The Finance, Fundamentals and Funding of Real Estate

At Hewins Financial | Wipfli Hewins, we’re committed to empowering our clients with the knowledge they need to make smart decisions for their financial future. We’re extending that commitment to the everyday investor as proud partners of Money Smart Week®, a national, public awareness campaign designed to promote personal financial health and literacy to consumers.

Today, we’re giving you an exclusive sneak peek at one of our featured sessions:

For many, homeownership represents the fulfillment of the American Dream, a rite of passage into the next phase of life. In other words, it means you’ve “made it.” And if you’ve been waiting for the right time to make your move, 2016 might be it: industry experts project that rent prices will climb and home prices will drop this year, leading to a boost in new-home inventory.1 Plus, interest rates are still lingering at record lows (for the time being, anyway), which means you might have a little extra time to scoop up a deal.2

But before you sign the dotted line for your dream home, pump the brakes: the market may be shaping up, but there’s more to the purchasing process than the sticker price, interest rates and market trends. It’s about knowing how all of these factors relate to your unique financial situation.

The Finance, Fundamentals and Funding of Real Estate

The first step? Seek insight from the experts. Today, we’re teaming up with our friends and fellow Money Smart Week® co-hosts at Guaranteed Rate and Jameson Sotheby’s International Realty to discuss the key factors that every buyer should consider, examined through the lens of our favorite hypothetical couple: Jane and Joe.

1. Jane and Joe are newly married and have decided to take the plunge into homeownership.

They’re starting at square one: home financing. What should they consider when choosing a lender and applying for a mortgage?

Matt Kennedy

Matt Kennedy  |  Vice President of Mortgage Lending,
Guaranteed Rate

“Whether they’re first-time buyers or seasoned investors, there are a couple of things everyone should consider when navigating the lending process. Jane and Joe should start by determining the end goal for their mortgage loan: do they have a certain amount of funds they can put toward the deal, or are they focused on a specific, maximum payment?

Second, Jane and Joe should try to partner with a loan officer that can prepare a pre-approval, which is an evaluation that determines whether they can qualify for a loan based on the amount the officer is willing to lend (gleaned from their income, credit and employment histories). The officer should also be able to fully explain what funds are needed to close on the property. Beyond the minimum amount needed for a down payment, Jane and Joe also need to account for closing costs and other prepaid items, so advance financial preparation is key.”

2. After meeting with their mortgage lender, Jane and Joe walk away with a lot of information about the purchasing process.

They need help making sense of it all. What financial planning factors should Jane and Joe keep in mind when deciding whether they’re truly ready for homeownership?

Scot Roche

Scot Roche, J.D., CPA, PFS  |  Principal and Regional Director,
Wipfli Hewins

“Home may be where the heart is, but Jane and Joe need to use their heads throughout the decision-making process. First and foremost, they should take a step back and ask themselves, what are we purchasing for? What are we giving up by putting ourselves in this position? Is it mobility? Is it a potentially lower return on their investment when it comes time to sell? Consider every possibility, both expected and unforeseen.

Outside of flexibility and return potential, Jane and Joe also need to look beneath the surface, past the number their lender gives them. They should think about the costs lurking around the corner — like property tax, insurance and maintenance — and assess whether those expenses fit into their current financial foundation. Do they have enough savings to cover a down payment, without dipping into their emergency fund or retirement accounts? And beyond the down payment, do they have reserves socked away that can cover any potential issues that come up once they’re living in the home?

At the end of the day, a buyer can’t fully enjoy the glory of homeownership without having the key puzzle pieces in place. A financial planner can weigh those factors against their current financial situation and help them arrive at a decision that’s best for them.”

3. With their lending and financial planning questions answered, Jane and Joe are finally ready to start searching for their dream home.

What should they be looking for in a property?


Ian Halpin  |  Broker, 
Jameson Sotheby’s International Realty

“When researching properties, Jane and Joe should make a list of their ‘must-haves’ — the details that matter most to them in a home purchase. Some people put more of an emphasis on location over value — for example, they might want to purchase within certain school district boundaries, if they plan to have children in the future. Some people might concentrate their search on areas that are close to public transportation, if they don’t own a car. Other people will look at the property as an investment, focusing on value and making sure they give themselves the best opportunity to make a profit when it comes time to sell. The biggest determining factor is really what is most essential to you, as a buyer.”


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OneBite Editorial Staff

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The Finance, Fundamentals and Funding of Real Estate

time to read: 4 min