Buying your first home is a major decision—one that affects both your finances and your life. Make sure you’ve done your homework before you take this big step. You don’t want to find the home of your dreams only to learn you can’t afford it. Getting good advice early is critical so your American dream can have a happy ending.
Once you’re ready to buy a home, it’s a smart step to get pre-approved for a mortgage, even before you start looking. And savvy first-time homebuyers should use the expertise of a mortgage professional to help them through the pre-approval process.
This process starts by analyzing your income to determine your purchasing power. Next, your cash and investments are reviewed to determine funds available for a down payment. Then you’re matched with a mortgage program to meet the monthly payment you qualify for and the liquid assets you have.
Other home-related costs can affect your mortgage limit, such as closing costs and local real estate and school taxes, which can vary widely among neighborhoods and school districts. Condominium fees and similar fees also impact affordability. A mortgage professional should know the area and help you understand these factors and costs and their effect on affordability.
It’s a good sign if your realtor asks you for your pre-approval letter before taking you to look at homes. It wastes everyone’s time to show you houses you can’t afford. The pre-approved purchase price helps focus home searches in areas you want and can afford.
Most important, pre-approved buyers can shop with confidence and negotiate from a place of strength once they find their dream home.
Myths vs. Reality
Here are some common misconceptions some first-time homebuyers may have—and the reality of today’s mortgage market.
Myth—I need a 20% down payment to buy a home.
Reality—There are many low-down-payment programs available. The federal government insures FHA loans with 3.5% down payments; Fannie Mae and Freddie Mac offer 5% down payment programs. If you served in the military, you can purchase with no down payment, using your VA benefit. In rural areas, such as western Chester County, USDA offers a no-money-down rural housing program. Plus, many counties offer down payment grants. Your mortgage professional can help research programs for you.
Myth—Private Mortgage Insurance (PMI) is a rip-off.
Reality—The reason low-down-payment programs exist is because of private mortgage insurance. PMI protects lenders from part of the loss of a foreclosure (FHA has its own version, known as MIP). Lenders almost always lose in foreclosures, even on borrowers with 20% down payments. Legal fees and interest costs drive up foreclosure expenses. So PMI protects lenders and encourages them to risk writing low-down-payment loans. As the mortgage industry has stabilized, mortgage insurance rates have become more competitive.
Myth—I need a high credit score to buy a home.
Reality—You need a good credit history showing few or no late payments. Some buyers show good credit history, but lack sufficient history to earn a high credit score. Even so, you still have options.
Myth—All the down payment money must come from my own funds.
Reality—Many first-time homebuyers receive cash gifts from relatives, and that’s okay. The gift-giver has to provide documentation of the source of funds and an executed gift letter. Some buyers get help from relatives who co-borrow with them to help them qualify.
Myth—I can’t buy a “fixer upper” if I’m a first-time homebuyer.
Reality—FHA offers 203K programs that allow fix-up expenses to be financed as part of the purchase price and require only 3.5% down payment.
Your home purchase can really be your American Dream if you’re prepared and have help to guide you through the process. Working hand in hand with a mortgage professional and realtor will help make your dream a reality.
Ken Pitts is a Senior Mortgage Banker with Leader One Financial Corporation, a national mortgage lender. With over 25 years of real estate and mortgage experience, Ken serves the greater Philadelphia area, Delaware and Southern New Jersey markets. Contact him at 610-345-9100; Leader1.com/KenPitts. NMLS # 528202
Buying your first home is a major milestone. It’s likely one that will make you feel more like an adult, a more responsible person, and more connected with your community. The perks of home ownership are plentiful—tax benefits, building home equity and credit, sometimes even a cheaper monthly payment. Plus ownership brings with it a sense of pride and security you won’t find while renting or crashing with friends or family.
Before you take the leap and buy your first home, you’ll want to be prepared for the responsibilities that accompany your new status. Because, unlike the images on those televised remodeling shows—where kitchens and bathrooms are redone in a few days and fixer-uppers are transformed in short order—owning a home is work!
That’s why you’ll want to be sure you’re ready and prepared for the challenge.
How Do You Know?
Buying a home is as much an emotional decision as a financial one. “You’ll know you’re ready to buy because you’ll feel it,” says Jennifer Daywalt of Better Homes and Gardens Real Estate. “You’ll want to make your home décor Pinterest boards a reality, and you’ll begin envisioning what your home will look like and how you’ll decorate.”
You’ll more likely feel ready when you’re at a stable point in your life and taking that next step seems a perfectly logical choice. “If you plan to move in the next year or so, it might not be the best time to buy,” notes Brett Jones of Sotheby’s Brandywine Fine Properties. Only you know if the time is right. And as Jones advises, “The most important thing is making your first home a place to be happy.”
Of course, you’ll want to make sure your finances are in order. Yes, you’ll need money for the down payment and monthly mortgage payments. But you also have to plan for things like property insurance, taxes, regular maintenance and higher utility bills (some renters don’t pay utilities, like heating) as part of your homeowner budget. (More about getting your first mortgage in the “Worth Knowing” column in this issue.)
Savvy homeowners also set money aside for unforeseen expenses—that rainy day fund—as well as other things that make them happy so they don’t feel house poor.
What To Look For?
A key consideration in your decision is your lifestyle. “Do you want to live downtown, where you can walk out your door to local shops and restaurants?” asks Jennifer Daywalt. “Or, do you prefer a smaller neighborhood with more open space and nature right outside your front door?” These lifestyle cues will help you decide where to start looking.
Other considerations include proximity to work, family and friends. Some people may feel a fresh start in a totally new location is just what they need, while others won’t want to give up the close relationships and familiarity with towns in their current neighborhood. The trend among millennials favors community-style condos and townhouses, but that doesn’t mean it’s for everyone.
And remember, although your first home is likely not your ultimate dream home or the only one you’ll ever buy, that doesn’t mean you shouldn’t plan for the future.
“Many first-time buyers make the mistake of being too conservative,” notes Holly Gross of The Gross Realty Group. “They’ll pick the bare minimum they can afford and outgrow their home too quickly.” For example, if you buy as a single person or couple and then decide to start a family, your needs and wants may well change with your lifestyle. “It’s better to leave yourself room to grow than have to move again before you’re ready,” says Gross.
Best Time To Buy?
Traditionally, springtime was thought to be the best time for buying a home. But times have changed. Many realtors now say there’s no best or right time. In fact, waiting until spring may prove more stressful for first-time buyers as they compete in the busy market.
It’s best to start looking as soon as you know you’re ready. “Although the old adage has been to list in the spring, buyers shouldn’t limit their timeframe to start their search,” says Georgianna Stapleton of Country Properties. She admits the springtime will generally have more houses available, but it doesn’t prevent the rest of the year from having great properties for sale. “The need to purchase, not seasons, should be the buyer’s motivator!” she says.
Do You Need A Realtor?
The resounding answer to this is … yes, you absolutely need a realtor! Specifically a local one. And especially as a new buyer.
Navigating the real estate market through websites like Realtor.com may seem like the way to go, but you could cause yourself more stress and the potential for a costly mistake.
An experienced realtor who knows the area’s ins and outs is your best guide, one who can tell you about the neighborhood, school district, things to do, local businesses and more. “We’re there to guide you through the process and look out for you,” notes Holly Gross. Gross stresses the importance of interviewing several realtors and choosing one who understands your needs and makes you comfortable asking difficult questions. And as a first-time buyer, you’re likely to have a lot of questions.
Realtors want you to be satisfied. “The last thing we want is our clients to experience buyer’s remorse,” notes Brett Jones. “Having a realtor there throughout the process of inspection, making offers and signing contracts helps lessen the chance of making the wrong choice.” And a happy homeowner makes a great reference and a repeat customer.
So if 2016 is your year to buy a home, there’s no time like the present to get started!
Better Homes and Gardens Real Estate, 202 Bridge St., Phoenixville; 610-933-1919
Brandywine Fine Properties, Sotheby's International Realty, 5701 Kennett Pike, Centreville, DE; 610-474-6520
Country Properties, Berkshire Hathaway/Fox & Roach, Routes 82 & 162, Unionville; 610-347-2065
The Gross Realty Group, Berkshire Hathaway/Fox & Roach, 484-678-0367
Even those who aren’t hard-core HGTV fans have likely heard of the Property Brothers, Jonathan and Drew Scott. These identical twins—a realtor and a licensed contractor—help couples find, buy, remodel and transform extreme fixer-uppers into their ultimate dream homes on time and on budget, using CGI (computer generated images) to show images of what could be. If you missed them at January’s Philadelphia Home + Garden Show, catch one of their TV shows, Property Brothers, Buying & Selling, Brother vs. Brother. They were kind enough to share some home improvement advice with us.
Everyone wants to update their living space. What’s the easiest way to do that?
We can’t stress enough how important decluttering is in a space. You have to make sure that your furniture pieces aren’t too big for the room and that your paint palette isn’t too dark, as that makes a space feel smaller.
When renovating, what part of the home do people tend to neglect the most?
The master bedroom is typically the last room to be considered for a reno because the focus is always on the ‘entertaining’ areas. That’s kinda crazy to me because the homeowner should have a wonderful, relaxing oasis to kick back in at the end of the day. We always put everybody else’s needs ahead of our own. That needs to stop. Put in that amazing soaker tub. How about a fireplace in the master? Or even a massive walk-in closet to admire your shoe collection.
Is there a remodeling project that should generally be done by a professional?
Anytime you’re doing major electrical, plumbing or structural ... use a professional. These are areas where one small mistake could cost thousands of dollars or worse yet put the occupant’s life in danger.
What project can most homeowners tackle themselves?
If you’re tired of staring at a boring blank wall in your living room, take on a fun weekend project to install a reclaimed wood feature. You can buy a reclaimed wood veneer product that comes with adhesive on the back. Or to save some money, you can buy real reclaimed wood that has been processed and is ready to install. Or to save even MORE money, you can find real rough reclaimed wood and prep it yourself with a wire brush. It’s a beautiful feature and fairly easy to install.
Do you have a favorite type of home improvement project?
We absolutely love outdoor living spaces. It’s a great way to add livable square footage without doing an actual addition. Nothing beats kicking back with friends around a fire pit.
What’s the best part about what you do?
The most rewarding part is when homeowners throw their arms around us and say thank you for helping them do what they would never have been able to do on their own. Oh, and the demolition part is a lot of fun too.
If homeowners need to tackle one project at a time, what’s the best place to start—what room or what project?
Start with the areas that will make your life easier. Kitchen if you like to entertain or always prepare family meals. Basement with bathroom if you need more space for the kids. Expanded laundry if you’re struggling to keep up.
What’s your best tip for staying within budget?
Organization is key. Plan everything in advance. Look for deals on all materials and fixtures well before you need them. Otherwise you are at the mercy of the retail price at that time.
What’s your best advice for finding the right home?
Location. You can do anything you want to improve a home ... but you can’t upgrade your community. So never turn a blind eye to things like an airport or train in behind the property.
Even for house-hunters, the heart wants what it wants.
Sometimes a house-hunter just knows—it’s love at first sight. The house may not include every item on your wish list, but suddenly that seems less important—something that can wait until you’re settled in and can update the house exactly the way you’d like.
That’s how it happened about twelve years ago at a historic home in Flourtown—the current owner walked in and knew fate had led her family to the right place. “The minute we went in it,” she says, “we knew that’s where we wanted to be.”
The kids had made themselves at home already—they were running up and down the stairs. She turned to her husband and said, “We have to have this house.” And they did.
And certainly the house as it presented itself when the owners bought it had much to offer. Generously sized, it was framed by mature trees on a nearly four-acre lot that backed up to the Wissahickon Creek.
There were two main structures joined together. One was of stuccoed Colonial-era fieldstone, with the smaller rooms typical of the time. The other was larger, with larger rooms, done in the more formal Federal style, dating from the early 19th century.
There were seven fireplaces, 11-foot ceilings, millwork their architect calls “spectacular,” and distinctive touches like a floor-to-ceiling mirror in the dining room so massive it requires special supports in the basement.
And yet it wasn’t overpowering or museum-like. “It was so grand and yet warm,” the owner says. “It’s just a really great-karma place.” It was also well cared for. “You can tell when a house has been loved,” the owner says.
But like any home, historic or otherwise, that hasn’t been renovated in decades, there were things missing that the owners wanted. It didn’t have “a fabulous modern kitchen,” the owner says, it didn’t have a master bath and dressing room, nor a mudroom. There were any number of features missing from the house and needed for an ideally updated incarnation.
Time Had Come
After living in the house for a few years, the owners decided to go forward with the wish-list renovation. They started looking for architects they felt would make the project a “labor of love,” and decided Devon-based architect John Toates was the one for the job. “Very quickly, his vision was similar to ours,” the owner says.
That consensus was not pure serendipity—Toates says his process involves interviews to learn about the homeowners’ basic requirements and desires. He then refines the plans as he learns more about how they live, sifting and refining the myriad options until the new version of the house is a near-perfect fit.
He doesn’t like to call his designs “custom” homes, he says, a term he thinks is overused to the point of meaninglessness. He borrows the term “bespoke” from the world of tailoring to express the goal: a home not just unique but uniquely suited to its particular owners.
At the top of the wish-list, the house had a general problem—it was hard to move about freely in it. Many historic homes are like that. “Rarely are the pieces linked together in a way that makes sense as a holistic package,” Toates says.
The house had a living room the family liked to use, but it was a dead end. “Once people got down there, they were trapped,” Toates says. The dining room was a similar cul-de-sac.
So the redesign project included the creation of a butler’s pantry with a wet bar off the dining room that connected to the sunroom that connected to the living room. “This gave a release from that space,” Toates says. “There was another way to enter and exit the space and it felt more natural.”
Other large-scale changes involved taking the stucco outer layer off the original Colonial-era section of the house to help distinguish it from the later Federal section. Both the outside and the basement walls of the Colonial section were done in handsome fieldstone that turned out to be in good condition, so the project added a basement wine room with a set of stairs to make it easier to reach.
A mudroom and family entrance were also added, along with a solarium that opened out to the pool area, making life easier and more convenient for the family. The project also involved an addition to the Federal section with an open porch on one side and a sunroom on the opposite side. “It’s just much more functional than before,” the owner says.
Modern, Yet …
The kitchen is an example of larger goals and meaningful details woven together. The owners very much wanted a beautiful, modern kitchen, and the modernity shows in the expanses of black soapstone countertops and gleaming stainless-steel appliances. But past and present are intertwined: The cabinetry, furniture and flooring all evoke the past, and the fireplace is a focal point.
Toates, who cultivates sources of antique furnishings as part of his work, found a period fireplace crane to replace the long-gone original and recreated other elements of that fireplace and the history of the house, he says. He also found the antique cast-iron air duct grills that matched similar arch-top pieces in the front hall—another uniquely bespoke sort of touch—matching that was more meaningful to this house than it would be anywhere else.
The house may be more functional and uniquely tailored to the way its current owners live. But the team who made those changes also respected the house’s history as they worked, and this was part of the current residents’ vision too. Ted Trethewey, president of E.C. Trethewey Building Contractors, says projects like this require not just experience in historic renovation but the help of a superior architect and clients who share the building professionals’ goals. “It really allows us all to do what we do best,” Trethewey says.
The owner says her family and the former residents became good friends, and they’ve talked about their sense of the house’s long history. It’s a thing you hear from many owners of historic homes—they’re writing a new chapter in the house’s history, but other chapters will come, and they feel a sense of responsibility toward the future owners and the larger story.
“We’re caretakers,” the owner says.
Architect John Toates, Architecture and Design in Devon
Builder E.C. Trethewey Building Contractors Inc. in Downingtown
Designer Patty Billock of PMB Designs in Ambler
Downingtown Architect Jennifer Baxter supervised the construction phase
A summer home in Glenmoore for the Main Line’s Montgomery family became a modern year-round retreat and family compound.
It was a case of love at first sight and it was not long before Father had bought some two hundred acres of Henderson’s land on Indiantown Hill, including the site of the old Indian burial ground. I have always thought it very uninspired of him to have named his land ‘White Oak Farm’ in honor of a big white oat tree on the very crest of the hill, instead of ‘Indiantown Hill Farm.’ … White Oak Farm was the great love of our young lives, and still is mine.
—Horace Binney Montgomery, from Return the Golden Years
Arriving on the long, winding driveway leading to White Oak Farm, it’s easy to see why this place was the source of so many fond childhood memories of Horace Montgomery, the second youngest of 11 children of Elizabeth Binney and Richard Roger Montgomery, co-founder of the Merion Cricket Club. During the early 20th century at this country retreat, young Horace and his siblings found berries to pick, woods to explore and streams to fish—a summer paradise.
The feelings of sanctuary and nature retreat remain on the lush 76-acre property set along the north branch of Indian Run, a tributary of the Brandywine River. The pleasures of berries, woods and fish are joined by modern amenities like a salt-water swimming pool, guesthouse and a thoroughly renovated manor home.
Saving the House
The good bones of the solid 1906 manor house attracted the current owners when they stumbled upon the ramshackled, abandoned property almost 20 years ago. Built of Pennsylvania granite and fieldstone collected by local farmers on stone-hauling day—in a ritual similar to an Amish barn raising when neighbors pitch in—the main structure withstood its interim uses as a rehabilitation facility and a home to forest animals.
Working with local architect Peter Batchelor and builder John Diament, the owners took the main house back to those good bones of stone walls and wood floors. The structure was transformed into a 21st-century, 5,000-square-foot, three-story home with four bedrooms, three-plus bathrooms for the owners and their three children. A new family retreat, but this one was used year round.
Making It Modern
The conversion gave new life to this special family home, while preserving quality materials—such as the wood floors (there’s nary a squeak even today)—and details like the wrap-around porch, where the Montgomery family gathered to shell peas, sing songs and talk about books and where the current owners dine, relax and enjoy the koi pond. Modern windows brought in light to spaces graced with nine-foot ceilings, small rooms were opened up, archways and built-ins were added to make the space livable for a modern family.
The first floor has formal living and dining rooms, but it’s clear the family gathers in the large chef’s kitchen and family room with doors to outside decks and patios. A home office retains the cozy proportions of the original home, while a large mudroom and powder room add convenience.
Bedrooms with built-ins, modern bathrooms and a laundry room fill the second floor. The master suite has thoughtful details like a fireplace (one of four in the home), Juliet balcony, home office, walk-in closets and beautiful views of the property from its corner site. The large master bath has his-and-her sinks, cherry cabinetry, a pedestal tub, walk-in glass shower with bench, and separate water closet.
Third floor spaces under the eaves are at tree level, giving a cozy feel. An el-shaped room with built-in bench for enjoying the view is currently a sewing room, while a large bedroom with dormer windows fills the other end of the floor. A shared bath boasts big windows and another bench for gazing outside. Unfinished attic space could be converted or used for storage.
The home has been preserved and improved, as have the grounds. Outbuildings were reclaimed, repurposed and added. A two-car detached garage has a workshop, bathroom, loft space and indoor/outdoor kennel with fenced run. The 3,300-square-foot, single-story barn has ample room for farm equipment and storage of everyday items, boats or classic cars and could easily be converted to a working barn.
In 2009, a pool/guest house—complete with full kitchen, bath and bedroom/studio/exercise room—was added off the 20-by-40-foot salt-water pool. A charming potting shed and old icehouse—perhaps a future sauna—plus emergency power generators add to the pleasures of the property.
You’ll also find a stocked koi pond with a waterfall, water lilies and irises; a large pond stocked with fish and perfect for paddle boating on an adjoining 13-acre parcel also for sale; an orchard with pear, apple and white cherry trees plus blueberry bushes; and acres of fields, streams, paths and woodlands.
The perfect spot for your year-round retreat.
This 76-acre property is available for $1,850,000. For information, contact Bill Cochrane, James A. Cochrane, Inc., 610-469-6100 or 610-476-4779; CochraneInc.com.