5 Questions to Ponder If Youre Thinking of Buying Your Very First Home
Written By: David Reed
Thursday, August 8, 2019
How much money do I need?
Yoursquo;ll need money for a down payment, closing costs and cash reserves. There are a couple of loans that donrsquo;t require a down payment, VA and USDA loans, but those are either reserved for certain buyers or the property is located in a rural area. Otherwise, yoursquo;ll need a down payment. There are some conventional loans that ask for a down payment of as low as 3.0 percent and FHA loans only need a 3.5 percent down payment. All loans need closing costs to pay for various services from third party vendors. From an appraisal to title insurance, there are fees. Your loan officer can provide a loan cost estimate based upon request. Cash reserves are identified as the number of monthsrsquo; worth of house payments are left over in the bank after the loan has closed.
How much can I borrow?
Thatrsquo;s a combination of current market rates, the term of your loan, your gross monthly income and current monthly credit obligations. A good estimate can be had by taking about one-third of your gross monthly income. That gives your lender an idea of what you can qualify for as it >
Am I ready for household maintenance costs?
This is something that many first time buyers donrsquo;t take into consideration. When you rent and the hot water heater goes out, itrsquo;s a call to the property manager or landlord who comes and fixes it for you. You donrsquo;t have to pay for it, itrsquo;s part of your lease agreement. The hot water heater belongs to the owner of the property who is responsible for keeping it in shape. When you own a home and the hot water heater goes out, itrsquo;s you that has to come up with the funds to fix it. Your agent will also recommend that you have the property inspected by a licensed home inspector. Yoursquo;ll get a report on the overall condition of your property as well as the condition of appliances.
Where do I want to live?
This is largely based upon how much you can qualify for. When your loan officer provides you with a preapproval and telling you how much you can finance, your agent then locates different areas of town that fits into your budget. Professional agents know the demographics and home values in all areas of town, some you may not even know about. Most buyers want to buy in an area that is close to work with an easy commute. Still others like the urban life>
Do I really need an agent?
Yes, you really need an agent. Donrsquo;t try to find a home and negotiate a price on your own. Yoursquo;ll be dealing with another agent who excels at negotiations. You need someone with the same skills on your side. And one other thing, you wonrsquo;t need to pay for your agentrsquo;s services, the sellers take care of that.
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