Am I Ready to Buy a Home?
As a first time home buyer, it's natural to suffer some anxiety as you make your decisions and begin the process of buying your first home. Just remember, there are numerous benefits to homeownership:
Tax benefits- Interest payments on your mortgage are tax deductible
Building equity- Keep your money invested in something you own rather than giving it away to your landlord.
Stability and security- No more rent hikes, no more moving because of someone else's say-so.
It's all yours- Your décor, your pets, your decision.
There are several questions you should consider when you are making the decision to purchase a home.
Are my finances in order? Look at the amount of debt you have. Not only will you need to make your mortgage payment each month but you will also need to factor in your monthly debt payment.
Do you have money saved for the purchase? You will need money for closing cost and a down payment of 20% to avoid paying private mortgage insurance (PMI). While it is possible to purchase a home without 20% down, purchasing without 20% down will cause you to pay private mortgage insurance. This is an additional fee each month that is added to your mortgage payment. Wondering what goes into closing cost? Click here for a more detailed explanation of closing cost.
Am I sticking around for awhile? If you are planning on being in a location for more than 5 years buying makes the most sense. Homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The numbers show that nationwide it is 37.7% less expensive to own a home than to rent.
What is the monthly cost of owning a home? Many items go into your monthly payment. When calculating your monthly payment keep in mind that you will be paying your mortgage, Homeowners Association (HOA) fees, homeowner insurance and taxes. These are just the standard items that go into your monthly payments. You can get a basic estimate by plugging the home price minus your down payment into a online mortgage calculator.
Do you know about the hidden expenses of homeownership? Many additional costs will pop up when you own a home. Now that you are a homeowner the maintaining the systems of your home is now your responsibility. When your HVAC system stops working it is now your responsibility to fix it.
Now that you have explored the cost associated with homeownership you can use these tips to make your search and transaction run smoothly:
Get help with the details. Coordinating the many details of a move can be overwhelming for even the most experienced homebuyers. Whether it is arranging tours, researching neighborhoods, or even contacting the right movers, an experienced and full-service Realtor can help you with every step of the homebuying process.
Define your needs versus your wants. Before beginning your home search, determine what it is that you and your family truly need in a new home. It is important to prioritize needs over wants.
Get Pre-approved. Having a pre-approval for your mortgage in hand will give you strength in negotiating and demonstrate you are a serious buyer.
Investigate the neighborhood. Take the time to research the schools and neighborhood activities before you decide on a home. Also, check on local codes and building restrictions for the area. You may be surprised at what you can and cannot do to your own home.
If you are interested in being added to my Preferred Buyers List for up to date listing information please contact me.