Helping out the Homebuyer

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Filed under: Market Comentary, Tips for Realtors

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As often as we work with new home buyers, we know that the process can be quite intimidating for them. Since buying a home and taking out a mortgage is probably the biggest financial decision buyers will make in their lives, it’s important for us to understand what the buyers are going through and to help them make this “decision” as pain free as possible.

So, according to Kirk Haverkamp, here are some tips that we need to be aware of on mortgage mistakes the home buyer needs to avoid. Knowing these can gain the trust of the home buyer and give them the confidence they need to make that purchase.

MORTGATE MISTAKES TO AVOID

1. Not Doing Your Homework. Many buyers jump into buying a home with a minimal understanding of how the entire process works. They should be encouraged to learn everything they can about mortgages and the process of buying a home.

2. Not Picking Your Lender Carefully. The truth is that mortgage loan offers vary significantly from lender to lender. A buyer who is at the top of their game will get loan offers from at least four or five different lenders. Some may think that major banks may have the best deals or that they should just pick the lender advertising the lowest “deal” in their area.  This strategy, more often than not, can lead to problems.

3. Focusing Strictly on the Interest Rate. This is probably the biggest mistake home buyers make. They need to know that a convenient way to compare the total cost of competing mortgage proposals is to look at the annual percentage rate on each. And they need to examine additional charges in a loan that will be more costly.

4. Not Planning for Secondary Costs. Home buyers need to understand that property taxes, homeowner’s insurance, and mortgage insurance will factor into additional monthly costs.

5. Not Reviewing Closing Documents. We know how much paperwork goes into the home buying process. Make sure your buyer is working with a lender that can answer all the questions and explain the paperwork clearly.

6. Submitting to Pressure. Many buyers may feel they are being pressured into buying their “dream” home. They need to be comforted and assured that this is a difficult decision and if they need time to think about it, grant them that time.

So again, working with the home buyer and having that open line of communication is crucial. We are the experts and our buyers need to feel confident that they are doing the right thing!

 

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