So your a first time home buyer and your buy a home new home in Nutley New Jersey.

1.    Is a home really a good investment? What if I buy and the economy collapses?

Unlike the volatility of the stock market, Nutley real estate is typically much slower to react to a current economic situation, and does not react as radically overall. Also, housing is primarily purchased for shelter. Many people hold their homes during a bad economic period, and then sell when the market improves. Unlike other investments, there is not typically “panic selling” of family residences. Lastly, real estate in the US has traditionally trended upward. Real estate held over time generally produces equity.

2.   I’m confused about what to buy. There seem to be so many different houses around Nutley these days.

Whether you are interested in a house or condo, it is a buyer’s market! Having choices is a good thing, however trying to wade through all the inventory on your own can be daunting. Remember that when you are a buyer, you can hire a Realtor to work for you for free! Years down the road when it is your turn to sell your house, you’ll pay both the selling broker as well as the buyer’s broker. That’s why it’s free for you as the buyer! You never have to sign a buyer’s agency agreement with an agent, however it is to your greatest advantage to have a professional working for you with your best interests as their contractual duty!

3.    I’m afraid I won’t qualify for a mortgage, so I’m afraid to apply for one.

Getting a home loan is still possible. However, it takes the right lender to get the job done well! DO NOT pay up-front for an initial pre-qualification consultation with a lender. You simply don’t have to these days. Once again, find a Nutley Realtor you feel has a good handle on the business of buying and selling houses (find my number and email address at end of this report). I can suggest good lenders to talk to about your specific situation. If one lender can’t get you qualified, perhaps another can. And lastly, if a lender can’t get you qualified today, they can tell you what you need to do to correct the situation. That way you will have a “to do” list and when you’ve completed it, you will be prepared to qualify for a mortgage.  Or maybe we should talk about rent-to-own options.

4.    Financing has me totally confused. I don’t know where to begin figuring out how mortgages work.

Mortgages can be confusing, but … again, having the right Realtor who directs you towards reputable lenders, and having a very knowledgeable loan officer can really make or break your whole purchasing project! I recommend lenders that have YEARS of experience in their field, and also have a vast array of lending programs. A really good loan officer can listen to your specific situation and your unique goals, and match you up with a loan program that is optimal for you. Unskilled loan officers can end up putting you into all sorts of strange lender programs that make them a lot of money, but cost you much more than you needed to spend. This is a serious issue in the entire house-hunting project, and I strongly suggest you call me personally to discuss some options. Matthew De Fede 862-228-0554

5.     What if I start house-hunting and then learn I’m a few thousand dollars short of a down payment? Are all down payment requirements alike?

Once again, there are still many mortgage programs out there. All of them are different. Many low down-payment mortgage programs request the seller pay your closing and pre-paid costs. Some even have the seller “gift” your down payment back to you at close. Lenders are now required to provide a “good faith estimate” which will show all the costs for your specific loan. A good lender will make sure that you fully understand it.  You should fully understand your expenses before you make an offer on a house. There are also additional expenses which you will incur from the day you write an offer to the time you close.  Expenses such as the earnest deposit check, your home inspections, your appraisal, and your homeowners’ insurance are items to discuss in addition to your good faith estimate. A good Realtor will explain all of these anticipated expenses early on in the process. Some of these up-front expenses can be deferred or even reimbursed at close.

6.     What if I put down a deposit on a house and then change my mind after signing a contract?

Don’t sign an offer until you feel certain that you want the house, for exactly what you have written in the offer! Remember that if the seller signs the last page under, “Accepted as Written” it means that you’ve got a deal! That should be a very happy moment, not a time to think about looking at other houses! If there are some major concerns you have about the property at the time you write an offer, you can have your agent put language into the contract that specifies certain contingencies which must be met in order to complete the deal. Home inspections are also an excellent resource for more in-depth information about a home, and even though you will still have to pay your inspector for his work, if something major comes up and the seller’s won’t work with you to overcome it, you can halt the deal at that time! Inspections must be requested at the time you write an offer, so if you and your agent don’t put them in there, don’t expect the seller to do anything in addition to that which is specified in the offer you have written.

7.    I’ve been living in an apartment and don’t know anything about home maintenance and repair.

There’s a funny thing that happens when you move into your first home that you have personally purchased … you discover that puttering around the house, casually tending to this-or-that, can actually be enjoyable! It’s amazing how empowering a little thing like fixing a leaky faucet, or installing a new hinge on the cabinet door can be! I say that from first hand experience, acquired while I lived in my own home by myself after a divorce! It’s also amazing to discover how handy your friends happen to be, when offered some pizza and a “cold one” at the house some afternoon! Your lifestyle changes a bit when you buy a house. You may discover that you no longer look for things to do away from home every chance you get. A lazy Saturday on the porch swing (after you have mowed the lawn, planted your favorite color flowers near the walk, and picked some fresh veggies from your garden) suddenly becomes the ideal weekend event! Instead of leaving the apartment complex to go to your friend’s house for a party, people start coming over to visit your house! Home ownership is good.

8.    What if I buy a home and then find out it’s too expensive for me?

That should not happen. Unlike a landlord who may not care how much of your income is spent to pay the rent, a mortgage lender will consider what percentage of your income goes towards your monthly payments. However, the lender will not put you on a budget, so even though you may qualify for a certain amount, you should take the time to determine exactly how much of your income you can afford for house payments. I don’t mean to be redundant, but once again, chose a good Realtor who will suggest a reputable and knowledgeable lender!! Avoid lenders who tell you not to worry about it as long as you’re qualified for a certain amount. Remember that lenders make their living by finding people who want a loan. A hungry lender can be a scary thing. As for expenses, also remember that currently, interest paid on a home loan can often be deductible on taxes. Also, you are building equity with time and principle payments. All these things should be considered when determining what you can afford.

9.    What if I buy and then don’t like the house, or get transferred out of town and must sell?

Remember that the average American moves every 5 to 7 years. If you move in and do not like your home, sell it and buy something else. While you should be serious when selecting a home to purchase, remember that your first home purchase will seldom be your last, but rather only one stop in a lifetime of home purchases. Traditionally, if you keep a house about two years, you should be able to sell it and break even (typically, a rule of thumb average). As a corporate brat, (my Dad frequently transferred cities, or the head hunters got him for a new company) and later as the wife of someone just like ‘ol Dad, I can tell you that unless you are in a position that specifies that you must be highly mobile and will need to move every year, it is still usually better to buy than to rent, or rent-to-own with an option to buy. Lastly, many Corporations that require you to move, will offer you a nice relocation package that can take care of much of your expenses relating to the sale of your house, or rent expenses! Expenses such as Realtor commissions, closing costs, and “buy out”s if your house doesn’t sell within a given time period, are typical. Sometimes you can even make an additional profit if you can sell your house with your Realtor within a given period of time. If you and your chosen Realtor get your house sold under this particular type of relocation deal, they may offer you an extra percentage, or “reward” amount! MANY young (and even not-so-young) executives I have known feel a bit intimidated about pressing for the Realtor of their own choice to sell their home in a relocation package situation. Just remember this … the “reward” is yours if you select the best Nutley Realtor to get the job done.  And, BY LAW, no one can FORCE you to use a Realtor that is not of your choice! YOUR new boss doesn’t care whom you use as your Realtor! THE RELO COMPANY is only a contracted resource. Though someone tells you that you MUST interview two agents and have two appraisals (or whatever), just accept the direction and say “Okay”, … and by the way, I also want to interview … (Matt) to sell my house, (or help me find a new house or rental)”. Believe me, your new company wants to make you happy! If you are relocating due to a transfer or new corporate position, you should talk to an agent experienced in Relocation deals!

10.    What if I get married after I buy a house?

Your income, your career, your tax breaks, and your best potential lifestyle are what matters most when you select a house. Yes, in Michigan, if you buy a house as a single man and then sell it as a married man, your wife must also sign of her own free will. If you are a woman, don’t worry about it … he doesn’t have to sign.  Other than the free will signature, the rest and the results are best decided by courts and such. I won’t provide any advice on that part of it, because I am a Realtor, not an attorney. If you are concerned about what might happen if you purchase a house and then get married, and then become divorced, you should really find a good lawyer, like the Nikhil Vyas lawyer my wife and I initially used for our first home. As for me personally, I won’t give you advice on that, but I’ll tell you that when I was divorced, the first thing I did was go out and buy my own little house! I was single, but it was mine! I enjoyed all the details of home ownership that I have written about here, and many details I have not discussed. In the end, I remarried less than two years after purchasing the house. I rented it out for another couple of years. And then I sold the house and tucked a few dollars into my pocket when they gave me the check at closing.

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There has been a lot of discussion recently about Millennials – young adults between the ages of 18 and 34 – and when they will begin forming households of their own. For the past few years, the number of first-time home in  buyers in Nutley active in the market has been lower than the historical average and many experts believe this is the final piece holding back the housing market’s recovery. As these young Americans become homeowners, residential real estate will become more stable and balanced, reducing the volatility now seen in the month-to-month fluctuations of the market. Jonathan Smoke, Realtor.com’s chief economist, said Millennials are a critical component of the first-time home buyer market in Nutley and getting that segment of the market functioning again is a necessity for bringing the housing ecosystem back to full health. And, according to new data from Realtor.com, there is growing reason for optimism. In fact, the most recent National Housing Trend Report found that half of all Millennials viewed real estate websites in the last month, indicating high levels of demand. And though tight inventory, rising prices, and saving for a down payment can be a hurdle for young home buyers, many local markets offer affordable opportunities for first-time buyers.

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Buying your first home in Nutley NJ could be scary unless you hire a Professional Agent Like Matthew DeFede

Are you a first-time home buyer in Nutley NJ  eager to get into the market? Here are steps to take to help you decide whether you’re ready to take the plunge.

1. Check the selling prices of comparable homes in Nutley. Do a quick search of actual multiple listing service, or MLS, listings in Nutley on  number of websites, including  www.homesinnutleynj.com (Nutley’s premiere Real Estate Listing site)

2. Use Bankrate’s mortgage calculator to get an idea of what your monthly mortgage payments would be if you bought a home in Nutley today.

3. Find out what your total monthly housing cost would be, including taxes and homeowners insurance. In some areas, what you’ll pay for your taxes and insurance escrow can almost double your mortgage payment.

To get an idea of what you’ll pay in insurance, pick a property in Nutley where you want to live and make a call to a local insurance agent for an estimate. You won’t be obligated to get the insurance, but you’ll have a good idea of what you’ll pay if you do buy. For an idea of what you’ll pay in taxes, check your local property appraisers website. Just remember that exemptions and the intricacies of local tax law can create differences between what a homeowner is currently paying and what you can expect to pay as a new homeowner.

4. Find out how much you’ll likely pay in closing costs. The upfront cost of settling on your home shouldn’t be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items like homeowners insurance or homeowners’ association fees are in Nutley. You can see what closing costs average in your state by looking at Bankrate.com’s annual closing cost survey.

5. Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28 percent of their income on housing costs. Go much past 30 percent and you risk becoming house poor.

6. Talk to reputable Realtors like Matthew DeFede of Coldwell Banker in your area about the real estate climate. Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon?

7. Remember to look at the big picture. While a buying a house in Nutley is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there’s no landlord to turn to, and these costs can quickly drain your bank account.

So consider whether you’re ready for the expense and effort of hom eownership before pulling the trigger.

Prepare for the hunt

If the numbers make sense for you, taking a few steps at the beginning of the home buying process can save you time, money and aggravation.

1. Examine your credit. Right now, blemished credit or the inability to make substantial down payment can put the kibosh on your home ownership plans. That’s why it pays to look at your creditworthiness early in the home-buying process. Get your free annual credit report and comb through it for errors and unresolved issues. If you find mistakes, contact the credit reporting bureau to make sure they are corrected. It’s also a good idea to get your FICO score, which will cost you a small fee.

2. Get your docs in a row. Collect pay stubs, bank account statements, W-2s, tax returns for the last two years, statements from current loans and credit lines, and names and addresses of your landlords for the past two years. Have them ready to show to the lender. This may seem like a lot, but in this age of tight credit, don’t be surprised if your lender needs a lot in the way of documentation.

3. Find lenders and get preapproved. Getting preapproved for a mortgage helps you bargain from a position of strength when you are house hunting. The institution where you bank and a local credit union are good places to start your search. Use Bankrate’s mortgage rates tool to find lenders offering the best rates in your area. Applying to multiple lenders in the same month helps increase your chances of getting a loan approved at the best rate possible without dinging your credit score too much.

4. If at first you don’t succeed, try, try … the government? If you can’t find a bank willing to lend to you — and in the current tight credit market, it’s possible you won’t — consider getting an FHA loan. The Federal Housing Administration has a program that insures the mortgages of many first-time homebuyers. As a result of this guarantee, lenders who might otherwise feel queasy about your qualifications will be more inclined to lend to you. As a bonus, the FHA only requires a 3 percent to 3.5 percent down payment from first-time homebuyers. You can find lenders that work with the FHA in communities across the nation.

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