and should drive a continued recovery in the housing business.”

Dr. Alex Villacorta, VP of research and analytics at Clear Capital

 

“With the continued strengthening of home price trends in August, the need for perspective on market activity is even more important…Considering the low tier price segment of the housing market led the recovery, the cooling in this segment will likely transfer through to the broader housing market. That’s not to say the recovery is slated to stall, rather growth patterns are likely to return to more historical rates of growth, between 4.0 percent to 5.0 percent, rather than align with bubble-like growth… At the end of the day, this is still great news for housing.”

Bradley F. Hunter, the chief economist at MetroStudy

 

“We have gone from a situation where five years ago everyone was saying, ‘There are too many lots,’ to today, builders are literally crying on our shoulder saying, ‘There are not enough lots. We can’t find any.”

Jay Brinkmann, Mortgage Bankers Association chief economist

 

“The recovery we’ve seen has been related to the fact that the economy is creating jobs at a steady rate and those jobs do translate into paychecks, some of those paychecks go to pay rentals and others go toward mortgages.”

Noemi Cardoso
William Raveis Real Estate
Local Office. Local Agents. Local Knowledge.
www.DistinctiveHomes-NE.com
Serving MA & RI Coast

Why Do American Families Buy a Home?

by The KCM Crew on September 9, 2013

in For Buyers, Pricing

There is a plethora of opinions voiced by real estate gurus as to why the dream of home ownership is so important to most Americans. However, study after study reveals the same five reasons families decide to buy a home. They…

1. Want a good place to raise children
2. Want a place where their family feels safe
3. Want more living space
4. Want control of that living space
5. Realize that owning makes better financial sense than does renting

(For those who question the validity of  number five after the recent housing crisis, Harvard University just finished a study on the issue)

If you are considering purchasing a home, look at the five reasons mentioned above. If any of them apply to you and your family, perhaps it is time for you to take the plunge. With both prices and interest rates rising, waiting will only increase your monthly cost as we move forward.

Noemi Cardoso
William Raveis Real Estate
www.DistinctiveHomes-NE.com
Noemi@Distinctivehomes-ne.com
 

Harvard: Homeownership Still the American Dream

by The KCM Crew on September 6, 2013 

in For Buyers, For Sellers

A big question facing the real estate industry over the last few years is how the housing crisis would impact the public’s belief in homeownership as a major component of the American Dream. Many felt the tragedy experienced by so many families would force them to reconsider their desire to ever be a homeowner again.

A recent study by the Joint Center for Housing Studies at Harvard University addressed this question. Their paper, Reexamining the Social Benefits of Homeownership after the Housing Crisis, revealed some interesting findings:

Homeownership Still Preferred Over Renting

“Even after the dramatic loss of equity and the high foreclosure rates, the early evidence suggests that people seem to believe that, over the long run, owning is still preferable to renting…The long term cultural preference for owning seems to have weathered the recent housing crisis.”

Americans Still Expect to be Homeowners

“The research on home-buying expectations supports the conclusion that very large percentages of Americans still expect to buy a home at some time in the future.”

Younger Americans More Desirous of Homeownership

“Moreover, the finding that younger renters and owners are more likely than their older counterparts to expect to own bodes well for the future of the housing market.”

Even after one of the most difficult decades in this country’s real estate history, the belief that homeownership is a part of the American Dream still lives on.

Noemi Cardoso
Licensed in MA & RI
William Raveis Real Estate
Noemi@DistinctiveHomes-NE.com
 

Westport MA Real Estate Homes for sale in Wesport

Westport Ma Real Estate Homes for sale in Westport

- August 2013 -

Fall is near....it is time to sell before the Holidays!

Westport MA real estate have increased 75% in August compared to July. We had 14 homes sold in Westport compared to July when 8 homes were Sold in Westport.

SOLD HOMES: The lowest priced house in Westport in the month of June sold for $200,000 which was a Ranch on Meadow Rd. In July the lowest priced home in Westport sold for $135,000.

The Highest priced home in Westport in the month of August sold for $925,000 and it was a Colonial that needed total rehab on Drift Road. Compared to July when the highest price was a Cottage on Drift Road and it sold for $760,000. There were no Condos nor Multi Families homes sold in Westport in the month of June.

 

UNDER AGREEEMNT: There were 17 units Under Agreement/Contingent with  prices varying from $129,900 to $1,175,000.

 

ACTIVE LISTINGS: There are currently 124 Active listing in Westport (based on MLSPIN MA) with prices varying from $129,900 on Charlotte White up to $3,500,000 on Drift Rd, compared to 124 listings in the prior month we have remained stable since July. Five units are condominiums with prices varying from $129,900 to $369,000, and 6 are multi families with prices from $359,000 up to $529,900. There are currently two Short Sales in Westport at  with prices of $129,900 and $245,000 and they are both Under agreement. There are no foreclosure properties in Westport in July.

Single Family Homes Sold in Westport MA - 2013 Average Prices

Average Price	January	February	March	April	May	June
List price p/SqFt	$192	$331	$146	$180	$200	$198
List Price	$462,191	$466,211	$217,275	$352,467	$484,936	$404,567
Sales Price	$441,427	$413,278	$203,787	$333,317	$456,523	$383,167
Sale price p/ SqFt	$184	$290	$137	$169	$190	$186
Days on the Market	323 days	166 days	67 days	116 days	310 days	101 days
Units for Sale	84	84	84	81	107	124

Average Price	July	August	September	October	November	December
List price p/SqFt	$221	$214
List Price	$402,475	$393,820
Sales Price	$381,315	$366,993
Sale price p/ SqFt	$208	$200
Days on the Market	114 days	47 days
Units for Sale	124	124

If you are thinking of selling or buying a home in or around Westport, contact me for a FREE Market Analysis and learn about our marketing plan that will get your home SOLD! 

If you are thinking of buying a home in Westport or surrounding areas please visit www.DistinctiveHomes-NE.com for a free list of homes for sale in Westport and Bristol County MA and RI.

We work with one going in mind, YOURS!

Noemi Cardoso
Local Office. Local Agents. Local Knowledge.
William Raveis Real Estate
911 Main Rd - Westport MA 02790
Cell: 508-558-1945
www.DistinctiveHomes-NE.com
noemi@DistinctiveHomes-NE.com