Real Estate Information Archive

Buying a new home comes with financial risks, no matter how ready you are. There's liability, increased cost of living, unexpected stress, and more time commitments. Yet the benefits are equal to the risks. Owning a home can also be a good way to build wealth.

Here are 5 basic financial tips you need to know if you plan to buy a home in Albuquerque.

Prepare Before Purchasing

You've probably noticed by now how fast homes come and go on the Albuquerque real estate market. This might make you feel that you have to jump on a home before you're ready. But you need to prepare before you start making offers on homes.

Get your finances in order. This includes paying down outstanding debts, setting an accurate budget for daily living, and having a clear picture for what you can truly afford. Once you've done this, take the time to save for a larger down payment. Zero-payment down loans and small down payment loans are out there, but they come with many strings attached. There will always be opportunities to buy later, when you're ready.

More Square Footage = Higher Cost Of Living

Considering buying real estate to increase your living space? Besides the added cost to your monthly mortgage payment, plan for increases in these bills as well:

• Homeowners Insurance
• Heating and cooling costs
• Larger heating and cooling unit maintenance
• Water for home and lawn maintenance
• Electricity
• Larger appliance repairs
• Property taxes
• Home furnishings and renovations

Budget For Unplanned Repairs

On top of your increased cost of living, you also need to consider the cost of unplanned repairs. How do you plan for a repair you don't know about yet? 

Home repairs will be needed on a regular basis. The cost for these repairs will vary widely. But especially with a larger home, you will need to plan on high repair costs as cooling, watering, plumbing, electrical, roofing, etc. are all more extensive systems. While planning your finances for purchasing real estate, add into your budget a savings for home repairs.

Regularly Inspect Major Appliances

It's a wise idea to set aside money to regularly inspect major appliances like water softeners, water heaters, home heating and cooling units, and more. Doing so will save you money on huge repairs later, and keep your home running more smoothly.

Build Equity With Larger Mortgage Payments

Many home buyers in Albuquerque will go with a 30-year mortgage as it costs less per month. But you end up paying a lot more interest this way over the term of the loan. The ideal route for purchasing a new home is with a 15-year fixed rate mortgage (unless you have cash, then forget financing!). If that isn't possible, making an additional mortgage payment at least once a year can help to dramatically lower the interest you pay on the overall loan.

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Learn More!

 easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

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Many first time buyers struggle with saving enough for a down payment. But one creative way to save that money is gaining traction - crowd sourcing. It's a great way to let friends and relatives help you buy your first home.

Here's how it works. When a young couple gets married, they will invite the wedding guests to skip the usual gifts and instead contribute to a “Down Payment Fund." Usually a newly wed couple already has the items they need for a new home, as they have their own furniture and home items. Now all they need is the new home.

When you see the math, it makes it even more clear why this is such a great idea. For example, if you have a wedding have 120 guests who all give gifts of about $186 (the average price), then you would have over $22,000 for your down payment! That would cover a 10% down payment on a $220,000 starter home. Not bad! This is just an example, and real world result certainly vary.  But it shows how much this can help a new couple on their way to buying their first home.

Services are already in place to make this all happen, such as a company called HomeFundMe. Friends and family can easily and safely contribute to the fund.  Plus the ones contributing can decide if their gift is  ‘conditional’ or ‘non-conditional’ on the beneficiary buying a home.

According to a recent Wall Street Journal article report, “about 400 borrowers have used HomeFundMe to help buy homes since the program launched in October and on average, they raise about $2,500.” The article goes on to show that these funds are used by the borrower along with their own savings to help them reach the down payment.

Another thing that helps first time home buyers is that they can take advantage of programs from Fannie Mae and Freddie Mac that lets them put down as little as 3%.  Also, FHA programs require as little as 3.5%, and VA Loans are often approved with 0% down!

Gone are the days when you had to come up with a whopping 20% down. And with this creative solution, now even more first-time buyers can make owning a home a dream come true.

HOT HOME LISTING OF THE WEEK!

2228 Cebolla Creek Way NW, Albuquerque, NM  $397,000

3 Bedrooms/ 2 Bathrooms (1 full, 1 partial) / 2345 Square Feet

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If you’re getting ready to buy a home in Albuquerque, you need to know as much as you can.  If you’re looking for a mortgage that lets you put down less than 20%, you’ll notice a lot of programs out there that lets buyers purchase homes with less than 20% down. But do you know about Private Mortgage Insurance? Not everyone knows about this insurance policy called Private Mortgage Insurance (PMI). What exactly is this policy and how can it protect you when buying a home in Albuquerque?

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

According to the National Association of Realtors (NAR), the average down payment last for all home buyers across the nation was 10% and 5% for first time buyers. The average for repeat buyers was 14%. That means that Private Mortgage Insurance didn't stop many home buyers from buying homes.

Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:

The larger the down payment, the lower your monthly housing cost will be, but Freddie Mac has this advice:

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

If you're looking to buy a home in the Albuquerque area and have questions about buying now or saving for a larger down payment, feel free to contact us to help you decide what works best for your situation. You can also search for your dream home now using our convenient home search tool. And make sure to follow us on Facebook for the latest real estate updates for Albuquerque and the surrounding areas.

HOT HOME LISTING OF THE WEEK!

8520 Hawk Eye Road NW, Albuquerque, NM  $260,000

3 Bedrooms/ 3 Bathrooms (2 full, 1 partial) / 3486 Square Feet

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Self-made millionaire David Bach has written nine consecutive New York Times best-selling books. His book, “The Automatic Millionaire,” was on the New York Times bestseller list for a whopping 31 weeks. In fact, he is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

In a recent CNBC article, Bach explained that: “The biggest mistake millennials are making is not buying their first home.” Then he said that, “If you want to build real financial security, real wealth for your lifetime, then you need to buy a home.”

Bach went on to explain why buying a home is so important:

“Homeowners are worth 40 times more than renters. Now, that first home doesn’t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but that’s how you get started.”

 “Don’t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).”

What will it cost to pay your mortgage in fifteen years? Here’s what he had to say:

“For fifteen years, you got to brownbag your lunch. Think about that! Brownbag your lunch literally for fifteen years. You can retire ten years sooner than your friends. You’ll have real wealth, because you bought a home – you’re not a renter. And you’ll be financially secure for life.”

If a well-respected millionaire gives advice, it’s usually a good idea to follow it.  But of course, he’s not the first person in the know to advice on the wisdom of buying a home. Many successful individuals have found that over time, buying a home is the most advisable course toward financial security.

As an additional note on David Bach’s experience, he has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, Washington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes. Not a bad resume!

If you’re ready to buy a home in Albuquerque, you couldn’t have found a better city to buy a new home! Give us a call at 505-263-2173 to talk to an experienced agent. And if you don’t want to talk to someone just yet, you can browse our website for the latest real estate on the market.  And make sure to use our powerful home search tool to find the home of your dreams in Albuquerque.

HOT HOME LISTING OF THE WEEK!

522 Palo Alto Drive NE, Rio Rancho, NM  $320,000

4 Bedrooms/ 2 Bathrooms (1 full, 1 partial) / 2960 Square Feet

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If you live in Albuquerque and are on Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, you may have wondered if buying a home is attainable.  Perhaps you’ve wondered if merely owning a home may affect your benefits, making home owning nearly impossible. The fact is that many people living on SSDI and SSI benefits do qualify to buy a home, and it’s possible that you can as well. But as you can guess, there are obstacles to think about.

What are some of the challenges? As you know already, the benefits for SSI are low, and you will probably struggle to save for a home while trying to make ends meet.  And if you live on SSDI benefits, you may not be sure how long those benefits will last.  So when you go to apply for a loan, it may be difficult to prove you have a stable income.

Another factor to consider is that SSI rules limit how much income and assets you can have while receiving benefits.  So that creates a fine line between making or having enough to save for a home and keeping your benefits. Here’s the good news though:  the home is considered your primary residence, and not an asset.

All of this is not presented to discourage you from buying a home in Albuquerque. It may seem almost impossible to buy a home if you are on SSI or SSDI, but it’s not. There are a number of programs that can help.  For example, Fannie Mae offers loans for people with disabilities.  Here’s some examples:

• Fannie Mae loans for disabled individuals
• Individual Development Account (IDA)
• Habitat for Humanity
• Housing and Urban Development (HUD) Homeownership Voucher Program

There may also be some nonprofits in Albuquerque that can help as well.

The bottom line is that if you are on SSI or SSDI and are considering buying a home in Albuquerque, give us a call at 505-980-2999 to see how we can help you find assistance.

HOT HOME LISTING OF THE WEEK!

10 Tres Amigos Road, Placitas, NM  $399,000

3 Bedrooms/ 2 Bathrooms (2 full, 0 partial) / 2200 Square Feet

This stunning Placitas Custom Home offers a secluded .97 AC Sanctuary w/breathtaking views. Open & spacious floorplan featuring a dramatic entry way into a cozy living space. Warm & inviting property in a highly sought-after location. Fabulous access to hiking & biking.

Contact the Sandi Pressley team for additional details! 

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According to report released by Down Payment Resource, 61% of first-time homebuyers purchased their homes with a down payment of 6% or less.

The trend continued among all buyers with a mortgage, as 73% made a down payment of less than 20%.

An article by Chase points to a new wave of millennial homebuyers:

“We teamed up with Google to help us better understand what customers are searching for and how the home buying landscape is evolving. We found that millennials and first-time homebuyers are making a big splash in the market, and affordability remains top of mind.”

Among millennials who purchased homes, David Norris, Loan Depot’s Head of Retail Lending, said:

“It’s clear from the survey results that Millennials have a lot of anxiety built up about the home buying process.

There is good news, however, as there’s more flexibility than most Millennials think regarding how to qualify for a loan and what’s needed for a down payment.”

Are you one of the many millenials looking to buy a home this year?  If so, we can help.  Call the Sandi Pressley team today to see how we can help you fulfill your dream of owning a home today!

HOT HOME LISTING OF THE WEEK!

996 Lynx Loop NE, Albuquerque, NM  $595,000

3 Bedrooms/ 3 Bathrooms (2 full, 1 partial) / 3215 Square Feet

Custom Home features INCREDIBLE VIEWS of the Sandia Mountains, Tram & City lights from large balconies and decks. Master Suite features cozy fireplace, tranquil balcony, mountain views, complimented by the Spa-like Master Bath.

Contact the Sandi Pressley team for additional details! 

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It's been all over the news. Of course you’ve no doubt heard about the massive data theft of 143 million consumer’s personal data from Equifax.  The problems this theft will cause could affect a lot of lives.  It could especially affect home buyers and mortgage applicants.

It’s likely that an enormous sensitive information was stolen from most Americans with credit, including addresses, Social Security numbers, driver’s license and credit card numbers.  These could be made available to the highest bidders. 

Those at the highest risk may be home buyers and mortgage applicants. This is because they have a significant amount of information on file at the credit bureaus. This could cause serious problems down the road, especially during the buying process.

There’s no need to panic, as steps can be taken to protect yourself.  You can lock down your credit files with fraud alerts or credit file freezes, which will prevent people from opening accounts in your name and will prevent them from getting credit reports.

The FTC has helpful information on identify-theft countermeasures at consumer.ftc.gov/features/feature-0014-identity-theft. And if you’re thinking of doing a freeze, a good site is uspirg.org/resources/usp/protect-yourself-against-new-account-id-theft. You can also get free, three-bureau credit monitoring service being offered by Equifax at equifaxsecurity2017.com. The most important first step is to check your three credit reports for free at annualcreditreport.com and see whether anyone has been tampering with your accounts.

HOT HOME LISTING OF THE WEEK!

6640 Santo Lina Trail NW, Albuquerque   $279,000

3 Bedrooms/ 2.5 Bathrooms/ 2670 Square Feet

Oversized corner lot w/Unobstructed views of the City, Bosque & Mountains along the Bosque in gated community. Close to to beautiful & scenic walking & bike paths!

Contact the Sandi Pressley team for additional details! 

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Owning a home has many advantages and benefits.  One of the best things about owning a home is avoiding rising rent costs. 

The cost of renting is going up across the nation.  According to ConsumerAffairs “The cost of putting a roof over your head continues to go up. Not only are home prices still rising, but the cost of rent rose 0.5% in June.” The Joint Center for Housing Studies at Harvard University’s 2017 State of the Nation’s Housing Report also noted that “Renters continue to be more likely to face cost burdens…the number of cost-burdened renters (21 million) considerably outstrips the number of cost-burdened owners (18 million) even though nearly two-thirds of US households own their homes.”

With a 30 year fixed rate mortgage, owning a home can be cheaper than renting. Many people feel they can’t afford to buy a home because they haven’t saved enough money for down payment, or they don’t have good enough credit.  But you don’t know until you investigate the options.  If you’re considering buying a home in Albuquerque, give us a call and let a professional help you determine if you’re in a position to own your own home and not get stuck in a rental trap.

HOT HOME LISTING OF THE WEEK!

10 Cinco Circle, Placitas, NM   $550,000

5 Bedrooms/ 5 Bathrooms (1 full, 4 partial) / 4015 Square Feet

Enjoy the extraordinary views from this spacious home, featuring 5 bedrooms, 2 living areas, and more.  Treat your guests to the upstairs bed with en suite bath.  Entertain in style with the spacious kitchen that opens into the great room.  

Contact the Sandi Pressley team for additional details! 

Get your Morning Inspiration with the Sandi Pressley Team