What if I don’t know how long I will be in Richmond?
Fair question, but one that only you can answer.
All we can tell you is that each year you stay in the renter pool, you are bypassing wealth building. When you use the last 5 years as an example and looked at what would have happened had you bought the average house in the City of Richmond, you would be about $75,000 to the positive.
But what happens if I buy it and then something breaks?
Well, for one, you are going to get the home inspected. And you can also buy warranties on many of the mechanical items in the house to miniminze the risk to you.
But that said, stuff WILL break.
Nothing in this world is time proof and plumbing leaks, appliances break, roofs get old, and air conditioners die — it is the risk of being an owner. But the last time I checked, the sum total of the repairs pales in comparison to the wealth you can accumulate. Don’t avoid being a homeowner because you are scared of your furnace.
What if the value of my house goes down? Isn’t this another bubble?
The value of your house COULD go down, just in the same way that your stocks, bonds, and funds also rise and fall. But over time, property values have risen — and risen substantially. Even the value lost during the crash of 2008 to 2011 has all been regained.
That said, the reason the last adjustment was so severe was due to incredibly lax lending regulations combined with some really epic levels of fraud. The formation of the CFPB in the wake of the Dodd – Frank Financial Reform Act of 2010 put an end to the illegal activities.
What if I don’t have 10% to put into a down payment?
FHA allows for 3.5% down. VA does 100% loans. VHDA does 100%, too. And Fannie Mae and Freddie Mac have many 5% down programs as well. Don’t let a down payment concern stop you from learning more about how to buy a home.
What if I can’t afford to buy where I want to?
Most people own several homes in their lifetime — mostly in an attempt to move up. And each time they do, they will typically use the equity that they have built up in the prior home to use as a down payment.
In other words, if I buy a home where I can afford and the price rises, I can use the new value, plus whatever debt I was able pay off, as the next down payment. In the example we used on the main page, buyers who bought a $225,000 home in 2013, had accumulated close to $75,000 in additional wealth to use to get them where they want to go next.
My Credit Union has a mortgage department … should I use them?
Most credit unions try to convince you that a) they have special products for you (which is untrue, they actually have fewer) b) that they somehow have better rates (again, untrue. They have the same pricing as everyone else) and c) that they will somehow take care you better (and yes, again untrue, as the mortgage process is very complex and it takes a full time specialist to represent you correctly.)
Just because you have a checking account there, and maybe a credit card, too, does not make it a good choice for your mortgage.
Why do I need a Realtor?
You don’t. You also don’t need a doctor, mechanic, or attorney. But you still use them, correct?
Like any professional, Realtors sell homes for a living and have done it hundreds (or more) times.wA Realtor will make sure you are protected, have all of the information, and understand your choices. They will set appointments, write contracts, suggest other quality service providers (inspectors, attorneys, lenders, etc.), offer advice, and otherwise steward you through your transaction. Zillow and Trulia would have you believe otherwise, but the fact is that a good Realtor is worth far more than their expense. Oh, and when you buy, the seller is paying the commission.
And Speaking of Zillow and Trulia …
Use them at your own risk.
Your Realtor can set you up with a direct link to MLS to allow you to see ALL of the information IN REAL TIME. Zillow and Trulia are not MLS and thus, they rely on a series of somewhat reliable feeds to try to cobble together their information. When the market is moving as fast as it is right now, you need information immediately. Zillow and Trulia do NOT do that well at all.