On Sunday morning, January 6, I attended a seminar for first time buyers presented by Jordan Kadry, senior loan originator at FM Home Loans and Ron Hirschhorn producer at Sky Coverage Inc. insurance. They explained important information in a fact-filled morning. As a real estate broker, I explain these facts to new buyers all the time.
The most important thing to do before you start your house search is getting your financial picture. What is your income, what are your other assets, what is your debt and how is your credit score? Jordan stressed that you should meet with a mortgage broker or banker at least 4-6 months before you start house hunting so you have time to get your finances in order. There are things you can do to boost your credit score and you will need to produce two years’ tax returns and show proof of timely rent payments.
Jordan also explained the difference between pre-qualified and pre-approved. Pre-qualified is meaningless because it is only based on information you give your broker while pre-approved is based on the banker actually looking at all your documents.
The higher your credit score, the better qualified you are to get a mortgage at a good interest rate. Pay down some of your credit card balances and keep your credit card debt under 50% of your credit limit. Do not max out your cards, do not close a card and do not open any new cards. Also, don’t make any large purchases charged to your credit card. Now is not the time to buy a car or go on a fancy vacation.
He also mentioned title insurance, which guarantees your ownership of the home and insures you against any liens or other encumbrances to the sale.
Make sure that you have enough income to cover your closing costs, your monthly mortgage payments plus your usual expenses and have a certain amount in reserve. You must know that if something breaks, you will be able to fix it and the bank wants to know that repairing something won’t interfere with your ability to make your monthly mortgage payment.
Ron Hirschhorn explained why homeowner’s insurance is so important. It covers you when certain things break and for major catastrophes. You need to discuss with your insurance broker the best policy with the best coverages at the best price.
The most common claim that homeowners make on their insurance policy is for water damage. Floods, leaks, or burst pipes can happen and you must be covered. You need liability coverage too so if someone falls on your property you are covered. He also explained why an umbrella policy in addition to the regular homeowner’s policy protects you from third party law suits.
Finally, Amira Rubin, “matchmaker for your home,” spoke. She is an agent at Astor Brokerage and explained how she is here to help buyers make good, informed decisions when buying a house. She also gave out a flyer that explains the importance of budgeting for the appraisal, the inspection, your lawyer’s fee, additional closing costs and moving costs.
Finally, as a realtor, I will tell you that the winter is a good time to buy a house. Anyone who is selling a house during the winter is a very motivated seller and that goes for buyers as well. Both sides need to move and will probably be more flexible in their negotiations. An amicable transaction is a win-win for both sides and it can be done. We are all here to make your dream of homeownership come true.
(This article originally appeared in the Five Towns Jewish Times)
By Chanita Teitz