Purchasing a Home? DISCOVERY awaits you…

Debb Parker, our guest blogger, has been with Commonfund Mortgage in Syracuse for over 17 years.  Her goal is to educate buyers and help them take advantage of what is out there for them, and she is very passionate about her work!  Debb’s past professional credentials include ten years with New York State, and supervising a home for developmentally disabled children.

Buying a home can be a mixture of feelings — excitement, fear, confusion, anxiety, the list goes on and on. In addition to these many emotions, the home buying process is also about DISCOVERY! This is the perfect time to review your financial portfolio. Making the decision to finance your home should be based on the results of your entire budget analysis, not just the mortgage payment.

Too often people decide what financing option is best for them even before they even find “the house.” They are so driven to the predesignated plan that they forget to reassess based on the home they’ve chosen. Instead of pursuing knowledge from a mortgage professional, they listen to their friends and colleagues for advice. Unfortunately, the advice that is given may have been best for those individuals, but not necessarily for those being advised. As time changes, so do the mortgage products that are available.

Let me give you some examples:

John and Mary purchased a new home that needs a new kitchen and bath. In order to avoid mortgage insurance, they put 20% down and now have minimum savings left. They will close on their new home and incur the costs of the remodeling on charge cards. The result is a high monthly payment and non deductible interest. The better option would have been to put 10% down with lender paid mortgage insurance (which still accomplishes the goal of eliminating paying for the mortgage insurance). This leaves money left over for the improvements. Result: no charge card debt.

Susan qualifies for a home mortgage based on her income to debt ratio. Based on what she qualifies for, the home would not meet her family’s long-term needs. She accepts this as “the way it has to be” and purchases a home that she knows she will outgrow in three years. After that time, she will have to sell and find a larger home. Had she met with a mortgage professional, she would have been given the option of using sellers concessions to help pay for the costs of purchasing. With the cash saved, she could have paid off a monthly debt thereby qualifying for more home. Not only would she have been happier with her purchase, but it is a much more financially sound plan. At current rates, financing an extra $10,000 for closing costs only changes the monthly payment by $47.02 — just a little over a dollar a day. Having that extra $10,000 freed up allows her to pay off debt, which is not tax deductible, has a higher monthly payment obligation, and restricts her from qualifying for a larger home. In addition, being able to buy the home she needs now saves her the costs of buying and selling again three years.

I could give many examples of how shifting of funds can help your financial picture. I encourage you to think outside the box and DISCOVER the many options available to you — Syracuse housing prices and current interest rates make it the perfect time.

If you are looking for an excellent loan officer who will help determine what you are most qualified for, look no further.  Contact Debb at parkerd@commonfundmtg.com or 315-422-2325 Ext 1052.

 

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