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Columbus mortgage tipsFor most Columbus home buyers, the 30-year, fixed-rate mortgage is the loan of choice. The long repayment period makes home ownership more affordable, enabling you to buy more home for the money. But before you lock in 360 consecutive mortgage payments, you should give consideration to the 15-year term.

A 15-year fixed-rate mortgage will save you interest expense over the life of the loan. The interest rate on a 15-year mortgage is generally lower, and the faster amortization helps you build equity. If your goal is to own your home free and clear, the 15-year mortgage helps serve your plans.

The downside: the principal and interest portion of your monthly payment will be much higher than a 30-year mortgage. Once you are committed to this higher payment, there’s no turning back. (Unless you are able to refinance into a longer term mortgage, or sell your home.) 15-year mortgages work best for those who have confidence in their income consistency and financial reserves.

Here’s a comparison of a 15-year mortgage vs. a 30-year mortgage on a $300,000 principal balance. Please keep in mind that these examples are for illustration only; the difference in rates between the two mortgage terms can be greater or lesser, depending on conditions in the financial markets. The actual rates you are offered by a lender depend on your personal creditworthiness.

15-year fixed-rate mortgage, rate of 3.875%, loan amount of $300,000:

  • $2,200.32 principal and interest payment per month
  • $96,057.23 total interest over life of loan

30-year fixed-rate mortgage, rate of 4.25%, loan amount of $300,000:

  • $1,475.82 principal and interest payment per month
  • $231,295.12 total interest over life of loan

While the 15-year mortgage saves interest expense in the long run, homeowners who plan to sell in 7 or 8 years may not be concerned about this issue. Also, the hefty monthly payment on a 15-year mortgage can be unfeasible for buyers who need the lower payment – and leveraged buying power – of a 30-year mortgage.

Home buyers who take out a 30-year mortgage can save interest and pay off their loan sooner by making additional payments to principal. This gives you the flexibility to pay down the mortgage faster as your cash flow allows. We’ll be happy to refer you to local, trustworthy lenders who can explain all of your mortgage options!

Which mortgage term is right for you? We will help you explore the answer! As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Exclusive Buyer’s Broker, CEBA-M, MCNE, CSP, PSA,e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services, www.buyershome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

first time home buyer regretsBuyer’s remorse can affect any home buyer. This was shown in a 2018 survey conducted by Porch.com, which sampled three generations about their first-time home buyer regrets.

Before we go further, it should be noted that about half of the 1,000 first-time buyers surveyed were “mostly satisfied” with their first home. One must keep in mind that home buying dollars stretch further in some areas than others. High-cost markets can make it difficult for first-time buyers to buy the type of home they would prefer.

Here’s the percentage of “mostly satisfied” buyers by generation:

  • Boomers: 47%
  • Gen-X: 53%
  • Millennials: 49%

Those who were disappointed by their first home said their top regret was “buying too small of a home.” Surprisingly, the Baby Boomer generation held the most dissatisfaction with their square footage, with 22% of them rating home size as their main complaint.

Generation-X and Millennials also cited buying too small of a home as their prime complaint, at 20% and 15%, respectively.

Overall, most buyer regrets involved being under-prepared for the costs of home buying and home ownership. Among all cohorts, “not saving enough money before buying a home” and “underestimating home buying costs” ranked in the top three regrets.

These first-time buyers also expressed surprise with immediate out-of-pocket expenses. On average, the surveyed buyers reported exceeding their budget by $3,615 during their first year of ownership. Most of the money went towards items like new appliances, new heating and air conditioning systems, roof repairs and landscaping.

48% of all surveyed first-time buyers said they did not have enough money put aside for their first year of ownership.

What this survey does not tell us, is what kind of home buyer representation these first-time buyers obtained, but we can take a guess! Typical real estate agents represent the home seller, even if they “work with buyers” or are so-called “buyer agents.” If agents or their brokerages represent home sellers, or list homes for sale, they are dual agents; essentially, transaction handlers who cannot give specific advice. First-time buyers are especially vulnerable under the limitations of dual agency!

Discover the buyer protections offered by an Exclusive Buyer’s Broker! Start by downloading our free e-book, “How to Buy a Home like a Pro!” It’s yours without any strings attached.

As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Exclusive Buyer’s Broker, CEBA-M, MCNE, CSP, PSA,e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services, www.buyershome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

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