Skip to main content

Essential Home Buying Information

As a licensed Real Estate Broker I track regular developments in the real estate industry including equity and financial sector movements. From tuning into CNBC on a daily basis, I gain insight into these markets and read many of the literature published on those markets. Additionally, I am a member of the National Association of Realtors and the Connecticut Association of Realtors as well as a member of the Greater Fairfield County Multiple Listing Service and finally I have been a licensed mortgage broker for a variety of years, including those widely talked about “bubble years” when quick lending became the standard. I have a number of things to remember for those seeking to purchase a house. Fair Cash Deal offers excellent info on this.

For your conceptual needs, go straight to the state or national bank for pre-approval of the mortgage! As a licensed mortgage broker up until a few months ago, I would recommend you head straight to your local or regional bank office whether you are trying to be pre-qualified or pre-approved for a mortgage. The explanation is that they normally have a broad selection of items for you to pick from and generally have well qualified members. That ensures you don’t usually see a sign on a nearby telephone pole saying the local bank is searching for higher loan reps and processors. Finally, usually a mortgage broker is a middleman in the process so they have to be paid in every way. (Either by charging you additional closing fees at your closing date or what was called YSP or Yield Spread Premium. In other words, they receive a lower interest rate from an entire sales lender and then pass a higher interest rate on you and then the wholesale bank pays the broker for passing a higher rate on you.) As for my fellow mortgage broker colleagues, I’m sorry to report this fact. When you’re a mortgage broker, I want you to come up with one thing, “the buggy whip.” If you know that your client could get a better deal going directly to the bank and cutting out the middleman (the mortgage broker) then you should have a duty to advise them to do so, as an ethical duty to your client.

When Would You Purchase-Do not attempt to schedule the business! When you’re able to invest so you can assess your options for what’s right for you at the moment, not that you believe you’ve got a magic ball that shows you where the bottom or peak of the market is down. More critically, consider the choice to purchase the home on the basis of what makes the most practical sense for your existing budget and household income, not your expected household income, because potential predictions are always subject to adjustment (be conservative). In other words, buying a home shouldn’t be a gamble, nor should it be based on what your best friend or relative has just bought and you want to do it. Note, let the reference be recent history and be careful on what the true cost of purchasing a new house would be. Last but not least, only because the bank states you may apply for a certain mortgage, maybe the mortgage you apply for will not be acceptable to you while contemplating the other costs (make sure you prepare to make sure you may cover the mortgage).

Eviting Wild Hypothecs! Remember as already mentioned; it shouldn’t be a risk to buy a house. I know there are several mortgage products designed with the best of intentions, but sometimes the best of intentions is just that, intentions. So, your first consideration should be a product of fixed mortgage rates that fits conservatively into your monthly budget.

Use a qualified real estate agent when buying a home! Typically you should sign a contract with your real estate agent to represent buyers and this contract should clearly state the agreement between you and your agent. Just a note on this, real estate agents get paid only once there is a transfer of title on the property you are purchasing and when they represent you legally. So, remember, unlike most jobs where you put in your time and get a pay check at the end of the week, that’s not how it works for real estate agents. This means that real estate agents typically work with a client or customer for many hours of their time, and never get paid.