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Julianne Krutka's Blog

By Julianne M. Krutka | Agent in 01085

The only stupid question is the one you don’t ask!

I was speaking with a friend the other day who is paying almost 900.00 a month for a 400 sq ft apartment.  She was complaining that she was having trouble reaching her landlord about a plumbing issue she was having.  She was willing to foot the bill for the necessary repair, but she couldn’t find a plumber who would do the work without the permission from the landlord.  Why the landlord wouldn’t return her calls is a mystery to her.  Why she would continue to try to reach him is a mystery to me.

I asked her about her apartment complex and she went on to complain about the neighbors, the neighbors kids, the parking situation, the disastrous laundry room issues, the lack of lawn care and yard space and finally about how her rent had gone up twice in the past year!

After listening to her for a few minutes, I asked her why she stays there if she is so unhappy.  She said that she couldn’t afford to move.  Ok, I expected that answer but I asked again why do you continue to live somewhere that doesn’t feel like “your” home?  She was puzzled and asked me what I was getting at.  I said “why don’t you buy a house?”  She laughed and went on to tell me that she’d never be able to afford a home.  Then I laughed and said “have you received that opinion from a professional”?

I went on to explain that if she could afford 900.00 dollars a month for rent, then wouldn’t it make sense to spend that 900.00 on a home that was hers?  She said “of course it would, but I don’t have twenty thousand dollars for a down payment”.  Now it was my turn to laugh and I asked her where she got the impression that she needed that much money to buy a home.

As it turns out, my friend has been tricked into thinking that the only way to buy a home is to have “perfect” credit, a 20% down payment and an income of more than $50,000.  Unfortunately, my friend is not the only apartment dweller who believes in these misconceptions and therefore continues to live in a place where she has little or no control over the space that she pays for handsomely with her hard earned money on a monthly basis.

It makes me feel so sad to think about how many potential buyers are spending their hard earned paychecks building equity for their landlords when they could be spending the same and in some cases even less in owning their own home and building their own equity.

So let me take this time to dispel some of the buyer’s myths that I have encountered recently in my local market…

First, there is a definite difference between “perfect” credit and “good” credit.  When I hear people say “I can’t buy a house my credit isn’t good enough” I ask them “who told you that?”  The answer is always the same…”well, no one” or “I heard it on the news”.  No one has ever told them that their credit isn’t good enough because they have never taken the time to ask.  Why won’t they ask?  What are they afraid of?  They love the idea of owning their own home but they shoot themselves in the foot when they won’t search out a mortgage professional and ask the simple question of “can I qualify to buy a home?”

Second, I often hear…”I can’t afford a mortgage”.  Again I ask, ”who told you that?”  Again I get the answer, “well, no one” or “I heard it on the news”   When I learn that they are paying 900.00 or more for rent I ask if they are able to pay their rent on time and the answer is always a resounding “yes”.  Then I ask them how much they think a mortgage payment would be and then they hem and haw and shuffle their feet and finally tell me “I don’t know”.  It takes everything I have not to just shake my head and sigh.  How on earth can you be so sure that you can’t afford a mortgage if you don’t have any clue how much a mortgage is?  Again, they shoot themselves in the foot when they won’t search out a professional or even get online and find a mortgage calculator to get a basic idea of how much of what they are already affording could be better used towards owning their own home.

The third thing I hear the most when I ask someone why they continue to pay rent instead of buying their own home is “I don’t have the 20% down payment”.  I can’t stop myself from laughing when they say this and my answer is always the same, “neither can I.”  Then I go into the same statements I’ve already made.  I ask who told them they needed that large a down payment and the answer this time is the same as before, “well, no one” or “I heard it on the news.”

Ok, so for those of you reading this who are continuing to pour your hard earned money into someone else’s pocket for the purpose of building someone else’s equity, here are a few things you need to know…

One, you don’t need $20,000 to buy a $100,000 home.  The FHA (Federal Housing Administration) lending program only requires a down payment of 3.5%....in other words $35.00 for every THOUSAND you intend to borrow.  This is not a misprint!  If you want to buy a 100,000 dollar home, you only need $3500 for a down payment!  That’s not much more than the first, last and security deposit that most people pay to get an apartment in the first place.

Two, at today’s mortgage rates at around 5 percent you can roughly figure a mortgage payment of principal and interest would be just over 500.00 per month.  Of course you have to add property tax and insurance to that figure, but it’s pretty safe to say that on a 100,000 dollar mortgage your payments would be not much more than your cost of rent and in many cases could be LESS!

Third and finally, yes, credit is an issue, but if you haven’t spoken with a professional who understands the intricacies of credit scores and how they are viewed by mortgage companies then you really don’t know if you can qualify or not.  So why not ask the question?  Contact your local bank or Real Estate professional, ask them to refer you to a mortgage specialist for the purpose of a “pre-qualification”.  It costs nothing to learn the truth about your ability to obtain a mortgage and there are no obligations to anyone for asking the question “do I qualify” so why not do it?

I hope this information is helpful to you.  If not for your, then maybe for someone you know.  The bottom line is this…you are not stuck where you are unless you allow yourself to be.  A few good questions, directed at the proper professionals who can give you quality answers and you could be living the American dream of home ownership!

Go ahead, I dare you…ask me the questions and if I can’t answer them I can direct you to someone who can!

Have a great day!

Julianne Krutka


email:  Julianne.Krutka@gmail.com

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