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Thinking about purchasing a home of your own? Keep these critical considerations in mind: How long you plan to live in the home.
What if you purchase a home and get a job transfer or decide to move after only a short time? The value of your home needs to cover the costs that you paid to buy the home and the costs that it would take you to sell your home. I want you to be able to sell within a year if you need to! Your financial health - your credit and home affordability.
Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Is your credit good? While you can always find a lender to lend you money, solid lenders are more skeptical if your credit history is not good. There are first time home buyer programs available with no down payment or low down payment options. Make sure that whatever you do, it's within your comfort zone. To determine how much home you can afford, talk to a lender or go online and use a "home affordability" calculator. The "28/36" rule means that your monthly housing costs can't exceed 28 percent of your income and your total debt load can't exceed 36 percent of your total monthly income. Depending on your assets, credit history, job potential and other factors, lenders can push the ratios up to 40-60% or higher. While I am not advocating you purchase a home utilizing the higher ratios, its important for you to know your options. Where the money for the transaction will come from.
Typically homebuyers will need some money for a down payment and closing costs. However, with today's broad range of loan options, having a lot of money saved for a down payment is not always necessary. Rural is zero; FHA 3-5%; Conventional 20%; Homepath 3.5% The ongoing costs of home ownership.
Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium, townhouse or in certain communities, a monthly homeowner's association fee might be required. Escrow accounts are normally set up where these amounts are added to your payment. Real Estate is a people business. Using and abusing many agents just to play lookie-lou on the notion that "someday I'll be ready" is for the birds. If you want your home search to be taken seriously, then you need to take the role of my professionalism seriously. Start your home buying process on the right foot will lead to less hassle and frustrations later. Hire a professional and respect their knowledge. If they don't educate you, then you need to find someone who will!
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