Buying your First Home is a Big Decision
Buying a home is one of the greatest investments you will ever make. The best — and least stressful — way to purchase a home is to be well educated throughout the process.
Before you even start looking for a house to buy, you need to review your financial situation. This will let you know how much of a down payment you can afford and how large a monthly mortgage payment you can handle. Lenders will look at the ration of how much you make to how much you owe. Most will require that your monthly housing costs remain under 28% of your total monthly income and that your total debt is less than 36% of your monthly income.
But you should look at what fits into your budget, not what the lender says you can afford. If you are currently making a rent payment of $1200 a month and barely getting by, how could you expect a mortgage of that size with the added insurance and maintenance costs of owning a home? You have to go with what works for your budget and finances. Remember, you can always work your way up to a larger home over time.
Once you have determined how much home you can afford, you need to check on your credit report and score. Lenders will rely heavily on your credit score when deciding whether or not to lend to you. It will also help decide how much interest you will pay. Your credit score is determined by the information in your credit file. If something is incorrect, your score will be affected.
Your score is made up of your payment history, your outstanding debts and how often you apply for credit. Most lenders will use your FICO score. If you have a score of over 700, you should have no problem finding financing.
The best way to improve your credit score is to pay your bills on time. You can also pay off your credit card debt and hold off from applying for new credit to raise your score.
It is best to review your report to make sure it is accurate well in advance. It may take time to clear up any errors before you apply for a mortgage.
In today’s real estate market, sellers like to work with buyers who are pre-approved for a mortgage. Pre-approval means that you have submitted a complete loan application and that the lender has verified your information, checked your credit and determined how much mortgage you can borrow. When you are preapproved, the lender is saying that you can borrow a certain dollar amount.
With pre-approval, the seller knows you have financial backing and you know exactly how much you can spend. This keeps you from a lot of stress of worrying if you will be approved for a mortgage for your dream home. You already know what you can afford.
Take the time to prepare to buy a home before you even start looking, it will save you a lot of stress and make the process much easier.
Martin Lukac
http://www.articlesbase.com/real-estate-articles/buying-your-first-home-is-a-big-decision-83487.html
Is there something that you wish you knew before buying your home?
I am looking to buy a home for the first time. Please tell me some things that I need to take into consideration when making home-buying decisions… things that maybe you wish you thought about before buying yours.
yeah,,,how dangerous your neighbors are…
1st get an inspection done…..Very Very Important that U do this…….Especially the 1st time…….Next check out the neighborhood and make sure no pedophiles are living next to U..
Our agent somehow forgot that……..All I can tell you,, that when we have kids,,,we are moving…….
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Take a walk around the neighbourhood. Wish we had of seen or perhaps met a few neighbours….
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You want a fixed rate, other wise it will jump up to an amount you can't afford.
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Do research on real estate.
To make sure the agent isnt trying to stuff you into a hell-hole
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has anyone ever died in it
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fixed rate
neighbors
LOCATION…LOCATION…LOCATION!!!
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i wish i visited the home on a RAINY day!!! The basement is always wet! … and moldy!!! Trust me… visit on a rainy day.
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Wish I knew that one of the nearby neighbors was an axe murderer…
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YEP…THAT THE WIFE WAS GOING TO LEAVE ME AND SCREW ME FOR THE LOT!!!!!!!!!!
BRUCE HERE BYE FOR NOW!!!!!!!!!!!
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uh yeah like uh knowing that the housing market was going to crash! just make sure you understand all of the fine print before signing your life away
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Check all the gaps and cracks in the walls, ceilings. Could cause you a lot fo pain later on if you plan to stay on long term.
And as they say…location, location, location.
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Try to avoid any property that has a homeowners' association connected with it. Many newer ones do.
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Yes a house inspection company that knew what the f-u-c-k they where doing. I wish i could go back and sue them after 3 years, but i doubt i could. There was so much stuff they told me was fine which turned out to be a nightmare.
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i wish i had thought to have an expert check the foundation around the swimming pool. we are loosing dirt from that area and i am afraid we may have to have the entire thing dug up and redone.
no pool ?
the equivalent is checking the house foundation.
ALSO
check any airport flight paths to see if you are in a high noise are, same for trains, commuting, etc.
I would even check with the police to see if it is a high crime area.
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Get an excellent home inspector – and do some inspecting yourself. We found bats in our house that the inspector missed (and they are NOT easy to get rid of). You should also take a look at the neighborhood. Check out the crime reports and make sure the nearby schools are excellent ones (that will give you a good indication as to whether or not people care about their community). Make sure you're purchasing a home in a neighborhood where the economy stable. You can compare home prices at http://www.zillow.com
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Get a house inspection if you can afford it. They will give you a list of everything that is wrong. It doesn't mean that you go back on your offer, but it will definitely give you peace of mind.
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Don't mistake 'charm" for I am going to have to sink so much money into this is isn't funny. Location is important, but so is having updated systems, good insulation and a dependable functioning house. Think of it as a car, the cute little jaquar that never runs isn't so cute after a while…!
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have owned 2 old ones and 3 new ones, I will take newer any day…..been screwed by "charm"….
Taxes!!! Our taxes just went up $700/month. School district is very important; if there is a lot of development going on around you, make sure you know what the plans are for new schools and the schools which are already built near you. If your community is new and there is still building, make sure you are aware how long it will be until the community is bui8lt to max capacity. The longer it takes for completion, the slower you build equity.
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My parents used this website. http://money.cnn.com/magazines/moneymag/money101/lesson8/
Here is what is on it.
1. Don't buy if you can't stay put.
If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner.
2. Start by shoring up your credit.
Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.
3. Aim for a home you can really afford.
The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
4. Don't worry if you can't put down the usual 20 percent.
There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price.
5. Buy in a district with good schools.
In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.
6. Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.
7. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points — a portion of the interest that you pay at closing — in exchange for a lower interest rate. If you stay in the house for a long time — say five to seven years or more — it's usually a better deal to take the points. The lower interest rate will save you more in the long run.
8. Before house hunting, get pre-approved.
Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
9. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that's about eight to 10 percent lower than what the seller is asking.
10. Hire a home inspector.
Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.
Happy Home Buying! l:o)
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http://money.cnn.com/magazines/moneymag/money101/lesson8/
For some goofy reason we didn't pay any attention to the age of our major appliances & factor replacements into the cost of the condo. the summer after we moved we found out the ACs in our neighborhood had been dropping like flys b/c they were so old & the power voltage had changed. So we had to replace it & pay $5000 for new heat pump & ac unit. Def ask about the appliances & get some sort of insurance to cover repairs. You can't get it as cheap as when offered at buying time!!!
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experience
the person who buys your home will also ask the same question!
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Im 16 And When My Parents Built This House 6 Years Ago..We Later Found Out That People Could Easy Slide Credit Cards Thru The Front Door And The Garage Door To Get In. My Parents Also Hate Out Neighborhood..We Were One Of The First People To Build A House In This Complex And Everyone Around Us Has Horrible Kept Front Lawns And Theyre Just Plain Eyesores And Most Of The Kids Are Horrible O_O My Parents Said They Wish They Found A House In An Already Built Neighborhood To Save Us From That.
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any mold? carpenter ants? any other stuff that? pricing reasonable?
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make sure there are no foundation repairs you will need to fix- ITS EXPENSIVE!! also try to check if your house is near or above a mine, or any other landforms that could be harmful like volcanoes (some people really dont know) or if it is on or near a fault line. If it is near a fault where earthquakes happen and there hasn't been one in a long time then its due and dont get the house.
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Its hard to check things like neighbours and like, maybe visit the property one night (weekends are great) to see what noise levels are like.
Other things to check are:
1. Storage – make sure there is plenty of it.
2. Building (and Pest) Inspection – GET ONE!
Besides the house itself also look for things like accessable public transport, parks and shops close by, off street parking which can all add value to a property.
I was lucky enough to rent my house before I bought it so I had a good chance to get to know it before hand!
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check the neighborhood crime, check for sexual predators in area, if you have kids , see how far it is from house and the route to and from school, check the square footage of house and yard,pick a good home inspections person(via better bus. bureau), what property taxes will be.check the sub floor and rafters, check to see if it is in a flood zone,check neighbors for outside animals, …
I could go on forever, but i think this is a good start, I learned it the hard way!
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I would suggest looking at your neighbor's. You can change the house…but the neighbor's might be there for a LONG time. If you can't even think about living next to them now…just imagine 10 or 20 years down the road.
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yes.
make sure when you get an inspector, that he's good.. real good. you might really want this house.. you might show it.. you might think the inspector is doing you a favor approving the site
(i had a va loan, the sale could not go thru without passing inspection)
well for me it passed..
then after moving in .. i find out electrical outlets dont work.. i need a new septic system.. the house could not be heated in the winter…. the pipes froze in winter.. basically i got a total dive..
just make sure you get a real real hardline inspector. and make sure the septic is in pristine shape.
i hope you know what your taxes.(there could be a few of these). garbage collection.. all the little things like that are too so you know what to expect. I wouldnt get a floater loan either.. just a fixed loan. if you can ask to see the last few electric and oil bills .. so you have an idea what that's gonna be. you might ask what kind of cable/internet is around too.. dialup/broadcast tv is rough.. and i'd never buy a house without a basement.
then probably the most important thing.. is your relationship is pretty darn rock solid.. with the divorce rate what it is now.. i wouldnt buy a house if divorce is a possiblity.
good luck.
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Yes:
1) That their were moles in the back yard. They moved to the front yard; lived under my sidewall during the winter. I ended up having to repair the sidewalk because it started to cave where their old tunnels. I've heard they can also mess with your foundation (if you live further south your slab is not as deep). And can cause cracks in your foundation or walls. I have a feeling I'll have another fight with them this year. This could of been avoided if I scouted the back yard for mole "trenches" or "runs".
2) That newer houses "shift" when it rains for the first few years.. if it's new, it could shift/settle. If it does, you will probably have to repaint some things and possibly reset windows and maybe doors. Again, this sort of depends on how deep the slab is. In TX they are not very deep. But the good news.. I guess, is some of the stuff shifted back, and only needed paint.
3) Just check for cheap hardware, doors, sinks, etc. Another issue I also had was in the first 3 months of owning my house (was used, but fairly new still) I had my tub crack – can you guess why? if I tested this I would of known. When buying your house step in the tub. Does it give way a bit? (.25-1in?) if it does, someone probably did not set the mortar right. It cost almost 3k to get that fixed, because the tub had to be cut out because it was a signal piece (apparently they had to build the house around it so to speak).
*Check for pest
*Check for shifting/settling. If the house is new, be perpared – not saying it will happen, but it could
* Check for cheap hardware, doors, tubs, sinks, etc.
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Along with the things already stated……make sure the house next door isn't a rental property. We haven't had any criminals move in, but it seems none of the renters own a lawn mower.
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first home….always use a real estate lawyer for closing…your own lawyer not sellers lawyer..thats A # 1….
1 ..resale value…..check on location,school district andother stuff like shopping..
2…neighborhood…take a cup of coffee and go park the car on the street your looking at buying home..listen to some music for a few hours…You will learn a lot
3..inspect the home..A pro not you…
4..this is only my opinion…buy a two or three family home to start with…take out a 15 year mortgage,have rents from apartment(s) help pay off mortgage boy that builds up equity fast……Huge help on taxes as well…ask account or someone who does own rentals
5…if you have kids …must have a yard…a must..
6…welcome to the american dream…
6.
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A little about my situation. I recently bought my first house from a clt (community land trust). This means I got a house for about half the price on the open market, but when I sell it I'm limited on how much more I can sell it for. Basically it's an affordable home, not a quick way to make money.
One great thing I almost decided not to do was pay $100 to get the sewer line checked. If you get an older home this is a must. It was busted and the clt paid $5,000 to get it fixed.
An extension of this is the home inspection. Make sure you are there with the inspector. As a first time owner it was vital to get that extra bit of understanding.
As a first home buyer you likely qualify for some help. The bank I went through lost money with me, but did so willingly because they earned points with the feds for promoting home ownership. It was explained second hand to me, so I don't have details. The point is there are people who want and will help you to have a home.
Get to know the neighbors before buying the home. But they only really matter if they own.
Get advice from a non-profit about the process even if you're rich. It's all about incentives isn't it?
good luck
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http://www.pclt.org
(1) I wish we had thought more about resale potential – we bought a house that we liked because it was unusual, and we unexpectedly need to move and are having an extra-hard time selling for a good price because there are fewer people interested in our type of house
(2) Having a 20% downpayment is a highly recommended–puts you in a much better mortgage situation (e.g., size of monthly payments). We didn't, and thought it was fine (big mistake! we can afford the payments fine but would have been so much better off to save for a couple of years rather than spend so much money on mortgage interest)
(3) Related to #1–make sure we wanted to live here for a long period of time (5+ years); renting has the advantage of being able to move easily!
(4) I wish I knew the housing market was going to crash! We had no desire to "flip" a house or anything like that, but we were naive in thinking we wouldn't be "throwing our money away" like renting and it is turning out to be the opposite–we are stuck in a house we don't want to live in and also maintenance costs are very expensive (and we did have an inspection, and nothing has been an unexpected cost, but it adds up)
(5) Our neighbors aren't great (we have nothing in common with them), make sure to check out the neighborhood in a detailed way to make sure its a good fit!
(6) Avoid the "pressure" to buy when you find something you like–you will probably find something even better if you just keep looking.
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