More Tips for First Time Homebuyers

More Tips for First Time Homebuyers

 

Outside of classes, how do you figure out the main things you need to know for the buying process?  Here are some suggestions:

 

• Consider numbers experts give you on affordability as a ceiling, not a floor. Real-estate people often say the sum of your monthly mortgage payment, homeowner's insurance and property taxes shouldn't be more than 28% of your monthly gross income.  Meanwhile, your monthly debts, including your mortgage payment, shouldn't be more than 36% of your monthly gross income, they say.  But think of your circumstances.  Do you want to spend a lot of money at this stage of life on traveling?  Do you want to put money away so you can stay at home after a child is born?  Count your own values, dreams and limitations in your calculation.

 

• Try to put down at least 20% of a home's cost. Otherwise, you may have to buy "private mortgage insurance." If you don't have that much cash, consider a "piggy-back loan," which basically involves multiple mortgages for different percentages of the home's price.

 

• Borrow what you need to borrow, not what you can borrow.  Lenders will often offer you the maximum you can borrow but don't feel it's necessary to go maximizing your borrowing capacity.  If someone hands you a credit card, that doesn't mean you have to go max it out.

 

• Hire a lawyer, especially your first time out.  When you find a place you like, a lawyer can help you spot objectionable phrases and clauses that find their way into contracts.  If you don't have a lawyer who is familiar with all the details, all the legalese in the document and jargon, you're not going to understand it.

 

Talk to us about your buying options, and what might be best for you.  When buying real estate, one size does not fit all.  Everyone's circumstances are different, so there is no steadfast rule that covers every situation.  We'd love to assist you in answering any questions you may have. 

 

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