Yesterday Sally Lapides over at www.realestateinsight.com/ posted an article for first time home buyers that demonstrated in the clearest possible terms the importance for first time home buyers to know what they’re getting into before they do it! Sally pointed out these startling facts (at least they were startling to me):
According to data from NeighborWorks America, a community advocate group, foreclosure rates for homeowners who attended homeowner education programs was 20 times less than that among subprime borrowers, and they performed three times better than those in the prime mortgage market during the second quarter of 2008.”
Wow! I have always had a visceral notion that knowledgeable buyers fare much better, but these figures really back that up.
Sally offered some very sound advice, too, and I’m going to repeat it here:
“Pushing yourself up to or beyond your limits leaves you highly exposed when changes to the national or your personal economy occur. Realize that your first home will not meet 100% of your wants and needs, determine the most important of your needs and the most desired of your wants and select a home that meets the majority of them.”
I would only add that just because your bank or mortgage broker says you’re qualified for ‘x’ thousands of mortgage money doesn’t mean you have to borrow that much! The word ‘budget’ isn’t a four letter word, and in fact, as much as we all hate the prospects of budgeting, a budget can be your very best friend (well, maybe second best, right after a good real estate agent) when making those very serious decisions about home ownership.
Bye for now,
...Victoria's blogging real estate professional.
Tags: First time home buyers
Duncan,
I was thrilled to see your tweet, thank you, when I was first starting out, many of my clients opted to be “house poor”, in order to be in good school districts and such, but today a month’s worth of utility bills is more than most mortgage payments were back then.
You also have to think about maintaining your investment; if you are stretching to pay the basic bills, what happens when you need a new roof?
I look forward to reading your blog