Getting The Best Deal…
Buying a Home: Getting the Best Deal in a Buyers Market
How can you make sure you get the best deal on a home loan? And how can you make sure you’re not paying too much for your home? Those are the two questions probably on the top of your mind right now. Below are my ideas on how best to protect yourself and make sure you get the best deal possible in what is still at least for the moment a buyers market.
Finding the Right Loan
The best way to go about finding the right loan is to talk to a couple of different lenders to get an idea of your options. Different lenders have different programs to offer, but of course there are a few things they all have in common.
You will find when you are shopping for a loan that one lender may have a lower interest rate, but higher closing costs, or vice-versa. Either way, it may not be a deal breaker. When you apply for a loan, the lender will give you a Good Faith Estimate. This is a break down of the costs involved in getting a loan and the amount you can expect to bring to the closing table. If you get a couple of Good Faith Estimates from 2 -3 different lenders, then you can compare them to one another and figure out what works best for your bottom line.
If you’re looking for a loan with a low or no down payment option, then an FHA or a Rural Development loan may be the way to go. The FHA loan is a government insured loan offered by the Federal Housing Administration. As the credit crunch has made life harder for borrowers, FHA loans have become a very popular option and are offered by many FHA Approved Lenders in the Iowa City area. At present the down payment requirement is 3.5% and the loan can be used to buy a home anywhere in the Iowa City area.
The Rural Development loan is offered by the USDA and is designed to help economic growth in rural areas. (North Liberty as a growing community still classes as a rural area). RD loans do offer a 100% financing option to Buyers – the only 30 yr loan that does right now. There is a 2% funding fee, but this is offset by the fact that there is no mortgage insurance required. There are a couple of lenders in town that specialize in RD loans, although they are not as widespread as those offering FHA Loans.
Avoid Paying Too Much For a Home
What price do you offer a seller? Is the seller’s asking price too high? Is the house priced right? Without research on the market and comparable homes, you could end up losing money. Before you make an offer on a home, be sure you have as much information as possible. You’ll need to know the price that similar homes sold at in the last few months. As a rule of thumb I generally research back about six months, but in the current market more recent is even better if available. There have been a lot of changes in the market in the last six months!
Then there’s the condition of the home to consider and the location. (Here in Iowa City for instance if a home is on the bus line and within easy access of the UI Hospitals, that would have a positive impact on the price). Before you make an offer on a home it’s important to look at the bigger picture to gauge all the different aspects that may have an impact on the price of the home.
These are some of my thoughts on how best to ensure that you get the best deal when you buy your new home. If you’d like to sit down and talk about your options, please contact me through the form on this page, or just call me – Denise at 319-400-0268.
