Collins & Demac Real Estate



Posted by Collins & Demac Real Estate on 3/16/2017

We’re not taught much about homeownership when we’re young. Like paying bills and taxes, it’s something we’re all expected to pick up along the way. But with something as important and expensive as buying a home, there should be a guide to help first time homeowners determine if they’re ready to enter the real estate market.

Today, we’re going to attempt to provide you with that guide. We’ll offer some of the prerequisites to homeownership to help you determine if you’re ready to buy your first home.

A rite of passage

Buying a house is a significant moment in anyone’s life. It’s often a precursor to starting a career, a family, and settling in a part of the country you will likely call home for a large portion of your life.

It’s also overwhelming.

There’s much to prepare for before buying your first home. You’ll be calculating a lot of expenses, thinking about jobs and schools, and learning new things about home maintenance. Here are some things to think about before buying your first home.

Can I afford it?

The most obvious question first time buyers ask themselves is whether they can afford a home. What many don’t ask, however, is if they can afford all of the unexpected expenses that come with homeownership.

Everyone knows they’ll be making mortgage payments. But to decide if you can really afford a home you’ll have to make a detailed budget. Here are some other expenses to consider:

  • Mortgage closing costs

  • Property tax

  • Home insurance

  • Maintenance and repairs

  • Home improvement

  • All utilities

  • Moving costs

Do I plan on staying in the area?

When you buy a home, you’re not just committing yourself to the house itself, but also to the area you live in. Typically, it only makes sense to buy a home if you’re planning on staying in it for a number of years (usually five or more). Ask yourself the following questions to determine if you can truly commit yourself to your area.

  • Could my career lead me to transferring to another location?

  • Could my spouse’s career lead them to transferring?

  • If children are in the present/future, is the local school district what I’m looking for in terms of education for my child?

  • Will I want to move live to family?

  • Will I have to move soon to care for aging parents?

  • Do I like the weather and culture in the area?

Is my income stable?

Owning a home is much easier when you have a stable income or two stable incomes between you and your significant other. It help you get preapproved for a mortgage and help you rest easy knowing that you can keep up with the bills each month to maintain or build your credit.

Stability doesn’t just mean feeling comfortable that your company won’t get closed down or that you’ll be dismissed from your job. It also means that there are frequent openings in your field of work in the area you choose to live. So, when planning to buy a home, make sure you factor in the potential travel distance to cities or places you could potentially work.

Am I prepared to put in extra work?

If you currently rent an apartment, you’re most likely not responsible for maintenance outside of basic cleaning. Owning a home is a different story. You’ll be taking care of the house inside and out. That means learning basic maintenance and buying the tools for the job.

It also means mowing the lawn, cleaning the gutters, shoveling snow off of the roof, and other menial tasks that you’ll need to make time for.





Posted by Collins & Demac Real Estate on 3/24/2016

Being a first time home buyer has it's benefits when it comes to financing. The Federal Housing Administration (FHA) has loans tailored specifically to you! Lower down payments and lower closing costs help newbies make the jump into home ownership. With a FHA first time home buyer loan you can get interest rates as low as 3.5%, which can really save money on the life of your loan and keep your monthly payments lower. Your down payment is also lower than a traditional mortgage; instead of putting 20% down, you can put as low as 3.5% down if you qualify. While a lower down payment will increase your monthly payment (since you are taking a loan out for more money), it will help with the burden of needing a large amount of money up front. With FHA loans you can also include most of the closing costs and fees into the loan, again helping with the money needed at the time of purchase. You can even add in the costs for repairing a home that needs a good deal of fixing up. Regardless, you will need to have enough money for the down payment, some closing costs, and inspection. Since you would be putting less than 20% down, FHA loans require that you also have private mortgage insurance (PMI), which is a percentage of your loan. This will be added to your monthly mortgage payment, and the bank will pay it out of your monthly. Being a first time home buyer probably means you need some help on getting through the process. The US Department of Housing and Urban Development (HUD) has housing counseling agencies that can give you advice on buying a home, avoiding foreclosure, and fixing your credit. You can find your local agency at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm. Lastly, you can also find local buying programs to help with buying a home, including helping with your down payment at http://www.hud.gov/buying/localbuying.cfm. If you never thought you would be able to afford a house, think again. With programs out there to help you buy your first home, you could be moving into a place before you know it!




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