Do You Need Private Mortgage Insurance?

Do You Need Private Mortgage Insurance?

Recommendations To Help You Search For And Purchase A Home

by Luke Fields

The process of buying a home is a detailed process that starts with your mortgage approval, then the home selection process with your real estate agent, followed by contract negotiations and closing the transaction with an attorney or title company. The following provides you with some tips and recommendations that you can use as you search for and prepare to buy a home this winter.

Evaluate the Market

Anytime you enter a market to make a purchase, especially a large one, you can complete some research to help you understand the recent sales, prices, and market activity. For example, if you are buying a new vehicle, you will research the vehicle's cost and prices and try to understand how much mark-up you may encounter at a dealership versus buying a year-old vehicle from a private owner. A home is no different, as there are fluctuations in the market, and the prices will increase as demand for homes increases. If there is a huge demand for real estate and buyers are competing for homes in bidding wars, this will help you prepare to act quickly and with your best offer when you find a home you want to purchase. 

Work with your real estate agent to look at home market sales statistics and evaluate how long homes are sitting on the market. Also, look at how much homes are selling for in relation to their list price. If you find that homes are remaining on the market for several months and are selling for $10,000 to $20,000 less than they are listed for, this is indicating a soft market. You can go into the market knowing you have the time to closely evaluate your purchase decision and negotiate with the seller for a good sales price. You can also expect to ask for specific contract contingencies included with the sale, such as the seller to pay your closing costs, a home warranty included in the sale, or specific inclusions with the home's sale. 

Complete a Home Inspection

Once you have evaluated the market and found a home that you have made an offer to purchase, you will need to complete some due diligence tasks to protect your position as the buyer. When you buy a home, you already have a good idea of the home's condition, appearance, and the types of appliances in the home, but you may not be aware of what condition the home's underlying features have, such as the roof, attic, plumbing, electric, or its foundation. These areas of the home are important, but you may not have the knowledge to inspect them prior to the sale. 

Hiring a professional home inspection is a smart decision, as they will complete the inspection for you thoroughly and report to you details and factual data of their findings. This will be included in their inspection report, which will include photos and also videos to illustrate any problems present. An inspection report provides you the information to decide to renegotiate the home's purchase and its price, or request repairs made to the home.

For more information about homes for sale, contact a local real estate agent.


About Me

Do You Need Private Mortgage Insurance?

Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.