If you have more money to put down on a home, should you?
In our experience, many buyers don’t quite understand how much money they must put down for a loan to qualify for a mortgage. Many assume they have to put down 20%, but that’s not true. According to Fannie Mae, more than one-third of all Americans overestimate how much money they need to put down.
How much money you need to put down depends on a few factors,including your credit score, the price of the home, and which loan program you use. Many programs require as little as 5%, 3%, or even 0% down. If you prefer to put down more than 20%, you’re more than welcome to. If you put down less than 20%, you will have to pay private mortgage insurance (PMI), which is added to your monthly payment.
At 1:24 in the video above, I’ve provided a chart that lists your down payment options when using a 20-year conventional loan for a $250,000 house. For example, if you put down 3% in this situation, your down payment would be $7,500 and your total monthly mortgage payment would be $1,232. If you put down 5%, your total monthly mortgage payment would be $1,172. At 10%, your total monthly mortgage payment decreases to $1,095. At 20%, it shrinks to $926.
As you can see, the monthly difference between 3% and 20% is about $300. However, at 20%, you’d have to put down $50,000. That’s why it’s important to know how much you’d actually have to take out of your savings when deciding on what to put down. Also, keep in mind that there are three other items added into your monthly payment: your monthly taxes, homeowners insurance, and homeowners dues.
So, in answering the question of how much money you should put down, you have to ask yourself another question: How risk-averse are you?Some buyers just want to have the lowest payment possible so they can pay off the mortgage as fast as possible. Others are okay with their payment being a little higher and using what’s left of their savings to diversify their investments. Investing in real estate and buying your own home is a fantastic investment, but it’s a non-liquid asset.
When buying a home, getting a loan is an important, complicated part of the process, so be sure to have your Realtor refer you to their most trusted lender so you can educate yourself. This is what we do with our clients daily, so if you give us a call. We’d be glad to give you the name of one of our trusted lenders.
As always, if you have any more questions about this or any other real estate topic, don’t hesitate to reach out to me. I’d love to help you.
November 12, 2019 (Chapel Hill, NC) – After analyzing and scoring 105 agents, Expertise has awarded Jodi Bakst (left), owner of Chapel Hill-based Real Estate Experts, a place on its 2019 list of the Best Real Estate Agents serving Durham, NC.
“I’m thrilled!” Bakst said, smiling, as she downloaded the award badge for her agency’s website.
Based in Seattle, WA, Expertise uses a proprietary, in-depth research and selection process, including detailed comparisons, to identify the top service professionals in over 200 different industries in significant cities across the United States.
Ultimately, the Expertise team conducts a manual review before notifying those who make the list. But first, Expertise’s in-house software grades them on Reputation, Credibility, Experience, Engagement (approachable and responsive to clients), and Professionalism.
“Jodi Bakst… began her career in the real estate field over two decades ago,” her Expertise listing points out. “Focusing on the local real estate market in Chapel Hill, Durham, and surrounding communities, she specializes in residential properties, green building, digital marketing, and property management.” It also notes her “many advanced certifications, including residential and luxury home marketing specialist, distressed property expert, and international property specialist.”
Expertise reports that the lists on its website, Expertise.com, receives over half a million monthly visitors. To see all of the lists of “Best Local Experts” by state, city, and category, visit expertise.com.
Real Estate Experts is a residential real estate and property management company that has been serving the local market for over 20 years, going above and beyond to provide exceptional service to its clients. The agents are experts in their market and out-of-the-box thinkers when it comes to the real estate transaction, negotiation, and marketing. With their clients in mind, they listen and deliver the results they want. For more information, visit realestateexperts.net, call 919-928-9131, or email [email protected].
LeeAnn Prescott, who works in the Real Estate Expert’s Chapel Hill office, and Cathryn Hartwell, who works in our Burlington location, join me today to help me explain why you should join the Real Estate Experts team.
LeeAnn is a relatively new agent. She interviewed four different companies and did countless hours of research on others, but in the end, she decided that the Real Estate Experts was the best fit for her for a multitude of reasons.
On the Real Estate Experts team, your success drives your revenue. We don’t make our money on the backs of agents in terms of fees—there are no fees at all, and there aren’t any compensation splits, either. Leanne enjoys the diversity that we have on the team and the fact that if she ever has any questions or problems, there’s always someone there to help her.
We also talk quite a bit about technology and how the industry is changing. We’re always searching for the most cutting-edge ways to market and generate leads, which helped LeeAnn get her business off the ground.
Cathryn has been an agent for a long time and has also worked in property management. Before joining our team, she worked with another company but felt that she had gone as far as she was going to go with them. She began to look for another company that offered really good leadership and could help pull her out of the Dark-Age methods of marketing herself and her business.
We’re here to facilitate people’s growth, and we’re not successful unless you, the agent are successful.
She had seen us start our business about 20 years ago and had watched us grow from behind the scenes. When she ended up reaching out to us, she was impressed with what she heard. On top of being a general brokerage, we also do property management.
Cathryn came to us from Burlington, which isn’t a spot we’ve traditionally spent a lot of time. Cathryn really opened our eyes to the growth occurring in Burlington, so we’ve been excited and happy to develop that market. We’ve been thrilled to see how much Cathryn has been able to do not only with property management, but also her general brokerage business.
With all this being said, the Real Estate Experts need help in Burlington. Cathryn is only one person, and we’d love to see more agents come on board to help her develop the market there.
If you’re thinking about making a career change, this is the perfect time of year to do it—the quiet before the storm of the spring and summer market. Visit our website at www.RealEstateExperts.net to meet the team and decide if the Real Estate Experts are right for you.
If you have any questions, don’t hesitate to reach out to us. We’d be more than happy to provide you with answers and to explain why joining our team would lead to your personal and professional growth.
Jodi Bakst, Broker Owner of Real Estate Experts located in Chapel Hill, North Carolina has earned the Certified International Property Specialist (CIPS) designation, placing her among 3,500 elite real estate professionals in over 45 countries. The designation was awarded to her by the National Association of REALTORS® for completing rigorous coursework devoted to learning international real estate practices and demonstrating proficiency in international business.
The CIPS designation is synonymous with advanced expertise, a global perspective, and distinct understanding of a global buyer. As a designee, Ms. Bakst has the knowledge and resources to efficiently work with international buyers, including U.S. residents looking to invest overseas, foreign buyers purchasing in the United States, as well as recent immigrants who might be unfamiliar with real estate transaction practices in the United States.
Today, let’s talk about the things to keep in mind when it comes to replacing your air conditioning unit.
First, what is a SEER rating? Well, SEER stands for Seasonal Energy-Efficiency Ratio, and this basically measures the air intake and outtake of your unit and provides a rating system to weigh how efficiently it runs. Most air conditioners have a SEER rating of around 13 or 14, depending on that state’s requirements, with the maximum being 21.
I’ve personally replaced all the systems in my own home, with the exception of one little unit that is now 27 years old. It still runs, but given its age, I figure that it’s getting to be time to replace it, especially since it’s not all that efficient.
I had my trusted heating and air company come out and look at my systems, but they didn’t even price out a 14 SEER system; they said that a 14 SEER unit would eventually go out, and they instead gave me prices for 15 and 16 SEER units.
That’s when I decided to get a second opinion, but the second company to look at my units didn’t bother pricing out a 14 SEER unit, either. When I asked them why, they told me that a 14 SEER unit was exactly what I needed. The reason they gave me was related to my furnace—it was old, but not so old that it needed to be replaced. It was, however, so old that it didn’t have a variable speed motor.
This second company told me that yes, I could replace my unit with a 15, 16, or even a 21 SEER unit, but if I did, I wouldn’t get any benefit from it. That’s when the bells started going off in my head: The company that I’d been using for 15 years has been withholding information and trying to upsell me!
Since I got two different opinions on what I should do, I decided to get a third and fourth opinion. I posed the same question to companies three and four: “Does a 15 or 16 SEER system match my furnace?” Both companies were completely honest with me and told me no and that I should stick with a 14 SEER system.
Overall, the price for the replacement system went from $5,200 for a 16 SEER system to $3,150 for a 14 SEER—that’s a huge amount of savings!
After that experience, I went online to do some research. I found all kinds of information on the SEER rating, energy efficiency, and calculating cost-benefit ratios, but nothing about matching the SEER rating of a unit to the type of furnace you have.
In the end, if you want the efficiency of a 16 SEER system and you have a slightly older furnace that’s not really ready to be removed, then you’ll actually need to replace your entire furnace, too. Do you want to spend the money to replace two systems when you really only need to replace one?
The moral of today’s story is that you need to ask a lot of questions, even if you’re working with a company that you’ve known and trusted for years.
If you have any questions about this or other real estate topics, please feel free to reach out to me. I would love to hear from you.
A good tenant pays rent on time every month, but sometimes even good tenants run into trouble and your payment may be late once or twice during a tenancy. That’s understandable, but a tenant who chronically pays late is a big problem.
Increase the chances of having your rent paid on time with a solid rent collection policy, consistent consequences, and flexibility in how the rental payments are made. (more…)