Sunday, December 9, 2012

FAQ: What's My Payment?

When purchasing a home, most people (especially first-time buyers) are dealing with numbers that they never had imagined up to this point in their lives.  Looking at a price tag of $100,000 or $200,000 is almost demoralizing if you do not understand the concept of a mortgage/ payments/ rates etc...

For my listing on Royal Tern Crossing, I asked Jon Sadler of Bank of America to put the form you see below together to give a prospective buyer a better idea of what the price tag really meant to them.

Click the image to enlarge

Seeing $113,900 (the price has been reduced since the production of the flyer!!!) is not what most buyers want to see most in the end.  What a buyer should be looking at, among other things, is the monthly payment.  $113,900 is spread over 30 years, it is the monthly payment that is often the best gauge of what you can afford and what you cannot afford.  (note:  there is far more than a monthly payment to a mortgage... monthly payment just offers more familiarity to most buyers that I cross paths with)

To a seller, every penny makes a difference because it is the price they are getting out of the home.  To a buyer, the most important things are the rates they can get that contribute to the monthly payment.  $1000 to a seller is $1000, whereas $1000 to a buyer may only be $10 or so a month (obviously this number is dependent on the price of the home).

So as you, the buyer, look for houses for sale... don't let a couple thousand on the price tag make your decision for you.  Use the pre-approval process to determine your top dollar, and then find yourself a house you love and let your agent negotiate on your behalf to get you the best deal.

Take care,
Scott Morrison

Click here to search for a house for sale in Gahanna Ohio

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