t’s no secret that over the past few years, the housing market has been one of the hottest topics, especially among new buyers. We saw major shifts when the pandemic hit; between heightened …
t’s no secret that over the past few years, the housing market has been one of the hottest topics, especially among new buyers. We saw major shifts when the pandemic hit; between heightened prices, inventory at a record low, and houses flying off the market in mere minutes, it became hard for many unseasoned buyers to explore the world of real estate.
Local real estate agents Brooke Buckett and Deb Cordeiro, first-time home buyer Holly Richmond, and mortgage advisor Gina Campbell-Helm all said that, when it comes to getting your feet wet, knowledge is key.
Campbell-Helm said, “My goal is to help any buyer, be it their first time or tenth time around, make an informed decision.”
Though cost and availability fluctuate, Cordeiro stands by her tried and true philosophy that “It’s always a good time to buy. Real estate has proven to be the best investment, and nothing has been able to prove me wrong on that.” Similarly, Buckett said, “Building sweat equity is incredibly valuable. It’s important, and in your best interest, to be willing to look for long-term opportunities … When you buy over renting, your home becomes an asset rather than a liability.”
You’re in control
Making the decision to buy a home allows owners to, somewhat, control their own costs. As Buckett said, “When you rent, you’re paying your landlord’s mortgage, and there’s always the risk that they’re going to up your payments. When you pay your own mortgage, you’re paying into a nesting egg for yourself.”
Campbell-Helm made a similar point: “Rent is really at a premium, so to buy something where you’re generating equity instead of paying a bill that isn’t working for you anyway just makes sense.”
When the time comes to get the ball rolling, as Richmond put it, “There are so many variables and subtopics that the information just isn’t really accessible on your own.” This is why Buckett so strongly values the hour-long consultation she holds with each first-time buyer she works with. From there, she said, “I kind of hand-hold and coach you through the whole thing. I have trusted lenders and attorneys, and I work really hard to set them up with reputable resources from the get-go.”
Cordeiro also identified this as a crucial part of the process. She said, “I always make sure they have everything they need in their corner.”
Borrowers opting for ARMs
The different experts in the process play vastly different roles. Agents lead the house-hunting. Lenders help steer the finances. Campbell-Helm said she leads the discussion about “down payments … and we look at credit and assets, because if those things stay the same, everything should go smoothly.”
She said that recently, because of rising interest rates, buyers are increasingly opting for Adjustable Rate Mortgage loans (ARMs), and Rhode Island Housing programs.
She said, “Just about 90% of my clients are going with ARMs right now.”
These loans offer an interest rate up to a full point lower than the traditional 30-year fixed mortgage. For example, a 10/1 ARM loan is fixed for ten years at a rate of 5.125, and when the ten years is up, it readjusts annually. There are also adjustable rate loans available for seven- and five-year increments, but as Campbell-Helm said, “The less amount of time you have with the loan, the riskier it can get because you have less time with that fixed rate before it starts to shift.”
Rhode Island Housing offers a program where buyers can get 100% financing upon approval and qualification. Campbell-Helm did, however, say that “In this market, it’s more difficult for buyers to get accepted offers using government loans.”
Advice to buyers
When asked what one piece of advice they would give to first time-buyers, each professional said something different. Cordeiro said: “If you find a house you like and that works for you, go for it. You absolutely have a fighting chance, so at least try.”
Buckett recommended, “Even if you’re six or twelve months out, have the conversation, because being prepared is what puts you ahead.”
Campbell-Helm refrained from giving specific advice because she believes absolutely every situation is different, and “Something that’s great for one person could be irrelevant or just not helpful for another.”
A common thread from each expert’s perspective is that buyers must be prepared and organized — and backed by good people who can make the journey as seamless as possible. When asked if she thought this is a good time to buy, Cordeiro said: “Absolutely. You just need your ducks in a row.”
While the home-buying process can be stressful, especially for first-time buyers, Richmond said: “I find house-hunting to be really creative and liberating. It’s really motivating to imagine yourself in the space and be able to think about how you could make it your own.”