Tiffany & Tonya - Sharkey/ Peek Group

Truly affordable housing

Many buyers make a common mistake when purchasing a home by trying to buy too much house.

You've been told that you should be pre-qualified for a loan before beginning your home search in earnest, and that's true. Knowing your top end is the first question to answer when searching for your new house and neighborhood. A word to the wise - just because a lender qualifies you for, say, a $150,000 loan, doesn't mean you should necessarily buy a $150,000 house.

Consider the fact that most people want to buy some creature comforts for their new home. After all, it's human nature to sit in your new place and want new curtains, a big, soft couch, and a fancy flat screen TV.

If you're purchasing an existing house, you'll probably want to make some immediate changes. This could be as simple as buying a little paint and new cabinet hardware, but it could also be significant - like new flooring or a patio. In either case, having a little extra money is a good thing.

Also, there are always unforeseen expenses involved with homeownership. It's better to have some money at your disposal instead of being stretched too thin every month because of high mortgage payments. Suppose your wastewater line fails and needs to be replaced. You have to come up with thousands of dollars for work that must be done today. If you're spending every extra penny on your mortgage, it's very difficult to accumulate any substantial savings.

Make sure there's enough room in your budget to pay for utilities and routine maintenance, too. It's not as much fun to own a large home if you can't keep it at the temperature you want.

Did you know that according to HUD, housing is considered affordable when a homeowner pays no more than 30% or his or her income on mortgage, property taxes, insurance, and utilities?

Some Texas REALTORS® have dedicated themselves to affordable housing by participating in a special 12-hour training program, called the Texas Affordable Housing Specialist certification. So if you're in the market for a new home, you can find a certified Affordable Housing Specialist Like TIFFANY SHARKEY AND TONYA PEEK AT 214-356-4472.

Shorten your mortgage

A 15-year fixed-rate mortgage lasts half as long as a 30-year fixed-rate loan. You don't have to work in the lending industry to know that. But if you guessed that monthly payments on a 15-year loan cost twice as much as on a 30-year loan, you're in for a surprise.

First off, you can typically get a slightly better interest rate on a 15-year loan. Also, you pay much less interest over the life of the loan and start paying down the principal on your loan balance much sooner. That means you build equity in your home sooner as well. Fore example, with a $150,000 30-year loan at 6.25%, your monthly loan payment would be $924. Your monthly payment on a 15-year loan at 6% would be $1,266. You would pay more than $100,000 more over the life of the loans if you went with the 30-year fixed instead of the 15-year. In fact, after 15 years, you would still owe more than $100,000 on the 30-year loan.

Does that mean you should always go for the shorter term? No. The choice you make will depend on several factors. Can you afford the higher payments? If you have to forego investing in your retirement or can't afford the lifestyle you want, the 15-year loan does not make sense. Also, if making the higher payments leaves you no cushion for emergencies and large expenses, you are likely better off with a 30-year loan. The amount of time you plan to stay in the home and other factors can factor in your decision as well.

Of course, there are other loans out there besides fixed-rate offerings, and your Texas REALTORS TIFFANY SHARKEY AND TONYA PEEK AT 214-356-4472 to discuss loan options and discuss which ones will work best for you.

Understanding the lingo - escrow

During the process of buying your home, you'll hear the word escrow thrown around. It's easy to get confused because the term can refer to different things that occur at different times.

If you've made an offer on a house, you have most likely been exposed to an escrow account-perhaps without even knowing it. Typically, a buyer must put down some earnest money, or "good faith" money, when submitting an offer. This tells the seller that you're serious about purchasing his house. This money is placed into an escrow account and is held for the seller. At this point, the transaction is said to be "in escrow."

As a buyer, you want assurance that no funds will change hands until the appropriate time, and the seller wants to know that the money is available. The keeper of the money, often called the escrow agent, is obliged to guard these funds while they are in her possession and to distribute the monies only if certain conditions have been met.

Another time that you may encounter the term escrow is when you're dealing with your property taxes and your insurance. In most cases, there are four components to the monthly payment that you make to your lender: principal, interest, tax, and insurance (PITI). Of these four, the latter two are reserved by the lender in an escrow account.

Your property tax and insurance bills are generally sent to your lender and are paid annually by the lender, using the money in the account. The portion of your monthly payment that comprises the tax and insurance is usually just about equal to one-twelfth of the annual amount. This may be a good thing-particularly if you're a first-time homebuyer-for while it increases your monthly payment, you won't find yourself facing a large tax or insurance bill you can't cover at the end of the year.

Additionally, your lender is entitled to keep a cushion in your escrow account. This allows for some unexpected increases to tax and insurance bills in the coming year. Under the Real Estate Settlement Procedures Act, or RESPA, the amount of cushion is limited to one-sixth of the amount paid out of the account in a year.

Your Texas REALTORS TIFFANY SHARKEY AND TONYA PEEK 214-356-4472 CAN ANSWER ALL YOUR ESCROW QUESTIONS..

After the inspection

You found the house you've been looking for! You're serious about buying this house; in fact, you've already put down earnest money, the option fee, and even gotten an inspection.

The inspection is such an important part of the buying process. A qualified inspector will evaluate the property's condition honestly and neutrally. The assessment may come back with all sorts of comments, especially in older homes. Don't be intimidated-all homes, even brand new ones, have defects, and finding imperfections is what inspectors do!

Your inspector should offer to explain any component of the report to you. Pay attention to anything that may have an associated health risk, like electrical faults, some types of mold, or a flawed hot-water heater.

You'll also want to closely evaluate items that may be immediate big ticket repair items-like a leaky or damaged roof, foundation issue, or a major plumbing problem.

Have your Texas REALTOR® provide a written copy of the inspection report to the seller. Get estimates to fix the reported problems and ask the seller to make the repairs or adjust the price accordingly.

Sometimes the seller will agree to make repairs, sometimes he'll meet you halfway, sometimes he'll stand firm. In any case, once he responds, you have to decide whether the price of the home plus the cost of repairs is a good value.

Be sure to confer with TIFFANY SHARKEY OR TONYA PEEK TO GET ANSWERS TO ALL YOUR REAL ESTATE RELATED QUESTIONS 214-356-4472.

Don't be deceived by numbers

There's a common statistic in the real estate world called Days on Market, or DOM. Some people believe a property that has been on the market for a while must have serious problems, but this is not necessarily the case. Don't let the number of days a property has been on the market dissuade you from making an offer on a house you really like.

Some houses are listed before they're actually ready to sell-perhaps the house is on the market despite the fact that it's undergoing remodeling or repairs. In this case, the home was just listed too early and probably isn't showing well. The days on market will increase, but after 90 days of renovations, it's not the same house, and it will show a great deal better.

There are also situations where the seller may not be motivated-maybe he doesn't need to sell and is simply testing the market. Perhaps he has a price in mind and is willing to wait for the market to catch up with that number.

Maybe the property has simply gone unnoticed-obviously a roadblock to a timely sale. Some homes may be tenant-occupied, which can complicate the showing process; others may not be marketed well, especially on the Internet.

Sometimes property is simply too specific for most buyers. It may have an amenity or quirk that just doesn't work for 99 people out of 100, but if you're that 100th person who appreciates the unconventional feature, you might immediately make an offer.

The bottom line is that there are many reasons a property may linger, and all that really matters is what you think.CONTACT TIFFANY SHARKEY OR TONYA PEEK AT 214-356-4472 YOUR ALL YOUR REAL ESTATE QUESTIONS.