“How much mortgage can I afford” might be your question, but these are some strategies every home buyer should know about getting the most home for your money. Right now is a perfect time to buy a home, for mortgage rates have fallen and are continuing to fall. It is currently a buyer’s market, and those who are jumping on the home buying bandwagon are making out very well.
Negotiate the price of the house
Bid low for the house. This tactic did not work 5 years ago when it was a seller’s market . Home sellers were receiving asking price or over for their houses. Currently, buyers are purchasing homes for 10 – 15% below asking price! Talk to your realtor and inquire about any other bids on the house. If there are none, submit a bid between 10-15% lower than the asking price as your first offer.
In most cases, the seller will come back with another offer closer to yours. Your second offer should be around 10% lower than the asking price at this point. Just make sure there is no one bidding higher than you if this is the house you have your heart set on. However, if you are just trying to get a decent house to live in, and that home does not work out for you, there are many houses on the market right now, with so few buyers. Trust me, with a little elbow grease, you will get your price. I have seen it happen time and time again. Sellers are desperate in this market, so take advantage of it.
Find a good internet broker
The mortgage rates are currently on a downward spiral again, which is good news for any buyer. Unfortunately, the mortgage companies have been a little tighter with lending money since the housing market began to decline several years ago. On a good note, it is becoming increasingly popular to shop and apply for home mortgages on the internet. Finding a mortgage that suits your budget is not as hard as it used to be.
When shopping for a home loan, you have the ability to go with a direct lender or a mortgage broker. The disadvantage to a direct lender is that they are limited with the amount of loans and options they can offer you based on your financial status.
A mortgage broker is a “middleman” between the buyer and the lender. They usually have many more loans to choose from, so you can take advantage of the best mortgage rates on the market today. The mortgage broker gets a cut from the lender for referring you to them.
So here is the real strategy! Finding a good internet broker can be a goldmine as they receive the smallest cuts if any at all. This can prove to be a real bargain for you when you are shopping for a mortgage.
Written by Jenna Scaglione