Is A Condo A Good Fit For You?

I'm often asked the pros & cons of condo living.

There's really no "one size fits all" answer!

I can share some insight with you, because my wife, Amy, and I owned a condo before we had children. We actually moved 4 times in 10 years. Yes, it must have been an occupational hazard. Our first home was a starter Cape Cod. Then we fell in love with a new condo community near Sharon Woods - close where I grew up. Next, our son came and we moved to a 2-story. Finally, after wanting a kid-friendly backyard, we moved to a neighborhood with lots of kids. It's been 10 years here, because we don't want to move our kids. Now that doesn't mean I'm not planning my next move. :)

Now, back to my insights on the pros and cons of condo living:

PROs

• condos are great for exterior, maintenance-free living
• condo fee normally covers landscaping, mowing, snow
  removal, decks, patios, roofs, community features, etc
• if you often work a lot of hours or travel a lot and don't
  spend much time at home, a condo is a great option
• condos are more affordable than houses in many areas
• many condo communities come with a pool, clubhouse,
  tennis and other amenities

CONs

• make sure condo association is financially solvent and
  monthly fees cover maintenance and future reserves -
  every owner is jointly responsible
• make sure you agree with the association rules and that
  they are being enforced - you'll need board approval before
  making any exterior changes to your condo
• if you have large or many pets, there may be restrictions
  on their size or how many you can have in a condo
• proximity to your neighbors depending on how your condo
  is situated - common walls or shared/divided patios or decks
  
  

These are just some of the things to consider when buying a condo.

You also want to make sure that the type of mortgage financing you're approved for is offered for the condo community you're considering. If it's a new community or a community where there's a large percentage of renters vs. owners occupying the condos, then you may need to look at alternative financing.

At your service,

Dan

What questions do you have? I'll gladly answer them at: dan@danweis.com.

Tell a friend about my next Free Home & Condo Buyer Class!

I'm available to help you find your dream home! Contact me for a Free Consultation: (513) 615-1890 or dan@danweis.com

Who Do You Know...?

You've successfully attended our Free Home & Condo Buyer Class.

"Who among your family and friends would also benefit from our class?"

Our purpose for teaching the class is to educate consumers, who plan on buying a home in the near future. We want consumers to be armed with the knowledge that's needed in today's market, so that they don't get scammed by unethical people.

There are many mortgage loan programs out there that are not in your best interests. We can help you decipher which ones can work best for you. We also want to prepare you for the guidelines that you now being put into place with many mortgage companies.

I wanted to let you know that the next scheduled class dates are Jan. 9th & Jan. 23rd.

Please forward this post to your family and friends by clicking on the small envelope with the arrow in it at the bottom of this post.

For more details and registration, go to: Free Home Buying Class.

At your service,

Dan

ARMs Can Be Dangerous To Your Wealth!

In my opinion, most home buyers today should not sign up for an Adjustable Rate Mortgage (ARM), because there are too many downsides to them.

An ARM assumes that you expect your income to continue to increase each year, so that when your mortgage interest rate adjusts, you can afford the additional payment increases.

There are times when you may fall in love with a home and with a fixed rate mortgage, it's just out of your reach financially. Well, a mortgage lender then comes along and says that by getting an adjustable rate mortgage, you would qualify nicely and get what you want. Then you say "Really? Let's do it." Without thinking through what you've just done, you may end up 'being in the desert with vultures flying overhead waiting for you to drop'.

Is that a little melodramatic? Maybe, but too many consumers jump headfirst into an adjustable rate mortgage for the wrong reasons. Lenders will say "Oh, you'll get pay raises, right?" Don't fall for it.

Many buyers are pre-approved for an adjustable rate mortgage based on the initial "teaser" rate that's offered. So what happens in two years when the interest rate adjusts upwards by 2%and now the monthly payments are too much to handle. If you're maxed out, because your house payments are too high, then you don't have any money left over to maintain your home. All homes need to be continually maintained......sometimes it's small expenditures and other times it's major repairs.

I believe that all buyers should be pre-qualified at the higher rate. For example, on a 3/1 ARM, the interest rate is fixed for the first three years and then it adjusts annually for the rest of the loan term. If you have 2/6 CAPS, that means the interest rate can adjust up or down as much as 2% per year, but never go more than 6% above the original rate. So if you have a 5.5% initial rate, after 3 years, your rate could move up to as high as 7.5% and then the next year, it could jump up to 9.5% and the following year, it could go to 11.5%. It could never go above 11.5% though, because of the 6% CAP (5.5% + 6% = 11.5%).

Now would your rate keep increasing by 2% each year? It's doubtful, but it depends on what the financial markets are doing. In this scenario, you should at least be qualified to be able to afford a 7.5% interest rate. In markets like today, I call the initial rate a 'teaser' rate, because it's usually going to increase when it's time for the adjustment.

Most home buyers are not meant to have adjustable rate mortgages. The lending industry has just found another way to get people into homes that they may not be able to afford in the long-term.

I believe you need to be more fiscally responsible and stay with a fixed interest rate mortgage. That way you know that your payments won't go up except for when your property taxes and homeowner's insurance premiums increase...and they do go up over time.

If a fixed rate mortgage means you qualify for a less expensive home than you'd like, then it's done its job. That's the reason for it. You need to live within your means. Many Americans today have lost their homes, because of skyrocketing prices and the only way they could afford the homes was to take out an adjustable rate mortgage (or even worse, an interet-only mortgage).

Don't put yourself behind the eight-ball! While I believe saving for a downpayment before buying a home doesn't usually work to your advantage, the affordability of your monthly payment is crucial. I always tell clients "You don't want to be house-poor." So make sure that you get a fixed interest rate mortgage and live within your means.

Most problems that happen in life revolve around money issues. Don't live a stressed life living in a home that you can't afford. You don't need to keep up with the Joneses.

One other thought: You may even want to buy a home with a 20 year or even 15 year mortgage term, but that's another topic for another day.

When you hire me to be your buyer's agent, I'll help you review your mortgage options to make sure that you're getting the right kind of mortgage that benefits you and not the lender.

At your service,

Dan

What questions do you have? I'll gladly answer them at: dan@danweis.com.

Tell a friend about my next Free Home & Condo Buyer Class!

I'm available to help you find your dream home! Contact me for a Free Consultation: (513) 615-1890 or dan@danweis.com

Look Out For The RED FLAGS...

When you begin your home search, it's important to be very observant when viewing different properties. It's easy to get lured into a property that's cosmetically appealing, yet one that needs a lot of TLC.

Most people try to connect on an emotional level with a property to see, sense and feel if it's the right one for them. That's OK to do, but it should only be the first of two steps when viewing.

Second and more importantly, go through the property again and make a list of potential issues with the property that you'd need to address should you purchase it. What repairs are needed in the short-term? What improvements would you make to the property? Is the landscaping over-grown and not well maintained? How old are the mechanical systems? Does the basement appear to have any water leakage problems?

These and other questions are important to delve into when looking at properties.

Since you don't have your whole house inspection until after you've entered into an agreement with the seller, you need to have an idea of how much you may end up spending on the property in the short-term and that will help you when you make your bid.

At your service,

Dan

What questions do you have about this tip or any other topic?
I'll gladly answer your questions at: dan@danweis.com.

Tell a friend about my next Free Home & Condo Buyer Class!

I'm available to help you find your dream home! Contact me for a Free Consultation: (513) 615-1890 or dan@danweis.com

Stay Alert About Your Credit!

Credit card companies are smart and sneaky! You have to be vigilant and make sure that you're paying attention to all of your credit cards. One mistake can cost you thousands of dollars in the long-term. Credit card companies are looking for you to make a mistake and then they'll be able to raise your interest rate. Here are some things to watch out for:

• Don't pay your bills late or try to cut it too close - it may not get processed in time and then it could show up as a RED FLAG on your credit report allowing the credit card company to raise your interest rate.
• Don't pay extra on one bill if you have others coming up that you may not be able to pay on time.
• Work on keeping your credit score as high as possible - having a low credit score will cost you more in your mortgage, car loans, etc.

Whether it's now, 3 months or one year before you plan to buy a home, sit down with a reputable mortgage consultant and have them run a 'tri-merge' credit report on you. That way you can see if there are any discrepancies on your report and it'll also show you what your credit scores are. If they are in the lower range (where you would only qualify for higher interest rates), then this opportunity will give you time to work on improving your credit score, thus allowing you to hopefully qualify for a lower interest rate mortgage.

Now is the time to develop a plan to increase your credit score. If you have more credit cards than you need, then you can systematically wean yourself off the cards and close the accounts over time. But you need a plan to do this. You can't just do it all at once or you'll really mess up your credit score.

If you have any questions, don't hesitate to contact me. I'm here and I'll be glad to help you.

At your service,

Dan