Home & Family
Homebuyer’s Handbook
4/2/2018 10:19:40 PM
Homebuyer's Guide

Polls show that buying a house can be more stressful than bankruptcy, divorce, or even bereavement. There are so many steps, so many decisions, and so many things to consider, the process can be truly overwhelming. English Renaissance notable Frances Bacon is credited with coining the phrase, ‘Knowledge is power.’ And it is true: the more you know about home buying, the more comfortable you will be with the process. Here, we share information on a myriad of home buying topics to assist you as you search for and secure the home of your dreams.

Saving for a New Home: MISSION POSSIBLE
by Pamela S. Thibodeaux

Many people today want to own their home, but lack confidence that they can save enough money for such a large purchase. The reality is, with time and patience, most people can indeed save and achieve home ownership.

One of the first priorities when getting ready to buy a home is to be pre-approved for a loan. Talk with a mortgage broker and determine exactly where you stand credit-wise. These folks are experts in their field and know how to guide you when it comes to the right credit score, how much borrowing power you have, and what your down payment and closing costs would total. They can also estimate interest rates, monthly payments, etc. Even if you’re looking to buy in the future, it’s never too early to get some numbers together and start preparing and saving. 

Next, set up a budget and save for those costs mentioned above. 
"My biggest advice I give to my clients in regard to saving for the home they want is to start pretending they have a house note immediately,” says Alana Mears, Vice President and Mortgage Executive at Iberia Bank. "If they are preapproved for $1,000 monthly note, I suggest putting exactly that amount (or more if possible) into a savings account. It is important that they "feel” how this mortgage payment will affect their monthly budget.”

Whether it takes you months or a year or two, all extra funds (raises, bonuses, tax refunds, monetary gifts received, money left over at the end of the month) should go into a special account labeled HOME. It is not uncommon to set aside several thousand dollars in a few years. 

Compare banks, credit unions, and online banks to see which kind of account will pay you the most interest on your savings. Watch for hidden fees and early withdrawal penalties.

Do you have an IRA? Using funds from your IRA can mean taxes and penalties–unless it’s used to buy a home. IRS rules change, so ask if this is a possible option for you.

While setting up that budget, add in ways to pay off existing debt. As one bill is eliminated, double up on other bills, or add that payment into your savings account.

Here are some other credits and/or special financing options you may qualify for:

First Time Home Buyer 
Many finance companies give special rates and discounts for first time home owners.

Rural Development Financing
Depending on where your dream home is located, the house may be eligible for special funding, which means better rates and sometimes even 100% financing for the buyer.

Are you an HGTV fan?
Consider purchasing a fixer-upper for far less than a ready-to-move-into home and save hundreds, perhaps thousands of dollars.

Foreclosures and Sheriff Sales
People have found incredible deals on homes by checking into these options.

Some potential homebuyers begin the process with a firm plan but eventually get off track or lose enthusiasm. Don’t despair. Saving takes determination and dedication but owning your own home is indeed a possible dream.

Welcome to the Neighborhood
by Austin Price

It’s easy to forget when you’re house hunting that you’re not only looking for the perfect home, but for the perfect neighborhood. Most of your attention when searching for a new place to live is so focused on the most obvious elements -- the price of the home, its appearance, the square footage, how it feels -- it’s easy to dismiss the rest as details to be sorted out later. But in terms of the where, there is more to consider.

First, determine the needs of your family.

 If you’re a parent with children, you’ll want to know what school district the home is in, as well as the generational make-up of your neighbors. Are the neighbors young couples with children, or are they mostly empty-nesters or elderly? You’ll likely want your children to have friends in the neighborhood. If you’re a young couple or single, consider your preferences in a neighborhood. Are the neighbors people you would feel comfortable asking for help or inviting over for a visit?

Think about what you want from your location. 

Do you want to live in the city, where you can easily walk or bike to parks, restaurants, and entertainment? How far are you willing to commute to work? Do you prefer the peace and quiet of a rural or suburban area? Do you want to use public transportation? These are all important questions to answer before you begin house hunting. 

Finally, study the long-term Financial aspects of the neighborhood you are considering. 

Housing is an investment, after all. Will your new home maintain, or even better, increase in value? Is the neighborhood growing rapidly, is it stagnate, or in decline? Has there been a recent revitalization in the downtown historic district that you’ve fallen in love with? Some of these questions are easy to answer. A walk through the location and conversation with nearby businesses and neighbors about the history of the area can give you a nice overview; but you’ll want to research other elements more thoroughly. Use a brokerage website to look at the pricing trends in the area over the past two or three years. Study the absorption rate to see if properties in the area are frequently flipped. Your real estate agent should be a good resource, as well.

There’s no one way to hunt for the best neighborhood for you. We all have different needs and desires and ideas about what we want from the place we live. These are but a few guidelines to keep in mind when searching not only for the perfect home, but the perfect neighborhood.

Find the Mortgage That’s Right for You
by Keaghan P. Wier

Congratulations! You’re ready to begin looking for a new home. It’s an exciting process, but there are stressful elements, too. Perhaps the most stressful? A mortgage.

If you’re in the market for a new home, it’s important to know what to expect when applying for a mortgage. We asked Jessica McBride, Branch Manager for Assurance Financial, what you should know before getting started.

"Many homeowners really don’t know how many programs are available to them,” McBride says. "And not all lenders are created equal.” She encourages buyers to shop around and find a lender that best fits their unique needs.

Here are a few common questions asked by home buyers about mortgages, and McBride’s professional advice.

What Are the Major Factors that Impact Mortgage Options?

When it comes to getting a loan for your new home, we all know the most important factor: credit score. However, McBride is quick to point out there is more to it than that. Programs typically consider the amount you have saved for a down payment and your total budget, while others may take factors such as your job history and marital status into consideration.

Worried about your down payment? Some programs allow for little to no down payment. Others offer grants to assist with down payment and closing costs.

What If I Have Poor or No Credit?

So, if credit is the most important factor, what about home buyers who have poor or no credit? According to McBride, "There is always an option for buyers with limited or blemished credit; it just might not be immediate.” Many professionals are ready to work with clients to build and repair their credit.

If you are concerned that your poor or limited credit will work against you when applying for a mortgage, McBride recommends you reach out sooner rather than later. Many things you may think will help your credit could actually only waste your time and hurt you in the long run. Instead, consult with professionals who can help you find the best path forward – and the best program to fit your needs.

Should I Get Pre-Approved?

The biggest reason to seek pre-approval, according to McBride? One word: budget.  Knowing upfront what you are comfortable spending monthly on your house note is crucial to this whole process. McBride explains, "The last thing you want is for me to tell you that you can afford a $300,000 home you have fallen in love with, only to find out that you are not comfortable with the monthly payment it comes with.”

By getting pre-approved for your loan, you’ll have the ability to work backwards, starting with your comfort zone for monthly payments and ending up at the potential price range for your new home. Not to mention the fact that pre-qualification and pre-approval can show that you are serious and trustworthy, while offering you the chance to find your dream home within your budget.

Ready to get started? For more information, call Assurance Financial at 337-419-1885.

Negotiating the Best Price for Your Home
by Lauren Atterbery Cesar

Home buying can be stressful even at the best of times. There are so many moving parts to keep track of, and getting the best deal on the home of your dreams should not be one of them. Once you’ve found your soon-to-be sanctuary, consider these negotiation strategies to make sure you get your home at the best possible price.

Get your ducks in a row before you make an offer.
Any offer you make on a house will be a lot more persuasive if you don’t have to wait for a loan to be pre-approved. Meet with your lending institution and complete this task first. Next, make sure you’ve got a realtor you trust who fits your needs. They can help you use their finely tuned negotiating strategies to come up with the strongest possible offer for the home you’re interested in.  Joshua Floyd, top realtor with Ingle Safari, advises, "Your lender will order an appraisal to determine market value. Your realtor can negotiate based on those findings should it come in lower than our offer price. If it comes in higher you have instant equity.”

Base your offer on the value of the home, not the list price.
Take a look at the recent sales in the neighborhood you are interested in. This will give you the information you need when negotiating with the seller or their agent. If the home is listed far above what other homes around it are selling for, you may be more successful in making a lower offer. If the home is listed for less than market value, you probably will not be able to get it for much less than it is listed for. Josh reminds that your realtor will already be running the numbers to make sure you don’t overpay for the home. 

Be creative when negotiating. 
"Everything can be negotiated,” Josh explains, "including but not limited to price, closing costs, home warranties, and repairs.” When a seller does not come down on their price enough, there are several ways you might be able to save yourself some money. Ask for repairs that the home needs, or if the seller is willing to make other concessions like paying the closing costs. Understand that you likely will not get everything you ask for. The seller can always say no, but it never hurts to ask.  

Add a personal touch. 
Buying a home is emotional for you, but understand that the process can be just as emotional for the seller. They are selling the place they made memories in, and they likely want their home to go to someone who will appreciate it as much as they did. Consider submitting a personal letter or photographs of you and your family to the seller explaining why you love their home. This personal touch may mean more to the seller than an anonymous offer.

Insuring Your New Home
by Pamela S. Thibodeaux

Purchasing a new home can be fun and exciting. It can also be fraught with fears, insecurities, and too many things on your ‘to do’ list. Many people get caught up in the excitement and forget one of the most important aspects of buying a new home–insuring it! Then, in a panic, they accept the first quote they receive, not understanding the basics of a home insurance policy.

Several things factor into insurance rates (age of home, location, fire protection class, distance from water, flood zones, etc.) so the day you start looking at homes, get a couple insurance quotes on those homes on your short list. 

Before we get into the specifics of insuring your new home, consider some factors that may cause you problems in obtaining insurance.

A Federal Pacific Electrical (FPE) box
Many companies will not insure a home with a FPE breaker box so be aware if the home you’re interested in has one of these. Make replacing it part of your negotiations.

Outdated wiring, plumbing, AC & heating
Older homes are required to have wiring, plumbing, and central air & heating units updated within the last 10-20 years depending on the company. Some companies will not insure a home with window units and space heaters.

In need of repairs
Some home buyers love a fixer-upper, but these can be difficult to insure or may need to be insured differently than with a traditional homeowner policy.

Now that you have an idea of what to look for when purchasing your home, look for discounts available to help ensure you get the best possible rates on your home insurance. These include New Home discounts, Hip or Partial Hip Roof discounts, Security System discounts, Home/Auto Bundle discounts. Some companies even offer a Non-Smoker discount, so keep these in mind and ask your agent questions when you’re getting quotes.

Knowing and understanding what a home or mobile home policy covers is an asset to new home buyers. A standard insurance policy covers Dwelling, Contents, Other Structures, Loss of Use, and Property Liability.

What Millennials Look for in a New Home
by Christine Fisher

A new wave of homebuyers is hitting the real estate market – Millennials. Born between 1980 and the late 90s, this tech-savvy generation is changing the way homes are built, bought, and sold.

Ever-increasing rent and the desire to start a family are driving them toward buying a home. "This age range is from 20 to 37 years old. It’s been the typical first-time buyer demographic for years, but many young adults chose to rent apartments or homes,” said Jennifer Sproles, realtor with Century 21 Bessette Realty. "They might have wanted to stay mobile for their career, or in some cases, the difficulty in qualifying for or affording a mortgage was a deterrent. Now that the real estate market has stabilized, Millennials are interested.”

Sproles says that while this trend is especially apparent nationwide, here in Southwest Louisiana, young adults are increasingly part of the home-buying demographic. "We’re seeing an increase in this age group. Our area has a lot to offer thanks to the economic growth happening. We’ve always been a family-friendly area and now we have great opportunities that are enticing families to choose Southwest Louisiana over other regions.”

One of the features many Millennials enjoy about our area is the small town feel with proximity to larger cities. "With Houston, Baton Rouge and New Orleans nearby, a lot of up-and-coming professionals are easily settling into Southwest Louisiana. Great schools, job growth, entertainment, and quality of life are all here, while big-city opportunities are within an easy drive,” she said.

In the past, first-time homebuyers gravitated toward the biggest house they could afford. That’s not the way Millennials think. They’re willing to sacrifice square footage for high-end finishes and energy-efficient components. 

Most do not want to spend their weekends doing repairs and improvements. They will choose a smaller home that’s in great condition over a home that has a lot of square footage but comes with a long to-do list.

"New construction homes with low maintenance, upscale condos, and fully-renovated homes with character are their go-to choice of styles,” Sproles said. "While fixer-uppers aren’t as appealing to most Millennials, they can be a great investment to those who are willing and able to put in sweat equity.”

An open floor plan continues to appeal to these buyers. In most cases, they do not want a formal living room or dedicated dining room. "They look for homes that can be adjusted to fit their needs rather than having wasted space,” she explained. "They want flexibility to turn a dining room into an office or a playroom for the children.”

Entertaining, even if it’s low-key, is a priority for this age group. An outdoor space and a great flow between the kitchen and living area can entice them to choose one house over another. They enjoy spending time with friends and family and they’re looking for a home that will enhance these experiences. 

"I’ve found that this demographic has done their homework. They usually have a list of homes that they want to see. What they need from me is interpreting the information; guiding them through the home buying process and providing accurate information,” said Sproles. 

Even though they are super tech-savvy, nothing replaces the value of a good relationship with a qualified realtor. "They’re looking for guidance so that their experience is efficient and smooth, because they’re ready to begin enjoying their home and making memories,” she said. Millennials know that information can be found anywhere; navigating through it with accuracy and ease is best done with help from a realtor who knows the area, the process, and the potential pitfalls.

Ease your Children’s Transition During a Move
by Julie Etter

Moving can be hectic. It’s physically and emotionally demanding at a time when you are supposed to continue with the rest of life . . . jobs, dinner, rides to soccer. It’s a full-time job on top of a schedule that doesn’t have room for "another” job. In all of that, it’s easy to make mistakes with the kids and their involvement (or often lack-thereof) in the move. Dealing with temper tantrums, outbursts, and sometimes intangible ways of fearful expressions by kids in the middle of a move only adds to parental stress. Read on for some straightforward suggestions that parents can follow while moving children from one home to another. It all comes down to one fundamental component: involvement.

Take their wishes into consideration. Allow your kids to identify what they love most about their current home and what they most want to see in a new home. Although this won’t erase all anxiety, there are often simple things that can be created to help with the child’s transition (e.g., a room color, a swing set, furniture you are moving with you anyway).

Bring the kids to see the new property. 

Children are often left with babysitters while parents view homes. Although this is logical, once a property is under agreement and you know where exactly you are moving, set a time to go to the house with the kids and let them check it out. At a minimum, this will allow their anxiety to be focused and hopefully more specifically identified than that of the unknown. This is also a good idea in respect to visiting a new school, if applicable.

Let them pack. 

Putting all the kids’ stuff in a box and telling them it will be at the next mysterious place creates uneasiness over what’s happening with their stuff.  Allow them to pack their own toys into boxes. This will give them a sense of responsibility and control. In Lily and Andrew are Moving, a children’s book designed to identify and work with kids’ moving anxieties, each family member gets a "color.”  The color-coded stickers are then placed on that member’s belongings/boxes. That same color is placed on that family member’s bedroom door for ease of identification.

Prepare yourself for extra emotional outbursts and use them as a foundation for conversation. 

One of the biggest complaints I get from parents is that the kids’ behavior is very poor and it’s yet another stressor during a hectic time. Try to remember that everything going on and the stress you are feeling is undoubtedly affecting them, as well. They may not know how to articulate why. Use these situations to talk about the move with your child.

Most of all, understand that the kids are moving, too. 

Regardless of whether it’s a positive or negative move for the family, work through their reactions just as you do in your role as parent in any other life event.

Julie Etter is a professional, national award-winning realtor and former middle-school teacher based in Wrentham, MA. She is the author of Lily and Andrew Are Moving, published by JT Publications, LLC. 
For more information, visit treehousebuddies.com.
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