Your Real Estate Questions Answered

On today’s show, Real Estate experts Michael Corbett (author of Before You Buy) and Sandra Rinomato, host of HGTV’s Property Virgins, were here to answer YOUR questions about the real estate market. Below are some tips, answers and advice they shared (Please note: As always, we do not recommend any personal financial strategy. Please consult your financial counselor for advice geared toward your individual circumstances).

Will Home Prices Go Up?

Michael noted that, while nationally the real estate market is still soft, real estate is ultimately a local business – so you should be concerned with the home prices in your own city/community. In certain states, like Floria and California, home prices will remain soft for awhile. But in many cities – like New York and Dallas – home prices have stabilized, and in some communities (Jackson, MS and Charlotte, NC for instance) real estate prices are going up.

What are the First Steps One Should Take When Buying a Home?

As Sandra says, first check your credit – to make sure it’s solid, and also that it’s accurate. Another important step is to calculate how much your monthly mortgage would be. It’s important to train yourself to live knowing that much income will go towards mortgage. So, if you live on $700 a month now and a mortgage will be $1400 a month, start saving that extra $700 a month so you know what’s it like to not live with it.

When is the Right Time to Buy?

When it’s right for you. While that’s vague answer, everyone’s circumstances are different, including the price of the home they find and their own financial circumstances.

How Much Money Should You Have Upfront for a Home Purchase?

Michael advises at least 20%. For example, with a $350,000 home, he advises that one should put aside $80,000. This would cover the 20% down payment ($70,000), closing costs ($1,800), points on your loan ($2,900) and other misc. expenditures that pop up.

What is the Difference Between a Foreclosure and a Short Sale?

Foreclosure = when a homeowner has to stop making payments on the mortgage, so the bank takes the house back.

Short Sale = when a homeowner trying to sell the house asks the bank to “eat” money because they must sell the house for less than it’s worth. For example, a home you owe $350,000 on but is now worth $300,000 forces the bank to eat $50,000.

How to Buy Another Home After Foreclosure

The experts advise some simple tips to help yourself get financially in shape to purchase another home:

*Never max out a credit card
*Never be late or miss a payment
*Keep a consistent employment record
*Save up for a significant down payment

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