With each step in life’s journey, our needs, dreams and aspirations evolve and change. The same is true for homeownership. Owning a home presents its unique opportunities and challenges at different stages of life. From the excitement of buying one’s first home to the anticipation of finding the ideal place to retire, there are many factors to consider along the way.
The First Home
Among the first steps, according to Heidi Stanalonis, director of real estate credit services with PSECU (psecu.com), is understanding what it really means to be a homeowner.
“A lot of folks think it’s all about being able to afford the mortgage, but there’s much more to it,” Stanalonis says, including what real estate taxes, utilities and maintenance costs.”
One of the most critical factors in buying a first home is establishing a good credit rating, according to Lou Puliti, owner/realtor with Re/Max Realty Associates (realtyassociates1.pennsylvania.remax.com) in Camp Hill. Among his top recommendations are building and maintaining good credit, saving for a down payment and meeting with a lender to get pre-approved for a mortgage.
“Getting pre-approved will determine what your buying ability is, what your mortgage payments might look like, and help you determine what your comfort level is,” says Puliti.
Chad Neiss, SVP of Residential Mortgage Sales with Susquehanna Bank (susquehanna.net), agrees that meeting with a trusted advisor is important in understanding your financial and credit standing.
If a first-time home is in your future, you’ll also want to begin gathering critical documents required by banks to pre-qualify you for a mortgage, including paystubs, W2s, bank statements and more, according to Neiss. With lending standards tightening, it’s important to keep good documentation on hand to expedite the process.
Whether you get a realtor recommendation from a friend or family member or choose to interview potential agents, you’ll want to assess their experience, their knowledge of the area and your comfort level with the individual representing you.
“Comfort level is very important. You need an agent that has your best interests at heart and will go the extra mile for you,” Puliti says.
The Trade-Up Home
There comes a time in most homeowners’ lives when they begin to outgrow their first home. Whether it’s for an additional bathroom, a bigger yard or a better neighborhood, “trading up” in today’s market presents incredible opportunities, according to Amy Fry, associate broker and managing director at Coldwell Banker Select Professionals (cbsp.com) in York.
“With a high inventory of available homes, you can get a lot more home for fewer dollars with a mortgage payment that’s incredibly low,” says Fry. “If you do the math, trading up really works in your favor: You may sell your home at less than you would have a few years ago, but you’re buying more home at a reduced cost.”
In most cases, the top consideration for trade-up buyers is location, according to Fry. Since many of these buyers have children, they tend to begin their home search in their select school district. A neighborhood setting, shopping, parks and sports fields all play into trade-up buyers’ home search.
With a home to sell, the tricky part of buying a trade-up home is determining your buying-selling strategy. Putting your “new” home under agreement, then listing your current home puts you at risk for carrying two mortgages. Listing and selling your current home before finding your ideal “trade-up” home puts the pressure on to find the right home before your settle on your current one.
“You need to know whether you can afford two mortgage payments for a certain period of time,” Neiss says. If you’ve found the perfect home in the perfect location and mortgage rates are very low, it may be worth taking the risk.”
For buyers with good equity in their current home, there are options to access the equity in their current home to put down on a new one, according to Neiss. Trade-up buyers in this scenario can also consider renting their current home to increase cash flow as an alternative to selling. Still, many trade-up buyers choose the “list, hope and wait” route, Neiss says.
The Retirement Home
In today’s world, “retirement home” is a relative term. From luxury, resort-like communities to 55+ condo communities in urban settings, there’s an abundance of options available to seniors looking to downsize or “right-size” in Central Pennsylvania.
While the desires of today’s retirees vary greatly, there are a few common themes among seniors, as Rocky Welkowitz, a realtor with Prudential Homesale Services (prudentialhomesale.com) in Lancaster, points out. For most, being on one floor or having accessibility features is a top priority. A senior real estate services specialist, Welkowitz notes that, with today’s low mortgage rates and a growing desire to pursue their life dreams, today’s seniors are “right-sizing” earlier in life in order to be free to travel or be more involved in other things that interest them.
“If you know that downsizing is in your future, start working at it now,” Welkowitz says. “Don’t wait until someone has to make these decisions for you. Winter is a great time for going through drawers and boxes and deciding what to donate, sell or give away.”
The first consideration for retirement buyers is determining where they want to be long-term, whether it’s remaining in their community or making a long distance move.
“Pre-planning is essential for retirement,” says Neiss. “There are such great buys right now in the housing market that we’re seeing people who aren’t retiring for another five to ten years buying now, particularly in areas like Florida.”
Whatever your next move, establishing solid relationships with knowledgeable professionals, including a professional realtor and a mortgage representative, is a smart step toward success. Find someone you trust, share your aspirations and follow his or her lead for making your homeownership dreams a reality.
