Tips for New Home Buyers in Alamo

Buying a new home in the Alamo area can be exciting and overwhelming all at the same time. Here are a few tips when it comes to buying a new home.

1. Short-Term Mortgages

If you are in the beginning stages of home buying, you may still be shopping for a mortgage loan. If you are able to financially afford a 15-year fixed-rate mortgage over a 30-year fixed-rate, I would highly recommend it. This type of loan would result in you paying off your home in 15 years versus 30. A 15-year loan will also allow you a lower interest rate. Your monthly payment will be a little higher as you will be paying off your home in half the time of most common mortgage loans.

2. Do Away With PMI

If you put less than 20 percent down on your home loan, you can expect to pay Private Mortgage Insurance (PMI). PMI is a policy that protects the lender from any losses they may incur if you do not pay your monthly payments. The U.S. Federal Reserve System, which oversees national monetary policy and banks, reported in its consumer guide that the cost of PMI can range from $50 to $100 per month. Getting rid of your monthly PMI payment can save you a substantial amount of money.

To do away with PMI, your first option would be to put 20 percent down on your mortgage loan. However, if you are unable to put 20 percent down, there are other ways to do away with PMI. Once you have made enough payments to gain 20 percent equity in your home, send a written request to your lender asking them to cancel your PMI insurance.

3. Shop Around for Your Home Insurance

For many, their home is one of their biggest assets and properly insuring it should be a top priority. Take your time and approach many insurance companies to find the best rate and coverage for your needs. You want to purchase enough insurance to cover the full replacement cost of your home.

4. Is It Time To Hire A Contractor?

If you are looking to make improvements to your new home to make it fit your style, changes that you can do on your own are ideal and will save you money. However, unless you are a contractor, you may not be able to tackle some of the projects you want done around your home. The National Association of the Remodeling Industry (NARI) recommends hiring a contractor when there is an unknown. According to the NARI, “The unknown that is obvious to a professional but is not to the average layperson can cause a lot of problems for people trying to tackle a project themselves.” Things such as painting and small roof repairs are easy projects that many homeowners are capable of doing on their own.

5. Internet, Cable And Phone

After you have purchased your new home in Alamo, consider a monthly plan that will bundle your Internet, cable and phone. If you are planning on using the same company for both your Internet and cable, ask your provider if they offer a bundle plan. Consumer Reports Magazine Senior Editor Jeff Blyskal, says if you do it right, bundling can save you money.

If you are ready to sell or buy a home, contact me by email or call me, Brad Gothberg, at (925) 648-5326. I have been a real estate professional for 23 years, and my qualifications include the production of over $105 million in sales within the past 5 years.

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