Home Buyer MUST Have Tools!

Today I will cover the importance of what tools you use during your home purchase process to search for properties and properly research any properties you are interested in to ensure it fits your needs, budget and more.

When you are in the market to purchase a home, one of the most important factors is going to be your monthly mortgage payment. Often times you will see an estimated payment on certain popular search sites, but they are usually significantly lower on the estimates than your actual payment would be.

Savvy home buyers need to know how to properly calculate their estimated payment. Often times, your property taxes and home owners insurance are "escrowed". This means, the amount the property taxes on the home for the year, and the cost of homeowners insurance coverage for the year, are added together, divided by 12 to be evenly distributed throughout the year in addition to your P&I payment (Real Estate lingo for Principal and Interest). The convenient thing about this, is that you do not have to pay two hefty tax bills per year in a lump sum, or your insurance premium. Your mortgage servicer pays them on your behalf. Some lenders require you to escrow these items and some give you a choice. Regardless, these are very important factors when it comes to how much owning the home will actually cost.

In addition, search apps that give payment estimates also have no clue what your personal financial profile is. This is why utilizing professionals and the human element is so important in a Real Estate transaction. They do not know things like, if you are putting 3.5 % down or 35% down. They also do not know what type of interest rate you are going to qualify for. Interest rate makes a huge difference in your monthly payment. Below is an example of the actual payment on the house shown above, with the estimated insurance and property tax escrowed, with 5 % down payment, and the often required PMI. One is factored in at 4% interest rate and the other factored in at 6% interest rate. (6 percent sound high? We are pretty spoiled right now on interest rates.. check this out for a chart of what interest rates have been historically... tells a story about one reason the market is crazy right now! )

And, truth be told, we are seeing interest rates lower than 4% right now, which makes affordability much more reasonable on the escalating home prices. This actually makes it cheaper to buy over the life of the loan, than paying $10,000-$20,000 less in the sales price for the property in a different market. But, that is a blog story for another day!

If you would like to utilize a mortgage calculator app, this is the one I recommend. It is user friendly and accurate in comparison to others I have used.

Mortgage Calculator Download Here

Next, I will touch base on an equally important tool: what you use to home search. Now, humans are all a little brainwashed by branding, but what first comes to mind is not always the best choice. Here are a couple reasons why as a buyer, you use the best search platforms. *Note* You will see me using the term MLS. The MLS is the Multiple Listing Service utilized by the members of your local board of Realtors. All of our listings are held in this data base, which is where we pull our information from on a perspective home. When we "activate" a listing in the MLS, it is officially LIVE and on the market.

• Sometimes you will not see listings syndicate with these sites until 1-2 days after they are listed, and by that time in this market, they could be long gone before you even get a shot.

• Sometimes you will see listings with inaccurate information or photos that can take days to remediate with IT departments.

• Some apps make it difficult and confusing about who to contact for information on the home because they are selling premier placement of agents contact information (answer to this, is contact your buyers agent)

• Some companies will have "featured" listings or paid placement.

For the home buyer experience, this boils down to being provided with accuracy, which is incredibly important!

I recommend HomeSnap. This is a highly accurate home search tool that is partnered with our MLS/ Board of Realtors. It provides MORE data about the listing. Listings syndicate very quickly once listed in the MLS, and it gives an easy messenger option if you have questions.

In addition to HomeSnap, I also recommend being put on automatic listing alerts directly from the MLS. This is where a search is performed with your must have criteria, and as listings hit the market within your defined criteria, they will be emailed to you.

For more home buyer tips, check out my page for home buyers, plus, you can have the Modern Buyer Roadmap sent directly to your inbox !

Become an Informed Buyer