St Augustine, St Johns County Real Estate & Home Staging

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Choose a Payment You're Comfortable With, not What You're Approved For

Don't be confused by the amount a bank will lend you. Deciding what you can afford is something you will need to determine by looking at your own lifestyle. While you may not have much in the way of debt, and as a result qualify for a higher amount, think about what you've been doing with the extra money currently. 

Read more on buying a home in Jacksonville

Have you been saving money for a downpayment? Do you want to stop saving that amount of money in order to put it toward a home? What about repairs, children's college funds, or future retirement? 

Will you still have the money to travel, pay for private school, or spend money on other expenses that don't come up on your credit reports? 

Forget about what you can be pre-approved for.  Figure out what you are comfortable with in your budget.  Don't get sucked into a higher priced home just because some banker says that they will loan you the money for it. Only you can decide how much money you choose to spend on housing.

You really need to sit down and draft a budget.  It's not what most like to do but you need to plan ahead and set yourself up in a situation that works for the money you have coming in.  Otherwise you are setting yourself for financial failure.

Estimate utilities, taxes, insurance, maintenance.  You need to fund a reserve fund for when the big items need replacing.  Many think that by buying a single family home instead of a condo that they can avoid those costly monthly condo association fees.  Guess what?  Those fees aren't some profit center for some business.  They are the cost of maintaining real estate that is shared among all the owners in that community. Those costs can be ignored if you own your own individual house but those costs don't magically disappear.  Real estate is an asset that depreciates over time unless you keep sinking money into it to maintain it.  Look at what happens to those homes that sit vacant during foreclosure.  One small leak that doesn't get fixed in a timely manner can destroy a house. Prepare for it.  Sooner or later the roof will leak and the AC will breakdown.

While you are focusing on your finances, are you paying too much on car insurance?

Geico is right.  You might be able to save 15% with a 10 minute phone call. But I've found that Geico isn't always the cheapest.  I recommend you give my insurance broker a call.  She has access to many different companies and can shop for the best rates for your particular situation.  She saved me more than Geico could.  All State and State Farm never are able to get close to what she finds for me.  Give Tricia Harris a call

 at 770-973-4000 ext. 28.  She's with Phoenix Associtates.  She knows her stuff and will not only save you money but will make sure you have the proper coverage. 

How about life insurance?  Are you getting the best prices for the coverage that you need?  I use a broker who shops for the best plans for me. 

 Call Maury Shapiro at 404-310-1327.  He also knows his stuff and won't try to sell you stuff that you don't need.  He does the same thing that SelectQuote does.  He shops a lot of companies and finds the one that matches your needs the best at the best price.  Just because a company has great rates for a young guy doesn't mean their rates are good across the board.  Some companies go after specific market segments and price their products accordingly.

After you get you financial house in order, then it's time to get a pre-approval letter so you can go out shopping for a house.

Do it now.  Don't wait until you see a home you really like.  To be taken seriously when submitting an offer, a pre-approval letter is just expected upfront. Most bank foreclosures won't even consider an offer without a pre-approval letter or statement showing proof of funds.

A lender can usually get you approved in about 10 minutes over the phone.  They pull your credit and ask you about your income and assets.  It's not a big deal.

You aren't locked in to that specific lender.  You can make that decision during the due diligence period after you have a binding contract.  So don't worry about getting locked into someone you don't know much about yet. 

Tell the loan officer your specific situation.  The details matter. Sometimes it gets a little tricky when you are starting a new job.  You can't get the loan until you receive your first paycheck.

If you will be renting out your previous home, sometimes you need to have a signed lease in hand before they will lend you money for your new home.

The logistics are very important to avoid last minute surprises. 

Know exactly what documents you will need if you own a business instead of being a W-2 employee.  Sometimes it's more than just two years of tax returns.

How much money will you need up front?  Escrows for taxes vary depending on what month you close. What day of the month you close on will impact how much prepaid interest you will pay at closing.  It also determines when you first payment will be due.  If you close on September 29th your first payment will be November 1st but if you close on October 2nd your first payment will be December 1st.  But in the latter case you will prepay October's interest upfront at closing.

If you are shopping for the best rates, just make sure you are comparing apples with apples.  I would get quotes at the same time for a specific interest rate and then compare the costs shown on the good faith estimates that they send you.  Make sure the day of the month for the closing is the same for all of them and also that the estimates for items such as insurance and taxes and attorney fees are the same.  You just want to compare what their specific lender related fees are.  All the other things are irrelevant to the decison on who is giving you the best deal.  So be careful and know where the bottom line numbers are coming from.

Three loan officers that I recommend are:

Natashia Bush Bush
Natashia Bush
Prime Lending
770-241-5029
natashia.bush@primelending.com


Craig Bland
Brand Mortgage
678-234-0545


Cameron    Stevens
Cameron Stevens
Bank of North Georgia
404-966-2135

Pick someone you feel comfortable with and then get started.  I don't benefit from recommending these people other than the fact that I know they are very competent and will be able to get the job done.  They also offer many different programs and very competitive rates.  The biggest thing is that they are very honest and upfront about everything.  They aren't going to mislead you and keep important details in the fine print.  Don't get sucked in with some nice sales gimmick and then find out that it isn't what you expected.

One last question I get asked a lot.  How much should I have the pre-approval letter state that I am approved for?  Some are afraid to show that they are approved for much more than the price of the home they are interested in.  They don't want the seller to think that they can afford to pay more than what they offer.  They might have a point but I would ask you to put yourself in the shoes of the seller.

If you had two offers for $300,000. Buyer one showed a pre-approval letter for $300,000 but Buyer two showed a pre-approval letter for $500,000. Who would you consider was the stronger buyer who you would want to do business with?  Personally, I would go with the buyer pre-approved for $500,000.  I would think that the other buyer was at the edge and any small change in the deal could end it for them.  But think that through and decide for yourself.

My next article is how to go about researching different areas around Atlanta, especially if you are being relocated and you don't know much about Atlanta.

Tim Maitski has been a full time real estate agent in the Atlanta area since 1999. 

If you are looking for Atlanta real estate, a good place to start is HomeAtlanta.com 

Tim has built this site to provide a lot of information for buyers and sellers.

  • No registration home search tool for Georgia MLS
  • Market stats for sales in 37 market areas going back 10 years
  • Property tax calculator for over 30 cities and counties
  • Helpful, informative videos explaining many questions about real estate

 

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 Author Bio: Melissa Marro, Home Staging Industry leader, Realtor, and entrepreneur offers a unique perspective on New Home Construction, Resale Residential Real Estate, and Home Staging

For more information on buying or selling in the Fleming Island, Orange Park, or Jacksonville, area, visit StageListSellNEFL.com or call Melissa Marro (marro.melissa at gmail.com), Keller Williams First Coast Realty, for more information (904-466-2093).

 

Comment balloon 2 commentsMelissa Marro • September 15 2012 10:44AM
Choose a Payment You're Comfortable With, not What You're Approved For
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