Real Estate Information Archive

Blog

Displaying blog entries 1-3 of 3

What You Want In A Home VS What You Need

by Mark Rieger, Mark Rieger Realty

I believe homeownership is the American Dream. When you Buy a home, though, it is important to understand the difference between what you want in a home and what you need. How can you tell the difference? 

The first thing I’d advise is pulling out a pen and a piece of paper and writing down two columns. In the left-hand column, list all of the things that you have today. In the right-hand column, list all the things you want. From left to right, your list should expand. This will be the criteria you will use to shop for a new home. 

Whatever amenities you end up listing in the right-hand column, it’s important to keep in mind that you may not get all of them in this next purchase. If your new home doesn’t have all the amenities that you want, I would strongly encourage that you start looking for ways to save money so that somewhere down the line you can procure them. 

I often see people make upgrades to their home solely as part of their strategy for selling it. This is a mistake—you’re spending money that you don’t get a dollar-for-dollar return on. If you’re making upgrades, do it for yourself first. Reap the benefits of how it contributes to the home’s sale later. 

If you have any questions you’d like answered, just shoot me an email or give me a call. I’d love to help in any way I can!

Biggest Real Estate Regrets

by Mark Rieger, Mark Rieger Realty

Real Estate regret happens. In fact, some studies show that it can happen to almost half of all homebuyers. Real estate regret can have long-term consequences, so it’s important to know what some of the biggest regrets you may have as a homebuyer may be and how to take precautions to avoid them.

 

1. House is too small. This tends to be the biggest regret many homebuyers have. If a house is too large, you can generally find ways to utilize additional space. However, if your home is too small, you will feel cramped, and things may look or feel cluttered. Buying a house that is too small is uncomfortable and frustrating. Avoid this regret by planning ahead – meaning, look into your future as much as possible over the next 10 years. Who will live in the home at this time? Will there be children – or more children - by then? Will you want to entertain or have the ability to accommodate overnight guests? What kind of spaces will you need (i.e. a gym, craft area, theater room, guest room)? Buy a home that will not just accommodate your lifestyle now but one that will accommodate you in 10 years.

2. Having insufficient information before buying. Many of the hundreds of questions you may ask are easily answered. However, some are not. Before you attend the closing, make sure you’ve asked every question you can think to ask, then ask your real estate agent, friends, and family members what questions you might be forgetting. Most of the information you need about the home is at your disposal. While it might take a little extra work, it is worth not having the regret. Attend the home inspection, and find out all you can about the property itself, the neighborhood, the Homeowners Association. There is so much information out there, and you don’t want to be stuck with insufficient information about a home you’ve already purchased.

3. Premature buying. Everyone is telling you that it’s a “buyer’s market.” You know the interest rates are low. You’ve found the perfect house that fits your needs and wants. So you should Buy now, right? Not necessarily. Buying a home before you are truly financially ready will cause serious, long-term regrets. If you haven’t saved up as much as you need, if you still have a lot of debt to pay off, if your job isn’t as secure as it should be, or if you are going to be “house poor,” reconsider purchasing a home, regardless of what the market is doing. Also, don’t rely on a third party, like a lender, to tell you how much you can afford. Sit down and thoroughly run through your own personal financial numbers. If you purchase a home before you are financially ready, you will inevitably run into real estate regret.

If you have any home buying questions, or any real estate questions in general, please feel free to let me know. I will be happy to help.

The APR Explained

by Mark Rieger, Duke Warner Realty
 

Many of you have heard the term APR (Actual Percentage Rate) when buying a new home, but not everyone actually knows what APR means. APR is more comprehensive than the interest rate that is generally quoted. It takes into account not only the points that you paid to “Buy down” the nominal interest rate but also any additional upfront costs (such as closing costs, origination fees, etc.) that you paid. 

Here’s how APR is calculated: First, the nominal interest rate, loan amount, and loan duration are used to determine the actual monthly payment that you will be expected to remit to your lender every month. Then, the loan amount is increased by the additional upfront costs, and the actual interest rate (APR) can be calculated. Because your loan size has been inflated by the closing costs for the purposes of this calculation, your APR will always be higher than your interest rate.

You can use the APR to compare two loans that have different fixed interest rates and closing costs/points but are otherwise identical.

You cannot use APR to compare a variable rate loan with a fixed rate loan because the variable rate used in the calculation will, in reality, fluctuate over time. In addition, you can’t use APR to compare loans of different duration, since allocating the closing costs over a longer time period (30 years instead of 15 years) will automatically reduce the APR. Finally, you can’t use it to compare a cash-out refinancing with a second mortgage because the APR calculation doesn’t take into account your existing loan. 

Having a better understanding of the APR can help you compare two loans that are identical in nearly every respect except for the interest rate and points.

If you need more information, or if you are looking to either Buy or Sell real estate in the Central Oregon area, please let me know. I am here to help!

Displaying blog entries 1-3 of 3

Syndication

Categories

Archives