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Posted 10/29/2015

Buying A Home Moves Beyond Just “Location, Location, Location”

Buying a home about more than just location

First-Time And Move-Up Buyers: 87% Of The Market

The U.S. housing market is strong.

According to the National Association of REALTORS®, home resales totaled 5.50 million in September on a seasonally-adjusted, annualized basis -- a 9% increase as compared to one year ago.

Plus, as a signal of the housing market's staying power, home sales are no longer fueled by speculative real estate investors. Everyday consumers comprise the majority of this year's action.

First-time buyers and move-up buyers account for 87% of today's home sales.

For most of these buyers, purchasing a home will be the largest asset purchase they make in their life; and it can be tricky, confusing, and frustrating for those who fail to prepare.

In addition to mortgage concerns, such as "Do I have to put 20% down on a home?" and "Which is the best mortgage for me?", buyers should approach the home-selection process with the same level of detail.

There are a number of red flags to consider when buying a home, for example, and a number of signals that all's clear to move ahead.

Recognizing the difference between the two can be the difference between getting a great deal on a home or having regrets about the purchase you've just made.

Click to see today's rates (Jun 26th, 2016)

Will Your Home Serve You Today, And Tomorrow?

In its most recent profile of home buyers and sellers, the National Association of REALTORS® reports that the typical home buyer lives in their home for a period of approximately 10 years.

Therefore, as a home buyer, you should consider your purchase of a home within the context of "a decade".

It's terrific to be in the school district you want, for example; or, to be near amenities which are important to your household, but it's important to look at your potential purchase and the health of its systems.

Be alert to potential problems and you'll increase the chance that your new home will treat you well for the time you expect to reside in it.

1. What is the condition of the roof?

There are few "replacement costs" higher to a homeowner than the replacement cost of a roof. Depending on the size of your home, replacing a roof can cost tens of thousands of dollars. Sometimes, these costs can be covered by hazard insurance.

Many times, they are not.

When you in the home search process, then, ask current homeowners about the age of their home's roof. Most roofs last 20 years with little maintenance. Some roofs will last longer.

If the current homeowner does not know the age of their home's roof, be on the lookout for missing or curled shingles, which can be a sign that the roof is aging and reaching the end of its useful life.

If you’re unable to uncover the age of a roof and cannot determine its condition via eyesight, consider asking the seller for a formal roof inspection be completed prior to purchase.

Click to see today's rates (Jun 26th, 2016)

2. What is the condition of the HVAC system?

Another expensive item to replace in a home is the HVAC system.

HVAC stands for Heating, Ventilation, and Air Condition. HVAC systems typically last 10-12 years, but with regular, seasonal maintenance, they can last up to 15 years or more.

Therefore, when looking at homes, it's a good idea to ask the current homeowner when their HVAC system was purchased, and how regularly the system gets serviced.

If a home's HVAC system looks "old", similar to with the roof, you can request that an inspection be performed prior to closing. This will help ensure, as a new homeowner, the HVAC system you inherit is in good, safe, and working order.

3. What is the condition of neighboring homes?

"Location, Location, Location" -- it's a common refrain among real estate professionals. And, for good reason.

When you’re buying a home, the location of the home can affect its long-term value and utility than its number of bedrooms or total square footage, as examples.

Some of the information you should seek to includes:

  • What is the plan for future development near this home?
  • How do the local schools perform versus the state, and nationally?
  • How close is this home to public services including fire and police?

You should also consider the home's real estate tax bill, which affects your monthly mortgage payment.

Tax costs are often listed on a home's listing sheet and you can plug them into a mortgage calculator to see the home's true cost.

Here are 9 areas on which to focus when choosing a neighborhood to live in.

4. What is the home's efficiency rating?

The cost of heating a home and cooling it is often overlooked as part of the home purchase process. A home with leaky windows or poor insulation, though, can suck thousands of dollars from your annual budget  -- the cost of several months of groceries.

A home with window which fail to seal tightly or which are generally inefficient will yield larger heating and cooling costs as compared to a home with new, efficient windows. Similarly, a poorly insulated home will lose heat during the winter months, adding to energy costs which temperatures are low.

Sometimes, small changes can yield large savings in terms of energy consumption. For example, changing light bulbs and replacing appliances can reduce a home's energy footprint. Other times, large changes are needed -- and this may include replacing windows and roofing.

Ask a home's current owner about its monthly utility costs, or seek more information from your local utility company. Small changes can sometimes be handled prior to closing by the seller.

For larger items, consider using the FHA 203k loan, which is especially suitable for energy-efficiency improvements on a home.

What Are Today's Mortgage Rates?

Home sales are strong as the 2015 housing market comes to a close and the 2016 housing markets gets ready to begin. And, for today's active buyers, the best deals will be the ones which can serve their buyers not just today, but over the next 10 years or more.

Take a look at today's real mortgage rates now. Your social security number is not required to get started, and all quotes come with instant access to your live credit scores.

Click to see today's rates (Jun 26th, 2016)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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2016 Conforming, FHA, & VA Loan Limits

Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)