FIRST-TIME BUYERS It’s one of the most significant purchases to be made, and for people about to venture into the world of real estate as a first time home buyer, it can be a bit of a confusing experience. What should be an exciting time can often be overshadowed by the decisions and multiple steps that are part of the home buying process, not to mention the jargon you’ll continuously hear before you even turn the key in your new front door. Here, some tips to keep in mind. Planning Ahead Before you begin house hunting it’s a good idea to start putting money aside for the down payment. The more money you have to put down, the lower the monthly mortgage payment will be. While many buyers aim to put down 20 percent, it’s not required. You will, however, incur PMI (private mortgage insurance), an additional cost added to the monthly mortgage payment. Pre-Approval A letter from a bank or mortgage professional is an essential piece of information to obtain ahead of time. Based on the amount of money saved for a down payment and the amount of money a bank will loan, a prospective homebuyer has a better idea of the price range in which they can afford. A pre-approval letter also shows a real estate agent you’re a serious buyer. Plus, it’s necessary to have on hand when an offer is presented. Most agents and sellers will reject offers that are not accompanied by a pre-approval. Loan Options There are a variety of first-time homebuyer programs available through both federal and state programs. Loans such as FHA and VA can help out for those who qualify. For a potential homebuyer with less than perfect credit, who does not qualify for a conventional mortgage, the Federal Housing Administration loan might be an option. An FHA loan does require mortgage insurance which stays for the life of the loan, unlike a conventional mortgage which can be canceled after your loan is paid down to 80 percent or more of the appraised value of the home. It’s important to educate yourself on the pros and cons of an FHA loan. Also available is the VA loan for qualified U.S veterans, active military personnel, and certain surviving spouses. There are many benefits to this type of loan and one to look into if you meet the requirements. Proper Credit A high credit score is a significant factor when applying for a mortgage; it determines things like approval, interest rate, and possible terms of the loan. If your score is on the lower side, it’s a good idea to work on getting it raised before you start looking for a home. Focus on paying off any outstanding debt and stay away from opening up a new account or making large purchases. Location One of the first questions real estate agents will ask you is what type of area you’re interested in. This is a big decision, and because we all have different needs, lifestyles and tastes, there is no single location that is best for all individuals. Before sitting down with an agent it is important to consider both what you want out of a home and the type of area you are interested in living. Do you prefer to live near amenities such as public transportation, restaurants, stores, etc? Or do you prefer a quieter location, a bit further from the hustle and bustle? Deciding on this ahead of time will allow your real estate agent to target the right locations from the start and bring you to the right type of homes.
THE PERSONAL TOUCH Being born and raised in Brooklyn, I have witnessed the evolution of the borough and its real estate market. Brooklyn has become one of the hottest places to live, and that’s in part due to its rich history and being fueled by its proximity to Manhattan. One of the things I notice most about real estate is the first-time buyer. As a husband and father of two kids, I understand how vital it is to find the perfect home in the ideal location. There are so many factors to consider other than the home itself such as proximity to transportation, schools, recreational activities, etc. It can be very emotional and exhausting. Throughout my career, I have found that my clients value my sincere input and I have always enjoyed sharing my experience to exceed their expectations. I look at my clients as friends and treat them the same. It is not just business for them, its personal and that is why I have continued to grow my business year after year. For more information on Madison Estates, visit madisonestates.com. • MAY 2018 | NEW YORK LIFESTYLES MAGAZINE | 101