Making the Most of Your Real Estate Agent's Expertise

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Making the Most of Your Real Estate Agent's Expertise

Buying a new home is an exciting experience, but there is a lot that has to be considered if you want to make sure that your investment is a solid one. For example, while it isn’t required, it is a good idea to have your real estate agent hire an independent inspector to have prospective homes personally inspected for safety and condition before making an offer. Learning how your real estate agent can best help you before actually hiring an agent will ensure that the person you work with has the experience and ideas needed to get the results that you want. On this website, you can expect to find out how to find a great real estate agent and how you can best tap into the talents.

Four Benefits Of Going Overboard Your Down Payment

You've probably heard stories of people who managed to get home loans while only paying 3% down payment. That may have been what worked for them at the time (and may have been the only way they were able to buy a home), but that doesn't necessarily make it right for you. In fact, the more you can save up for your down payment ahead of time, the better time you're likely to have. Here are four reasons why.

1. A bigger down payment can get you a smaller mortgage

Mortgages are usually set for a period of time, such as ten years or thirty years. If you pay an extra $10,000 up front, you'll have a smaller mortgage amount to spread out over those years, meaning that your monthly payment will be lower. This will give you more leeway to budget monthly income for things like HOA fees, home improvement and repairs, and so on. 

2. A bigger down payment can save you thousands of dollars in interest and loan fees and mortgage insurance

Mortgage insurance is likely to be required if you're paying less than one-fifth of the total (20%) up front. And it's not a one-time thing; it's a payment you make monthly, which increases your expenses and reduces the amount you can put towards home improvement. In addition, this payment doesn't go toward your loan at all, so putting yourself in this position is kind of a waste of money if there's any way you could muster a larger down payment to begin with.

3. A bigger down payment can help you get a loan with mediocre credit history

If you're unsure whether your potential lenders will look on you favorably, offering a big down payment can give you a boost. This is because it increases the amount of money the lender is sure to get; even if you default and they have to foreclose and sell the home at a loss, they still get to keep your down payment. The larger your down payment is compared to the value of the home, the less likely the lenders are to lose money on a foreclosure (even though foreclosed homes tend to sell way under market value).

4. A bigger down payment can give you a better chance of outbidding other potential buyers

Because lenders will look on you more favorably, offering a big down payment can make you look better than another buyer, so if you're submitting a bid and you're worried that someone else might outbid you, this could be the way to overcome that disparity. Getting a bigger down payment now can sometimes even outweigh the offer of slightly more money later.

These four benefits show how saving up for a big down payment, if you have the wherewithal to do so, can really be a profitable endeavor. Keep these in mind when looking for a home for sale.