by Pat Zaby
May 12, 2010 13:28 PM
A wish without a plan is a dream. While part of the American dream is owning a home, a plan is needed to find the “Right” home: the home that fits the buyer’s wants, abilities, and needs. It all starts with a PLAN.
As an acronym, the “P” stands for pre-approval which gives the buyer the confidence to know they’re going to find the “Right” home. By knowing the amount of mortgage you can qualify for gives you peace of mind and eases anxieties. You’ll be looking at the “Right” priced homes. It gives you bargain power with the seller because it removes an unknown commodity. The transaction will close quicker because only the title work and appraisal is left to do.
Learning early in the process about unforeseen difficulties in the credit report will give you time to correct them. Credit scores determine interest rates which will dramatically affect payments. It is critical to qualify for the best rates available. Pre-approval is the first step in the plan to find the “Right” home.
“L” stands for loan choices and there are lots of different choices available. Fixed rate or adjustable? With rates as low as they are currently, most people would choose a fixed but an adjustable may be the better choice if the buyer knew they were going to be in the home for a limited period of time. The right decision is determined by which loan will give the buyer the least cost of housing.
The amount the buyer wants to commit to down payment will also determine which loan may be best. If a person wants keep it to a minimum, FHA is a logical choice with a 3.5% down payment unless the buyer is a veteran and is eligible for 100% loan. There is a possibility to avoid PMI on 90% loans.
“A” stands for available concessions that the seller may be willing to make on behalf of the buyer such as paying part or all of the closing costs and contributing to a buy down of the interest rate to make the payments lower.
“N” stands for negotiations which take place in every home sale. Some parties are better at negotiating than others. It is to a person’s negotiating advantage to have as much information about the transaction and its parties as well as the proper tools to communicate the concepts proposed.
The "Right" home without financing will never have the buyer's address.
A Residential Finance Consultant is trained to help buyers and sellers understand the tax advantages, financing alternatives, and investment aspects of home ownership. An RFC will help you make better decisions.
Discovering the Finance Difference is a sales system to help people understand the tax advantages, financing alternatives, and investment aspects of home ownership. For more information, watch this demo.