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Are You Buying Your First Home Consider These Factors
f you're a renter and cover the buying and selling
thinking about purchasing costs? That depends on various
your first home, here’s economic factors. Most parts of
what you should consider: the country have an average of
five percent appreciation per
1. Consider how long you plan to year. In this case, you should
live in your home. plan on staying in your home at
least three to four years to
Here’s what can happen. Say you cover buying and selling costs.
buy your dream home. Or, maybe If the area where you buy your
you’re living the first part of home experiences an economic
your dream simply by purchasing upturn, the length of the time to
your first home. And then word cover these costs could be
comes. That great job across the shortened. The reverse scenario
country? Congratulations! You got could also take place.
it! The thing is, you’ll be
moving out of this great home 2. Think about how long your home
after just a short time. For will meet your needs.
various reasons, you may not have
figured you’d be moving so What features do you require in a
quickly. Unfortunately, you may home to satisfy your lifestyle
end up paying money in order to now? Will your needs be changing
sell your home. And the value of in the future?
your home may not have
appreciated enough to cover the For example, a two-bedroom
costs that you paid to buy it, dwelling may be perfect for a
and the amount it will cost you young couple with no children.
to sell it. However, a growing family could
quickly outgrow the space. In
Just how long does it take to that case, it might be smart to
consider a home with room to comfortable borrowing as much as
grow. And maybe an attic could be you qualify for? Or is that the
converted to a master suite. By path you want to take, since your
taking into consideration the increasing salary and growing
things you’ll require from your earnings potential will make that
home in the future, you’ll be more expensive home the right
better able to focus on the right choice right now? Make sure that
home for your entire family for whatever you do, it's within your
right now as well as for the comfort zone.
future.
If you use an online calculator
3. Look at your credit as well as provided by a company that
your overall financial situation. matches your needs to the best
lender, you can quickly get a
The right company can put you quote on home mortgage interest
together with the lender that’s rates for you.
right for you. But you should be
realistic about your current Have you heard of the "28/36"
financial situation. For example, rule? That says that your monthly
a less than perfect credit score housing costs should not exceed
won’t keep you from working with 28 percent of your income, and
a lender who will arrange the your total debt should not exceed
loan that’s best for you, but you 36 percent of your total monthly
might have to pay a slightly income. But lenders often make
higher rate of interest and loans customized to a particular
higher fees. Right now may or may person's situation. The type of
not be the best time for you to loan depends on several factors
buy a new home. Ultimately, it’s including your assets, credit
a decision that only you can history, job potential and other
make. Do you feel less than items. Sometimes, lenders can
push the ratios up to 40-60% or You may get a loan with a payment
higher. With the range in plan that is very attractive to
options, it’s important to know you.
you’ll have the opportunity to
work with a lender you feel 5. It’s your first home? Be aware
comfortable with – a lender who that there are additional costs
will customize a loan to home ownership.
specifically to your needs.
What are some of the home
4. Consider where the money for ownership costs that you never
the transaction will come from. had to think about as a renter?
Maintenance and home improvement
Homebuyers typically need money costs, to name just two. And
for the down payment and closing there are taxes and insurance
costs. But with a variety of loan costs as well. With a
options, a lot of money saved for condominium, there may be an
a down payment is not always owner’s association fee. If these
necessary. One factor: can you costs are a concern, make sure
prove that you are a good you let your lender know you’d
financial risk to a lender? like to limit these. And although
Perhaps your credit is not the these costs are very real, the
best. But you have managed to bottom line for many people is
save 10-20% for a down payment. that they are far outweighed by
In that case, your lender, when the many joys, conveniences, and
putting together your customized ultimate financial rewards that
loan package, may feel that you home ownership can bring.
are indeed a good financial risk.
About the Author:
Matt Schaub and Silas Ellman started ReallyGreatRate with a simple idea: give every consumer the speed and convenience of online loan service, while providing the most personalized financial solutions available. For more free info, go to ReallyGreatRate
Read more articles by: Matt Schaub
Article Source: www.iSnare.com |
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