Read this to take that first step! Tired of renting? Buying your first home will be one of the biggest decisions you’ll ever make. The process in itself doesn’t have to be scary if you follow some basic rules. The fact of the matter is, if you can pay rent you can pay a mortgage. The first thing you want to know is how much can you afford. Never live above your means; that’s where a lot of people get into trouble. There are plenty of mortgage calculators online which can give you a idea of what payment range is affordable to you. You can also keep it simple by applying a common sense. You want to have enough room to make your mortgage payment along with your other monthly expenses without feeling financial suffocation.
The next step is discovering where you want to live. Sure, South Beach is great, but can you really afford to live there? During the latter part of my life, I grew up in the Northern Virginia/Washington DC Metropolitan area. If you are familiar with the area or have flipped through the real estate pages in the Washington Post, then you know the average price of single family homes could very well start at $500,000 and up. This would be an example of a serious financial investment, and you would want to be sure you can handle it. I see a lot of people call up their agents because they’ve found the house of their dreams but they didn’t do the math first. As a result they walk away extremely disappointed at having wasted time. Eventually reality strikes and they find out they cannot afford the home. It’s ok to search for homes in a certain geographical location; you just want to make sure its well within your price range.
Take the guess work out by becoming pre-approved not pre-qualified because there is a difference. Pre-qualified means that an individual has looked at some factors and income to determine a possible buying range. Pre-approved means that the bank has actually pulled your credit report and can give you detailed, specific information as to what you qualify for. With that information in hand, you can objectively start the house shopping process. You can also take it one step further by asking how much a hypothetical mortgage payment would be, leaving no room for surprises.Â
Is it the agency or the agent? Nothing is more annoying than someone with a bad attitude who’s just trying to hear their self talk. Make sure that you are working with someone that respects you and that will listen to you. If you like the agency but you’re not feeling the agent, keep it moving and ask for someone else. Sometimes you can luck out by asking around and getting some referrals from friends. Try doing a Google search to see if someone else has worked with that particular agent to get a feel for their character. In addition you can check your local better business bureau to determine if there are any complaints against the agency as well.
Ready to close the deal? Don’t forget that home inspection. You want to know what you’re getting yourself into to prevent any surprises down the line. Even if you are purchasing new construction you should still request the inspection. Just because it’s newly built doesn’t guarantee the home is free from error. If a major problem is discovered you can request for the correction to be made in your offer to the seller. If you are not able to come to a resolution walk away and continue searching.
One of the greatest benefits of home ownership is knowing that you are investing your money in your own home, not your landlords. If your rent is $1,000 per month at the end of the year you would have paid $12,000 for your landlord’s mortgage. Why not take that 12K and put that into your own mortgage. One of the advantages of owning is knowing that interest paid, becomes deductible when you file your taxes at the end of the year.
For more information on affordable home purchasing visit http://www.hud.gov/. Also check with your local government to see if they have a first time buyers program. If you are going to need assistance with your down payment, an FHA loan might be beneficial to you as well. Make sure you discuss this option with your lender. Lend American has a good FHA program. For more information you can visit their website: http://www.lendamerica.com. For 2009 they have introduced an $8,000 tax credit for first time homebuyers. You can find out more about these credits on irs.gov
Always remember to put God first in everything you do and no good thing will he with hold from you.
Matthew 7:7. “Ask and it shall be given, seek and you shall find, knock and the door will be open to you.” |
