Mortgage regulations have changed significantly over the last few years, making your options wider than ever.  Subtle changes in the way you approach your mortgage shopping, and even small differences in the way you structure your mortgage, can literally save you thousands of dollars and years of expenses.

Get the Right Information

Whether you are about to buy your first home or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved.

Industry research has revealed that there are 6 common mistakes that most home buyers make in mortgage shopping that can have a significant impact on the outcome of this critical negotiation.  If handled correctly, these issues could result in a mortgage that will cost you less over a shorter period of time.

Things You Must Know Before Obtaining a Mortgage

Before you commit your hard earned dollars to monthly mortgage payments, consider these 6 issues.  Effective consideration of these important areas can make your payments work much harder for you.

1. You can, and should, get pre-approval for a mortgage before you go looking for a home.

Pre-approval is easy and can give you complete peace of mind when shopping for your home.  Your local lending institution can provide you with written pre-approval for you at no cost or obligation, and it call all be done quite easily over the phone.  More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank.  It entails a completed credit application and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for.

2. Know what monthly dollar amount you feel comfortable committing to.

When you discuss mortgage pre-approval with your lending institution, find out what level you qualify for, but also pre-assess for yourself what monthly amount you feel comfortable committing to.  Your situation may give you a pre-approval amount that is higher (or lower) than the amount of money you want to pay out each month.  By working back and forth with your lending institution to determine what the monthly amount is and what value of home this translates into at today’s rates, you won’t waste your time looking at homes that are not in your price range.

3. You should be thinking about your long term goals and expected situation to determine the type of mortgage that will best suit your needs.

There are a number of question that you should be asking yourself before you commit to a certain type of mortgage.  How long do you think you will own this home?  What direction are interest rates going in and how quickly?  Is your income expected to change (up or down) in the near term, impacting how much money you can afford to pay to your mortgage?  The answer to these and other questions will help you determine the most appropriate mortgage you should be seeking.

4. Make sure you understand what prepayment privileges and payment frequency options are available to you.

More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage.  Structuring your payments so that they come out more frequently will significantly lessen the amount of interest that you will be charged over the term.

For the same reason, authorized pre-payment of a certain percentage of your mortgage, or an increase in the amount you pay monthly, will have a major impact on the number of years you will have to pay and could shorten your payment term considerably.

These two payment options can cut years off of your mortgage and save you thousands of dollars in interest.  However, not every mortgage has these prepayment privileges built in, so make sure you ask the proper questions.

5. Ask if your mortgage is both portable and/or assumable.

A portable mortgage, where available, is one that you can carry with you when you buy your next home and avoid paying any discharge penalties.  This means that you will not have to go through the entire mortgage process again unless you are making a move up to a much more expensive home.

An assumable mortgage is one that the buyer for your home can take over when you move to your next home.  This can be a very powerful tool at the negotiation table making it much easier and more desirable for a buyer to buy your home and saves you and discharge penalties.

6. You should seriously consider dealing with a Mortgage Expert.

Consider dealing only with a professional who specializes in mortgages.  Enlisting their services can make a significant difference in the cost and effectiveness of the mortgage you obtain.  For example, they can make the process faster thereby avoiding costly delays.  Typically there is no cost or obligation to inquire.

As a homeowner, you cannot afford to lose money on the sale of your home simply because you did not take the time to price your home according to its true value.  Under-pricing will leave you full of regret – and overpricing will leave you with a home that has not sold.  Home pricing is a balancing act, because you need to take into consideration not only the true value of the home, but also the local market conditions. Some simple techniques can help you determine the best listing price for your home. These are many of the same things that realtors look for when suggesting possible listing prices, but a wise homeowner will walk into a meeting with a realtor already armed with ideal selling prices, rather than letting the listing agent set a price that may or may not maximize the financial return and get the home sold as quickly as possible. Here Are a Few Key Points to Keep in Mind When Pricing Your Home

• The price that you paid for your home has little impact on the actual value of your home today.  This is particularly true if you have lived in your home for several years or more.
• The profit that you hope to gain from the sale of your home has absolutely no impact on the true value of you home.
• You must remove emotion when determining a fair selling price for your home.  To potential buyers, your memories are not worth a price increase.
• Your realtor’s assessment of the home’s value may or may not be accurate.
• A real-estate appraisal is a good way to determine the ballpark value of your home, but it does not consider the market conditions under which you will be selling your home.
• The value of your home is really determined by the buyers and the amount that they are willing to pay.

Pricing a home correctly carries many advantages for the seller. As stated above, the buyer is the only one who can really tell you what the value of your home is.  Here are some of the benefits that you will achieve when you do the legwork and price your home according to fair market values: Quick Sale Any realtor will tell you that the fastest-selling homes are those which were priced properly in accordance with the local real estate market and the features that the homes offered to potential buyers. Less Updating and Preparation Time If you price your home according to the fair market value and its current condition, there is little need to update or improve your home. Weekend projects like painting and cleaning will still help to entice buyers, but there will be little need for a serious commitment of your time and energy. Agent Interest When the price is right and your home is appealing, agents are much more likely to want to show your home to prospective buyers.  Obviously, the more agents who are interested, the more buyers who will see what your home has to offer. Appropriate Pricing Makes the Home Visible When you price your home fairly, potential buyers interested in purchasing a home in your price range will be able to find your home through internet searches and agent MLS searches. Better Buyer Pool When your home is appealing and the price is fair, agents will bring a better pool of prospective buyers to your home. Greater Likelihood of Getting Your Asking Price Buyers realize that there is little room for negotiation when a home is listed at a fair price that is not inflated.  Therefore, you have a better chance of getting your asking price. Greater Profit for YOU When you price your home correctly, your home will probably sell quickly and for the asking price. Therefore, you stand to make a better profit than if the home were to stay on the market for a long time and eventually sell for much less than an inflated asking price. In addition to the benefits of fair pricing, you need to consider the disadvantages of over-inflating a home’s listing price. These disadvantages can include:

• Fewer showings by agents due to lack of agent interest.
• Fewer interested buyers due to price-range restrictions.
• Appraisers’ concerns that the price is higher than that of comparable properties in your area.
• Overpricing that makes lower-priced homes more attractive, in effect helping other homeowners who have listed their home at a lower price.

To set an accurate listing price, follow these steps:

1. Ask three different realtors to visit your home and provide you with a comparative market analysis (CMA). This report will tell you how much similar homes have sold for in the past few months, and at what price non-selling homes are listed.  In addition, you will learn how long those homes that have sold were actually on the market.
2. Go to several open houses in your area to determine the pricing structure being used by other sellers and to find out what features they are highlighting in their homes.
3. Try to assess a per-square-foot price for your home based upon other recent sales and current listings in your area.
4. Look carefully at the reality of the real-estate market.  By carefully assessing the market conditions, you may be able to determine just what housing price the market will comfortably bear.
5. Remember that pricing your home correctly will mean that you can move out without having to carry the home for several months and subsequently lowering your price in order to sell.

Conclusion If you have read this information carefully, you probably now realize the importance of pricing your home according to the local real-estate market and the types of buyers whom you would like to attract.  You also understand the many benefits of accurate listing prices, and you have an idea of what might happen if you choose to over-inflate the price of your home.  If you are working with an agent who is recommending that you over-inflate the price of your home, carefully balance the advantages and disadvantages of doing so with respect to your specific situation and the timeframe in which you need to sell the home. Careful planning and consideration is your best defense in a buyer’s market.  Once you have done the necessary research, set a listing price that will help you to sell the home as quickly as possible without underselling yourself.

The standard joke is there’s nothing wrong with a new agent that a little experience won’t fix. But that’s not to say that freshly licensed agents aren’t valuable. Much depends on whether they have access to competent mentors and the level of their training. Newer agents tend to have more time to concentrate on you. Some agents with 20 years of experience repeat their first year over and over. Other 20-year agents learn something new every year.

2. What is Your Average List-Price-to-Sales-Price Ratio?

Knowing the agent’s average ratio speaks volumes. Excluding sizzling seller’s markets, a good buyer’s agent should be able to negotiate a sales price that is lower than list price for buyers. A competent listing agent should hold a track record for negotiating sales prices that are very close to list prices. Therefore, listing agents should have higher ratios closer to 100%. Buyer’s agent ratios should fall below 99%.

3. What is Your Best Marketing Plan or Strategy for My Needs?

As a buyer, you will need to know:
• How will you search for my new home?
• How many homes will I likely see before I find a home I want to buy?
• Will I be competing against other buyers?
• How do you handle multiple offers?
• Do you present offers yourself?

As a seller, you will need to know:
• Specifically, how will you sell my home?
• What is your direct mail campaign?
• Where and how often do you advertise?
• Will you show me a sample flyer?
• How do you market online?

4. Will You Please Provide References?

Everybody has references. Even new agents have references from previous employers.
• Ask to see references.
• Ask if any of the individuals providing references are related to the agent.
• Ask if you can call the references with additional questions.

5. What Are the Top Three Things That Separate You From Your Competition?

A good agent won’t hesitate to answer this question and will be ready to fire off why she is best suited for the job. Everyone has their own standards, but most consumers say they are looking for agents who say they are:
• Honest and trustworthy
• Assertive
• Excellent negotiators
• Available by phone or e-mail
• Good communicators
• Friendly
• Analytical
• Able to maintain a good sense of humor under trying circumstances

6. May I Review Documents Beforehand That I Will Be Asked to Sign?

A sign of a good real estate agent is a professional who makes forms available to you for preview before you are required to sign them. If at all possible, ask for these documents upfront.

As a buyer, ask for copies of the following:
• Buyer’s Broker Agreement (is it exclusive or non-exclusive?)
• Agency Disclosures
• Purchase Agreement
• Buyer Disclosures

As a seller, ask to see:
• Agency Disclosure
• Listing Agreement
• Seller Disclosures

7. How Will You Help Me Find Other Professionals?

Let the real estate agent explain to you who she works with and why she chooses these professionals. Your agent should be able to supply you with a written list of referring vendors such as mortgage brokers, home inspectors and title companies. Ask for an explanation if you see the term “affiliated” because it could mean that the agent and her broker are receiving compensation from one or all of vendors, and you could be paying a premium for the service.

8. How Much Do You Charge?

Don’t ask if the fee is negotiable. All real estate fees are negotiable. Typically, real estate agents charge a percentage, from 1% to 4% to represent one side of a transaction: a seller or a buyer. A listing agent may charge, for example, 3.5% for herself and another 3.5% for the buyer’s agent, for a total of 7%.

9. What Kind of Guarantee Do You Offer?

If you sign a listing or buying agreement with the agent and later find that you are unhappy with the arrangement, will the agent let you cancel the agreement? Will the agent stand behind her service to you? What is her company’s policy about canceled agreements? Has anybody ever canceled an agreement with her before?

10. What Haven’t I Asked You That I Need to Know?

Pay close attention to how the real estate agent answers this question because there is always something you need to know, always. You want an agent to take her time with you — to make sure you feel comfortable and secure with her knowledge and experience. She should know how to listen and how to counsel you, how to ask the right questions to find out what she needs to know to better serve you.

If you are searching for Huntsville properties, you have found the right site. Whether you are buying or selling in Huntsville, we are here to help. You can use our Huntsville MLS search to view all Huntsville homes for sale available in Huntsville, Madison, Decatur, Athens and many more local real estate markets..

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