For Home Buyers
How much home can I afford / qualify for?
Finding the right home
Finding a real estate agent
Special programs for first time home buyers
How are housing market conditions in my area?
What are interest rates doing?
What are some typical costs associated with buying a home?
How much home can I afford / qualify for?
The amount of home you can afford is based on the amount of mortgage loan you can
comfortably support. Generally, the amount of mortgage you qualify for is based
on three factors:
- Your monthly payments as a percentage of income.
- How much cash you have for the down payment and closing costs.
- Your credit history.
Finding the right home
It's best to be brutally honest with yourself about the
features that you are looking for in a home. Is commute time important to
you? Do you want a large, or a small yard? How much cooking do you do,
and how important is the kitchen area of your home?
Do you desire a newer home, or one in a more established neighborhood? Is
storage space important to you? If you have children, how would you rate the
schools in the area?
One good idea is to write down a checklist of features you are looking for in a
new home, and use this as a basis when comparing several different options.
Search homes for sale on UltimateHomeListings.com.
Finding a real estate agent
You can go a couple of different routes when using the services of a real estate
agent. Some buyers prefer to do their own home shopping, and then employ a
real estate agent to assist with the purchase transaction, while other buyers prefer
to involve a real estate agent in the very beginning of the home search.
It is best to give the real estate agent a good idea of the features you are looking
for in a home, and the neighborhoods that you are interested in. The checklist
that you created in thinking of what kind of home you are interested in should help
with this. Once your agent is aware of the qualities of a home that are important
to you, he or she can quickly narrow the large range of options down to the ones
that are most likely to pique your interest. When viewing homes with an agent,
don't be hesitant about telling the agent what you do and do not like about that
particular home. This will allow the agent to find other homes that more closely
match what you are looking for.
Special programs for first time home buyers
Owning your own home is a cornerstone of the American dream. Unfortunately,
first-time home buyers are often overwhelmed by both the process and the expense.
Thanks to special loan programs, you should be able to qualify for
a mortgage -- even if you're a first-time home buyer, or lack the standard 20-percent
down payment.
First time home buyers have many options available to them these days from special
mortgage programs for limited credit to down payment assistance programs.
Here is an excellent website with plenty of useful information for the
first time home buyer.
How are housing market conditions in my area?
Real estate agents and many home buyers are interested in knowing local housing
market conditions. This might assist a buyer in deciding whether or not the
time is right to purchase a new home.
The Realty Times has an excellent summary of local housing market conditions for many parts of the country, and is worth checking
out from time to time.
What are interest rates doing?
It's important for the home buyer to be aware of where interest rates are at, in
order to estimate monthly house payments. The higher the interest rate, the
less home the typical buyer can expect to afford.
Also, knowing whether interest rates are trending upward or downward might sway
a puchase decision: if rates are generally increasing, it's best to lock in
sooner rather than later.
What are some typical costs associated with buying
a home?
Here is a general idea of some of the costs associated
with buying a home (the buyer should seek to get more precise numbers for their
own situation):
- Appraisal
(usually costs $300-$350) and is usually paid when ordered by the lender, but
may be paid at closing.
- Home Inspection
(cost varies with size of property, but a general range for a 1,200- 3,500 square
foot home is $300.00- $450.00). It is usually paid upon delivery of services
or soon thereafter, but may sometimes be paid at closing.
- Survey (cost varies with the size of the property).
Buyer may elect to waive a current survey if lender does not require a recent one
or if you have access to the survey that was done for the seller. Usually
paid upon delivery of services or soon thereafter.
- Wood-destroying insect inspection (a report costs
$65-$75). It is often paid at closing.
- Water and septic inspections may be required by
the lender if the property uses well water and/or has a septic system and is usually
paid upon delivery of services or soon thereafter.
- Closing attorney (usually runs between $350 -$500
for a typical closing). Additional fees from the closing attorney may be for
wiring, recordation, or courier fees may also be charged and these are paid at closing.
- Title Insurance ($2/$1000 of purchase price is
usually what it costs) and is usually paid at closing.
Using seller’s existing title insurance company sometimes gains a discounted
rate.
- A buyer’s loan program determines other costs
such as: escrow amounts for taxes and insurance, points (1 point equals 1% of loan
amount), documentation fees, application fees, credit report cost, etc.
These can be negotiable.
- Once a lender has been chosen and he has a buyer’s
information he/she is required by Federal law to give buyer/s a Good Faith Estimate,
which should be a very close approximation of closing costs, within 72 hours of
loan application. If the type of loan
selected changes, however, a new Good Faith Estimate should be provided.
- Ad Valorem taxes- cost depends on tax rate
and date of closing.