5 Questions for The First-Time Home Buyer
Usually, a first-time homebuyer picks out a house before lining up financing, but it should actually be the opposite. Buyers often call a Realtor first and then the Realtor refers them to a mortgage person. Realtors are there to guide first-time homebuyers through the entire process. This can start by providing names of reputable lenders with a proven track record that you can individually interview to find out which mortgage lender and which loan product is going to be the right one for you.
Before you actually set your sights on viewing properties, sit down have a long hard look at the pros and cons of homeownership as well as your current financial situation. Establish what you feel you could afford based on your budget.
Ask yourself these five questions then contact a Realtor and / or Lender:
1) How much can I afford?
It may be hard to figure out how much you can truly afford. The very best ratio to have is one-fourth of your income going toward house payments. This means net income, or 25 percent of what you earn after taxes -- lenders calculate using gross income. "Anywhere between 25 (percent) and 32 (percent) is safe. Anything over 35 (percent) is the danger zone.
A higher ratio puts you at risk if anything changes. Insurance or tax rates can increase, putting you over your monthly budget. Then there is the prospect of job loss. With 25 percent, even with the loss of one income, you can still keep your home,
You should essentially know your financial situation before you approach a lender and borrow accordingly. A 30-year fixed mortgage is preferable. Chart out how high your payments would be at different rates by using a mortgage calculator. You'll find one at: www.sandiego-ca-homes.com. Once you've determined your monthly principal and interest, factor in taxes, insurance and any HOA/Condo fees and special assessments that may apply such as Mello-Roos, as well as utilities.
Once you know what you can afford to pay on the mortgage, you can figure out your housing price range.
2) What are my costs outside of the loan?
First-timers tend to miscalculate the total tab for sealing the purchase and the cost of maintaining a home.Have a thorough conversation about down payment costs and closing costs, You need to know the total out-of-pocket costs. Next, make sure you consider all the monthly charges.
If you're buying a fixer-upper, get several contractor bids so you know what lies ahead.
You always have to be prepared, new or old, to make any repairs, If your mortgage is at 25 percent of income, repairs can bring your cost to 30 percent. We always say you should have three months of basic living expenses in a very liquid place, and part of that is your house emergency fund," Cecere says. Finally, double-check utilities and tax costs to avoid nasty surprises.
3) What do I need in a neighborhood?
I always sit down and say, 'Give me your wish list,' What are the must-haves?"
Your particular lifestyle is key. What do you do when you come home?" That can help you determine whether proximity to a gym, park or good restaurants matters.
I urge buyers to consider how they will get from home to other places. Walking three blocks to a bus stop when it's 90 degrees can be less refreshing in the blistering heat. If you drive, try out the route before you buy. Check out potential neighborhoods at different times of day,
Sure, look at the MLS, see the reports, but walk the neighborhood.
4) Will this house fit my long-term goals?
While you have to make a purchasing decision based on your current financial situation, you should imagine your future personal and work life. Are you going to grow your family? and How many bedrooms do you need? If you think an elderly parent may move in or you'll need a home office, include that in your decision. Don't forget about schools. Sometimes, paying more for a house can be cheaper in the long run. A pricier home in a better school district can be cheaper than a lower-priced home plus private school for 13 years. This home will let us go for public school and not pay $50,000 for private school, may be the better course of thought.
5) Am I prepared to be a homeowner?
Whatever your money attitude is, when you have a home, a lot of your money will go (to it), A lot of your time will be spent dealing with your home. Make sure you understand what's involved. You should ask yourself before buying if you have good spending habits.
If you're ready and buy responsibly, homebuying can absolutely be a wise financial move. Owning a house is still better than renting, and you should absolutely be able to find a great house for what you can afford.
Call me if you would like to get started. You can reach me at 858-603-7879 or email me at robert@sangiego-ca-homes.com
Labels: California, home purchase qualification, home purchases, home search, homes, homes for sale, housing, immobilien, lenders, real estate, real estate agents, realtors, san diego, san diego home
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