First Time Home Buyer Alert

Are you a first time home buyer?  Have you been on the fence on whether this is a good time to buy a home in Florida? You need to read this first time home buyer alert.  Mortgage rates have been on the rise for the last two months.  The mortgage rates have gone up almost a full percentage point since Bernanke’s last comment on Fed Tapering asset purchases in May 2013.

What does that mean to the average first time home buyer in Florida?

Taking into account average purchase price of $175,000.00 with buyers obtaining an FHA loan, this would result in an increase in monthly payment of $99.28 compared to a first time home buyer purchasing a home 2 months ago. You don’t want to get yourself in the nickel and dime game by waiting for the rates to go lower.  Instead, take advantage of the still historical mortgage rates compared to the last decade.

Why are first time home buyers paying more to buy a home in Florida?

Home prices are on the rise due to economic improvements and inventory shortage of Florida homes that are not a short-sale or bank-owned.  Low rates and low inventory have created a market of multiple offers on homes that are not short-sales.  If that’s not bad enough, we are seeing first time home buyers paying more than the appraised value of a home just because they are afraid that they will not find another property fast enough.

The fact is, most first time home buyers have been burnt on losing their opportunity to buy a home at a steal because they have been outmaneuvered by large hedge funds and cash investors.  It’s stupid, because money is money.  If you have been pre- approved for a mortgage then why shouldn't the sellers/banks accept your offer? Part of it may be the fact that there are less good mortgage brokers left and the large lenders are understaffed and overwhelmed by mortgage applications due to these low mortgage rates.  As a result the sellers and banks seem to take lower cash offers instead of worrying about financed buyers meeting closing deadlines.

Are we seeing another real estate bubble in Florida for first time home buyers?

It isn't likely based on current mortgage lending guidelines and regulations.  The fact is, since the appraisal process has become a completely independent process without the influence of mortgage originators and real estate agents, it becomes practically impossible to inflate the value of a property. This helps avoid a real estate bubble based on overvalued home price appreciations in Florida.

Here are some helpful tips for a first time home buyer purchasing a primary home:

1. Calculate your mortgage payments on your dream home based on what you can handle as a household on the worst economic case scenario. For instance, realistically, a married couple may want to base their mortgage payments on one person’s income. This will provide peace of mind in case of job loss.
2. Make sure you have an experienced real estate agent assisting you during the home search and offer phases. Don’t use an agent that tries to push you into a more expensive home rather than what you are really comfortable paying.  Remember, the higher the purchase price, the higher your mortgage payment will be.
3. Choose an experienced local mortgage broker that has a good rating with the BBB and great online customer reviews.  Your mortgage is one of the biggest financial commitments you will probably make in your lifetime.  Be sure to choose a mortgage that best fits with YOUR short and long-term goals.