Are You Terrified to Buy a House? Of the Mortgage Process?
Are you waking up at 3am because you can’t shut your mind off? You may be feeling anxious and can’t fall back asleep… but what is it that keeps tiptoeing around in your brain? Ah ha!… it’s the local real estate listings! It’s that house in your dream neighborhood you keep thinking about!
You’d love to feel the freedom of owning your own home, but the whole process seems daunting and unattainable. You are afraid to even try. Well, we get it. It is work to get all your paperwork together and then you get your hopes up. And then… rejection. The purchase of a home is a life-changing event, and you’re scared of failure.
You know, your fears are common among first time homebuyers. But they just may be figments of your imagination. You’ll never know unless you try. So, take this journey with me and let’s tackle some of the most common fears that paralyze first time homebuyers.
Fear No. 1
‘I’m afraid I can’t afford the home of my dreams’- you start with the curiosity as to what kind of homes are selling in the price you think you can afford in your dream neighborhood. So, you start going through the Folsom real estate listings… and you get discouraged. So, you up your price range and search again. It’s easy to think, “what’s another $25,000! STOP! Before you even start looking, do yourself a favor and call a lender. Just rip off the Band-Aid and get started on the home loan preapproval process. It’s more painless than you think. And the result is worth it and the peace of mind you will achieve. You will know exactly how much you can afford, if you can qualify. With the FHA Home Loan 3.5% down program, and the Down Payment Assistant programs such as the Sapphire Grant, CalHFA programs, GSFA Platinum, you just may be surprised at how little cash on hand you need to get into a home without going broke.
Fear No. 2
‘What if I buy a money pit?’ – Your life isn’t a Tom Hanks movie… most houses aren’t money pits. There are safeguards built into the system, because, guess what? The bank doesn’t want to lend money on a home below value either! That’s why they require home inspections, pest inspections, home warranty insurance and appraisals. A home inspector will advise you on potential repair costs and, whether, the home is up to the building codes. If there are repairs, or the appraisal comes in lower, this can provide leverage for you to go back to the sellers and either get a lower purchase price or negotiate the work be done by the sellers.
Fear No. 3
‘I’m worried I’ll overspend’ – This is a common theme, as first time homebuyers want all the bells and whistles in their first home and are not willing to compromise. But, most good agents know the price points of the areas you’re interested in living, know how much you are approved for, know what your personal budget is, and will show you homes in that range. If you find a home that you just love and it has a higher asking price, your agent should be able to advise you as to what the market value is, and if it can be negotiated down. They have access to what the current home value is and if it is lower than the asking price, they can back that up with historical data and comps. The bottom line is, if you are looking at El Dorado Hills real estate but your budget is below the median home value, you may have to be willing to compromise. The Cameron Park real estate and surrounding areas may be more affordable. If you are set on looking only at Folsom real estate to be close to work, you may need to look at the Fair Oaks housing market that is more affordable.
Fear No. 4
‘It’s just safer to rent’ – Well, sure, we’ve all heard that excuse, that if something breaks I can just call my landlord, and it will be fixed. Right. In the meantime, they raise your rent every year, you are committed to a lease, they can tell you if you can paint a room or not, and you are making their mortgage payment for them. Not to mention, you aren’t building wealth, just making someone else richer. If in doubt, use a rent vs. buy calculator to crunch the numbers and see whether it’s renting or buying that wins out in your area. Also, ask your lender or agent for the “break even” numbers for the areas you are interested in. Some areas such as the Folsom Housing Market, when you add up your closing costs, down payment, and monthly mortgage, you break even in 2 years. Which means it can be “cheaper” to buy then to rent.
If you are truly dreaming of owning your own home, get out of your head and take the plunge. We get it. And we’ll help you navigate the process. It’s a journey that can have great rewards. Give us a call to get the preapproval process started today!