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The Pros and Cons of New Construction Homes – Chantel Ray Real Estate Podcast
Do feel weird about buying a house that other people have already lived in? Or maybe you’re just ready to build a dream home YOUR way?
In this podcast episode our Principal Broker John McLaren and incredible agent Jimmy Ray breakdown what you should know about new construction homes and the benefits of buying almost new homes.
If you’re looking to buy a home, we would love to help you start the process.
Choosing a Housing Budget
Deciding on a Realistic Housing Budget
When the time comes to purchase real estate and enter the ranks of homeowners, there is plenty of work to be done before signing the papers and moving into your new home. Deciding on the proper budget to balance your needs and preferences in a home with your available income is the first, most vital step to ensuring your financial and personal future. The biggest mistake that many first-time buyers entering real estate markets throughout the country make is to leave the budgeting of mortgages solely to banks and lenders. Doing affordability calculations on your own will help you avoid the pitfalls of financial constrictions, and, possibly, improve your quality of life for the foreseeable future.
The bank may not be able to see the entire picture when calculating your mortgage payment.
Your mortgage lender will have access to information about your monthly payments and other obligations such as child support or alimony. They’ll also be able to calculate the four major portions that will combine to create your monthly home payment including property, interest, taxes and insurance, but there are other expenses to consider before entering into a fifteen or thirty year mortgage agreement. According to Investopedia, you should begin by calculating your household’s total take-home pay. This amount is the base for your monthly expenditures, and it is important to beginning your search for a new home.
Deduct your monthly expenses from your total take-home pay to find out how much house you can afford.
You should keep a running record of recurring monthly expenses to help you balance your budget over the long-term, but, if you haven’t already, check your bank statements, check book and credit card statements to determine an average for the past six months to a year. Remember to add in the utility costs of a new home, which may not have applied if you’re moving out of an apartment into your new home. The electric bill, gas bill, water bill, cable bill, phone bill, car payments, car insurance and even student loans should all be estimated and included to help give you a better idea of the amount of money you’ve got available each month.
Decide on a down payment that fits into your savings. A larger down payment could save you big bucks in the long run.
The down payment is the amount of initial equity that you’re willing to throw in to show the lender that you’re serious about fulfilling your payment requirements. A large down payment will decrease the amount of loan you’ll need, and you can even avoid the need for private mortgage insurance (PMI), which can add a substantial fee to your mortgage payments each month. If your savings aren’t substantial enough to cover a down payment of at least 20 percent, you may need to account for PMI premiums when budgeting for your home. The added costs will bump up your monthly payments for the first portion of your repayment cycle.
Keep your total monthly payments, including your new home, at less than 36 percent of your available income to increase your chances of getting a mortgage.
According to The Nest, your new budget should leave plenty of room for savings to improve your financial outlook upon the purchase of one of the great residences available on the market. When your new budget is complete, compare it to your monthly income to determine the price range in which you feel comfortable. If you’re not sure about the numbers, ask an independent party, such as an experienced realtor, to look them over and advise you on the best way to proceed. Beginning your housing search with a clear budget and reasonable expectations will help you see the differences between a home at the bottom of your budget and a more expensive offering. Avoiding the pitfalls of unrealistic expectations and short-sighted planning, your housing search will prove to be more rewarding and, ultimately, more successful.
Ensure a happier financial existence by doing your due diligence before beginning a home search. With a little work, and a little help from the experts, you’ll be able to find the perfect home to suit your lifestyle needs without blowing your budget and jeopardizing your financial future.
Chris J. is a writer whose interests include Dallas homes for sale, technology and hanging out with his cat.
Fun things to do in Virginia Beach!
When people are moving to the area, we are often asked, “What fun things are there to do in Virginia Beach?” We have compiled several fun activities below for you to check out!
For the kids:
- Virginia Aquarium & Marine Science Center: This is a great place for kids! There are many exhibits for them to see as well as hands on exhibits where they can touch the animals. They will get to see everything from sharks, turtles, fish of all varieties and even a sea turtle nursery! The museum always has activities going on providing a great learning experience for the little ones. They also have an IMAX theater where you can see special movies on the larger than life screen. This is a must visit!
- Ocean Breeze Water Park: This water park as everything for kids of ALL ages. It has several rides, a kiddie play area, lazy river and with its giant wave pool, everyone can have fun! It also has a motor park that includes go carts – which is great for a full day of fun!
- Mount Trashmore: What was once a giant landfill pile has now become a major attraction in Virginia Beach. This park encompasses 165 acres and boasts a large play area for children. The hills themselves will give hours of fun, but there is also 2 ponds, walking trails, and a skate park. You won’t want to miss this!
For the adults:
- Parasailing: Get to see the entire oceanfront from high in the sky as you parasail over the Atlantic Ocean. This is a great way to beat the heat of the summer and get a birdseye view of the city. Make sure you keep your eyes open – you may see a pod of dolphins swimming beneath you!
- Virginia Beach Boardwalk: There is so much to see along the Virginia Beach boardwalk. It is lined with restaurants and shops of all kinds. You can hop on a bike or take a stroll. During summer evenings, there is often entertainment on the boardwalk with makes for a nice night out with friends!
- Sportfishing/Deep Sea Fishing: Being located on the Atlantic Ocean has its advantages. You can hop on a boat right here in Virginia Beach and head off the coast to catch some fish. Depending on which charter you choose, you may score a swordfish or tuna!
For all ages:
- Beach: Here in Virginia Beach, we are blessed with miles and miles of beach! Pick your favorite spot along the oceanfront or bay and enjoy a day in the sun! The sky is the limit, but the kids are sure to have fun building a sand castle.
- Back Bay Wildlife Refuge: Jump in a kayak or hike the trails of Sea Shore State Park, the views will be breathtaking! This is a great way to get up close and personal with the wildlife here in Virginia Beach!
How hard is it to get pre-approved?
Most people think getting pre-approved for a home loan is a long drawn out process that takes forever – which isn’t true! You can get pre-approved over the phone in 15 minutes. They will ask for a few pieces of information that will give them the information they need to issue a pre-approval.
Once pre-approved and you are under contract with a home, the actual approval process takes place. This is where they will collect information from you like pay stubs, tax returns and bank statements to fill in the gaps they need from the pre-approval process. Once all of the information is received, the loan goes to underwriting where they make sure you qualify for the loan and all of the documents are in place to purchase the home. They may ask for a few other items, but this is almost the end of the process. Once the loan comes out of underwriting, the loan gets the clear to close and you can move forward to close on the home. The entire process from going under contract to closing takes 30-45 days – depending on the type of loan.
But to be pre-approved – that only takes 15 minutes of your time!
I just got military orders and I’m underwater in my home – what are my options?
Here in Hampton Roads, we have an abundance of military families in our area. With orders to move coming out frequently, we get a lot of calls asking what do they do when they are underwater in their home and they have to move.
A short sale will be their best option in this case. Because they have received military orders, the government has programs that can help forgive the debt they will owe due to the short sale. We always recommend our clients speak to an attorney who specializes in short sales before making any decisions. We have found that this options allows them to sell their home and move to their new location with the least amount of hassle.
If you are facing a situation like this, we have an in house short sale negotiator and a relationship with an experienced attorney that can answer any questions you may have. Just give us a call: 717-1003.