Level: Advanced
Objective: To discuss tips on buying a house
Словарный запас: To be looking to, put down, dough, lenders, furnace, fix, brokerage, figure out, dry-cleaners, up-and-coming, to catch on, sidelines
“I’m Robin Moreno for howdini.com. If you’re looking to buy a home your first question is likely to be ‘what can I afford?’ And given the horror stories we’ve all heard about sub-prime mortgages and predatory lenders, we all want to be extra-careful when it comes to borrowing. Joining me to answer key questions for home buyers is Gerri Willis who is CNN’s personal finance editor, and author of ‘Home Rich, increasing the value of the biggest investment of your life’. Welcome Gerri.”
“Hi Robin, great to see you.”
“First up, how can I figure out how much house I can actually afford?”
“You know it’s not that hard, you really only want to spend a third of your income, your gross income, that’s before taxes on housing, but it’s not just the mortgage you have to worry about, it’s also insurance, it’s the cost of maintenance, it’s the cost of taxes, so that’s a very big bill at the end of the day, you really need to sit down, do the calculation and make sure you’ve got the numbers right.”
“Ok so I’m looking over my numbers and you know what, I’m in good shape, I actually have more than the 10-20% that I need to put down, should I go ahead and put that down?”
“Well congratulations first of all on having the dough because that’s no small thing, but yeah you should probably put down 20% because, because this is really going to give you skin in the game, this means you are going to be able to afford this house, lenders will take you seriously, they will give you the best terms provided you have a good credit score, so I think it makes sense to put down 20% but not more.”
“What would I not put down more than 20% if I actually have it?”
“Well OK think about it. If you’re buying a new house and maybe you’re doing it for the first time, you’re going to find out that you have other costs that you didn’t expect, I can’t tell you how many first time home buyers have come to me and said ‘oh my goodness the furnace went in the first month, I had to repair the roof… you know it’s happened to me so you want to make sure you have a lot of money on hand or some money on hand when you get that new house in case the worst happens and you really have to put some money out for a fix or some kind of improvement.”
“Now I know what I can put down, what I can afford, what are some tips for accessing the housing market in my area?”
“Well it’s pretty easy, you can really go online, that’s the best way to get started to figure out what is in your price range, because all the major brokerage houses will have online websites because most folks, particularly women search on the web first, so now you get an idea of ‘how far will my money go, what can I spend, what’s affordable in the neighbourhood I want to buy?’”
“We’ve all heard the mantra ‘location location location’, so how do I figure out the best area that fits my price and my needs?”
“Well a lot people already have one neighbourhood in mind but if you don’t and you’re a little flexible on where you’re going to look, you want to check out the basic services in an area, ‘are there malls nearby, are there dry-cleaners nearby, is there a place to go grocery shopping?’ You want these things really close to your house, just so that it’s an easy place to live. I know this sounds like really obvious but some people get stuck in an area where there are no services and it’s really painful. Remember: at some point you’re going to sell this house and the people who are buying it will want to be close to services as well.”
“What if I wanted to sort of get into an area that’s up-and-coming, do you recommend that or again it’s all about the services?”
“You know in this market you don’t have to worry about that because – guess what – houses are on sale and houses are even on sale in very good neighbourhoods so at this point you don’t have to go to an emerging neighbourhood and take the risk that it’s not going to become popular and it’s not going to catch on.
“OK so this bad market is actually good for many people.”
“This bad market is great for buyers right now. Look, if you have been off to the sidelines because you couldn’t afford housing now is the time to really start thinking about looking and looking hard because prices are coming down and it’s really a good time to get your money together and get into the market place and start asking questions. So many people have been kept out of this market place by high prices, but now is the time to get involved.”
“Thank you so much Gerri Willis for your good information and opportunities for potential home buyers, and this is Robin Moreno for howdini.com.”
Comprehension Check Questions
- How do you know what size of property you can buy?
- How much deposit should you put down?
- Why shouldn’t you pay a bigger deposit?
- Where should you start looking for houses?
- What are some key factors for deciding on an area?
- Why is the market good for so many people now?
Discussion Questions
- Do you own a home?
- Do you think these points are relevant / correct?
- Would you consider buying a house now? Why / why not?
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