A home is more than a financial asset. It’s a place where you can live, raise your children, and it’s also a plan for the future. All Americans should be able to own a home. Here are some tips to help first-time homebuyers.
Knowledge is believed to open doors. This is true even when you are looking to buy a house. You need to be able to navigate the home-buying process from start to finish. These questions and answers are carefully chosen to provide a basic understanding of home buying. These steps will help you get started and give you the information you need to guide you through the whole process of home buying.
1. HOW DO I KNOW IF I’M READY TO BUY A HOME?
Ask yourself questions to find out.
Are you able to provide steady income, usually a job? Are you a regular employee for the past 2-3 years? Are my current earnings reliable?
Are my payments on time?
Are there any long-term outstanding debts such as car payments or mortgages?
Are there any funds that I can save for a downpayment?
Are I able to pay my mortgage each month plus any other costs?
You are likely ready to purchase your home if you answer these questions “yes”.
2. How do I begin the process of buying a home?
Begin by assessing your current situation. Is it possible to purchase a home? What amount can you afford for a monthly mortgage payment. What amount of space do you require? Which areas do you prefer? Once you have answered these questions, create a “To Do List” and begin doing casual research on property. Talk to your family and friends, drive around neighborhoods and check out the Foreclosure Listings section in the newspaper. You can also use the internet search and the “Homes” section of the newspaper.
3. HOW IS PURCHASING a Home Different from RENTING?
They don’t compare well. Renting has the advantage of being free from most maintenance responsibilities. Renting can be a great way to build equity and take advantage of tax advantages, as well as protect yourself from rising rents. You may also be restricted from decorating the property without permission.
There are many advantages to owning a house. You are creating equity by making a mortgage payment. This is an investment. You can also get tax breaks for owning a home. These will help you deal with new financial responsibilities, such as insurance, real estate taxes and upkeep. They are well worth the security, freedom, and stability that comes with owning your home.
4. HOW DOES A LENDER DECIDE THE MAXIMUM AMOUNT OF LOAN THAT IT CAN AFFORD TO USE?
Your debt-to-income ratio is the ratio of your gross income (pretax) to housing and other non-housing expenses. Non-housing expenses are long-term debts such as student loans, car payments, alimony or child support. Monthly mortgage payments should not exceed 29% of gross income. The mortgage payment should be combined with non-housing costs, 4, should not exceed 41% of gross income. Also, the lender will consider cash available for closing costs and down payment, credit history, and other factors. When determining the maximum loan amount, consider your credit history.
5. HOW DO I CHOOSE THE RIGHT REAL ESTATE AGENT
Ask your family and friends to recommend an agent. Before choosing an agent, make a list and speak to all of them. You want an agent who is able to listen and understand your needs and who you can trust. An ideal agent is familiar with the area and can help you find the right property. You want to feel at ease and have access to all the real estate information you require.
Before you meet any real estate agent, make sure to check out the property prices in the area.