Blog :: 12-2014

Welcome to our blog! Here, we'll keep you updated on everything you need to know about the real estate market in the Upper Valley. We keep our finger on the pulse of the local real estate market from our office in Enfield, NH. 

Questions about real estate in the Upper Valley? Contact us today!

6 Common First Time Home Buying Mistakes


If you are a first-time home buyer, finding the right home for you and your family can be overwhelming and stressful.  There are so many decisions to make!  Before you start looking, make sure you're not committing one of these classic first-time buyer mistakes.


1. Not knowing what you can afford to buy

If you haven't been pre-approved, don't go shopping.  Understand the math of your future home loan or mortgage and know what you'll qualify for - this will stop you from looking at homes or neighborhoods that are beyond your financial reach.  Be aware that pre-qualifications are not the same as pre-approvals.  So make sure you know what you can afford with an official pre-approval notice.  A real estate agent can recommend lending institutions or banks.  Be sure you shop around for the best short- and long-term plans for your particular financial situation.


2. Ignoring the additional costs

Although you may be used to paying rent and utilities, there are more monthly and annual expenses associated with home ownership.  Some costs are easy to calculate prior to home ownership like property taxes, homeowner's insurance or even homeowner's association fees.  But there are a multitude of unforeseen additional costs like emergency repairs or replacements.  Along with regular maintenance costs, first-time home buyers should have a clear understanding of just how much it might cost to own and operate the home each month.  Most experts advise setting aside about 1%-5% of the cost of the home each year to save for future upgrades and maintenance costs. Although that might sound like a significant amount, knowing that you've saved money for emergency repairs will help alleviate stress on your paycheck.


3. Thinking a fixer-upper is easy and cheap

Although a few first-time home buyers purchase a home with the expectation of a full-scale renovation, most homebuyers simply want to move in and make it their own.  Making cosmetic changes like painting walls, replacing the front door or refinishing floors are fairly easy and inexpensive.  But all too often, first-time home buyers see a home as having unlimited potential without understanding how much it might actually cost to renovate.  They might also make the mistake of thinking they can do it all themselves.  It's too simple to think that you can tackle major structural changes on your own.  If you're tempted to purchase a home and really want an expert opinion as to potential costs, code upgrades, permits required or other important information, consider hiring a professional general contractor to tour the home with you and give you a realistic cost and time estimate for your desired renovations.


4. Not hiring a home inspector

Even if your bank doesn't require it, you should always have a home inspection contingency on your home purchase.  Hiring a licensed and experienced home inspector (ask us who we recommend!) who will thoroughly inspect your home is an important step on the home buying experience.  Regardless of the age and condition of the home, first-time home buyers can benefit from the expert advice of a home inspector.  Home inspectors spend several hours assessing a home and provide a lengthy, written report on their findings.  Although they cannot say if the work was done well, they can let you know if the home was built to code.


5. Thinking you can do it on your own

Although you've probably done your homework, it's always best to hire a licensed real estate agent, especially if this is your first home. Real estate agents know the market, they understand the comps (the competitive prices of comparable homes), and can help you identify the home that will best fit your needs.


6. Being distracted by over-the-top features

A potential home should have good curb appeal - this means that the homeowners have taken the time to fix up their home.  Expect a certain amount of investment from the owners; they may have invested in a few upgrades aimed to please potential buyers, but don't let yourself be distracted by over-the-top improvements or home features that you won't end up using.  A swimming pool, for example, may have you dreaming of hosting summer parties however, swimming pools are high maintenance and very expensive.  Same goes for elaborate landscaping or rooms dedicated to a specific hobby (like a wine cellar, craft room or gym).  You may luck out and be the buyer that is right for this home or you may hate these features and have to spend money removing them.


3 Key Tips To Help Ensure Your Mortgage Pre-Approval Is Not Declined

If you’re thinking about buying a new home and using a mortgage to help cover some of the purchase costs, it’s a good idea to get an initial pre-approval from your lender before putting in an offer.

In today’s blog post we’ll share three quick tips that can help to ensure that your mortgage pre-approval isn’t declined.


Demonstrate Your Income and Good Credit

A mortgage is a major financial transaction and one that carries a certain amount of risk for the lender. It’s your goal to help them see that you have the ability to make your monthly payments and that there is very little risk in approving your mortgage. Be ready to demonstrate all of your sources of income and that your credit rating is clean.

It may be worth paying for your credit report before starting the pre-approval process so you can clean up any black marks or false reports and so that you can see what the lender will see when they check your credit history.


Choose the Right Property at the Right Price

As the home you’re buying will be used as collateral to back the mortgage, the lender will need to see that there is enough value in the home to cover the cost of the mortgage should you fail to pay it back. The “loan to value” or LTV ratio is the amount of your mortgage divided by the value of the home. For example, if you’re borrowing $150,000 to buy a home valued at $200,000, you’ll have a LTV ratio of 75 percent. Keep in mind that each lender will have their own target LTV that they prefer to work with, so you may need to shop around a bit.


Start the Process with Multiple Lenders

Finally, if you feel that your income or credit history isn’t perfect you may want to consider visiting a couple of different mortgage lenders to see what they can offer you. There are dozens of different mortgage products on the market today, and each lender has their own set of qualification criteria that they will use to assess risk and whether they feel that you can afford to pay the mortgage back. Getting a second opinion may help you to discover a more suitable mortgage or one with a better interest rate.


If you have more questions about loans and mortgages, or don't know where to start... ask us!  We work with plenty of lenders around the Upper Valley on a regular basis and we're more than happy to help you!