There has been a lot of chatter lately about interest rates rising.  If you have lots of money invested in C.D.’s, higher rates are a good thing!!  If you are thinking about financing anything (especially something major, like a home) then higher rates are not so good. How all this macro-economics stuff works is far beyond most of us, but what it means in our lives is pretty simple:  Higher rates means higher mortgage payments, and quite often, it means a buyer can afford less house.

So far mortgage interest rates have risen approximately 1% in the past 6-8 months or so from historical lows of around 3.25% to around 4.25%-4.50% today.  The conventional wisdom is that rates will go up another 1% or so in the next 6-12 months; lets look at what that means to a home buyer. If you borrow $100,000 at the current rate of 4.25%, your principle and interest payment will be about $492/month.  The same loan taken at an interest rate of 5.25% has a payment of $552/month – $60 more each month and an extra $21,600 over the 30 year life of the loan.  So higher rates costs you lots more money, and it also may mean you can no longer qualify for the property you want to buy as the lender uses the amount of any loan payment in figuring out the amount that you can borrow.

Now, buying property is far too important a move to rush into.  However, if you plan to make a purchase in the near future, your payments will never be lower than they are today.  If you have questions about interest rates or financing of real estate, contact your lender soon.  If you have questions about the local housing/lake shore/recreational property market or anything that is currently for sale, contact your Johnson Hometown Realty expert today and let us help you find what you are looking for!!!

2402 First Avenue, Hibbing, MN ….. 218-263-4411…..JohnsonHometownRealty.com

The final step in the buying process is our topic for today – Buyer Tip #4 – Writing an Offer!!

A)  Plan on spending 60-90 minutes with your Johnson Hometown Realty expert, especially if you have not written an offer recently.  We want to be thorough and explain all of your options to you so that you know exactly what you are signing and exactly what the process involves.  B)  If you have not yet done so, have your lender forward a copy of your pre-qualification letter to your agent to be included with the offer.  C)  There are several things you need to know prior to writing the offer. Here is a partial list: 1)  How much do you intend to offer?  2) How soon would you like to close on the property? (take possession) 45 days or so is typical.  3)  What type of financing will you be using?  4)  Will you be asking the seller to assist you with your closing costs?  And if so, how much will you be asking for?  5)  How much of a down payment will you be making?  6)  What personal property, if any, will you be asking for?  7)  Exactly whose names are going on the purchase agreement?  (We will need full legal names of each person involved.)  D)  Finally, be prepared to have an earnest money check made out to the listing company to accompany your offer. This is typically made out for $500. to $1000.  These funds are part of your offer, it is not extra money…

Four tips for buyers that will help to make your next property purchase painless!!  Call us ANYTIME with questions of any kind about real estate!!!   218-263-4411.

To keep purchasing property as simple, easy, and low-stress as possible, a buyer should follow 4 simple tips.  Tip #1 was to become pre-qualified through a lender. Tip #2 was to learn what is available that meets your needs and fits into your budget. (See our previous blog posts for details.)

Today property buyer’s tip is Tip #3 – Viewing Suggestions. Going to visit homes/cabins/properties in person can be the most exciting and enjoyable parts of the real estate process!  To keep it fun rather than frantic, follow these suggestions:  A)  Give your Realtor at least a day or two notice ahead of your preferred tour time.  Appointments need to be asked for and approved, renters/owners need to be contacted, and your agent no doubt has a busy schedule, too. (But at Johnson Hometown Realty we ALWAYS do our best to accommodate your needs.)  B)  Wear slip on shoes. Sellers don’t want us tracking water or mud into their homes, and slip ons are quicker and far more convenient for you.  C) Kids….We love kids!!  And they can accompany us on showing tours, but you will need to keep them with you and away from the sellers things to avoid any damage to the property or injury to your children.  Also, it is much easier for you to focus on the features of a home if you do not have to focus on your kids throughout the showing.  D)  Be efficient.  Keep moving.  We typically plan on 15-20 minutes per home on our first visit.  Make the first look a preview and plan to go back later for a second look at any home you really like.  E)  We have found it helpful for buyers to take notes on the property spec sheets during viewings and then to organize those sheets into 3 folders – 1 folder of homes you really like, 1 folder of homes you aren’t sure about but that may work, and 1 folder of those homes you wouldn’t live in if they were given to you for free (and there will be homes in each of those categories if you look at more than a few…) This will make it easier for you to identify the properties you want to take a more careful, second look at, and it will help you remember which homes you have already viewed.

Watch for Tip #4 – Writing An Offer – coming to a blog post near here soon!!

The process of buying property can be difficult, complicated, scary, and stressful…..BUT it does NOT have to be any of these things. To make the property purchasing process go smoothly, follow these 4 simple tips:

Tip #1)  Get pre-qualified through a lender. This process and the reasons for it are covered in a previous blog – “Why Should I Pre-Qualify?” – and in the “Financing” section of the “Buyer” tab of the Johnson Hometown Realty homepage.  After you you have been pre-qualified, it is time to begin actively looking for your new home/cabin/building lot or recreational property.

Tip #2) is our topic for today:  Learn What Is Available in your Price Range and in the Areas you are Most Interested in.  A) Use the “Search Listings” or “Search” link on the homepage of  Johnson Hometown Realty to check on everything currently listed for sale that may fit your needs. B) Contact one of our Johnson Hometown Realty experts and ask to receive an automatic e-mail every time a new property comes on the market or is reduced within your parameters.  C) Begin doing drive-bys to check on the neighborhood, distance, exterior etc of those properties that appear interesting to you. D) Call your Johnson Hometown Realty expert to set up a tour of those properties you think you may like.

Watch for Tip #3 – “Viewing Suggestions” – coming in the next couple of days…..