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What First Time Home Buyers Should Know Before Closing

July 19th, 2017 5:39 AM by Jackie A. Graves, President

Buying your first home is a large investment. Educate yourself on the common mistakes made with mortgage loans, down payments, and taxes.

When you’re a first time home buyer, it can be difficult to know where to begin in the buying process.

Can you trust the information you’re reading or being told about mortgages, down payments, property taxes, loans?

Luckily, there’s research you can do on your own and advice provided from professional agents and home buyer assistance programs.

Important steps for first time home buyers:

  1. Determine how much of a house you can actually afford
  2. Get approved for a mortgage
  3. Hire a reputable, professional team

This is an abbreviated version. Feel free to read the full article here.

Determine how much of a house you can actually afford

Everybody has their idea of a dream home. Maybe yours has a walk-in closet, an inground pool, a library, etc. And while your dreams of owning a home can come true, it shouldn’t put you into serious debt.

According to mortgage loan company Fannie Mae, potential home owners should realistically spend no more than 28% of their income on housing.

Spending more than 30% puts you at serious risk of becoming “house-poor,” which refers to a person who spends a large portion of their income on homeownership including mortgage payments, property taxes, maintenance, or utilities.

So when you begin your initial search of home listings in your area, there a number of monetary calculators to keep in mind beyond the home’s listing price.

Get approved for a mortgage

What is a home mortgage loan?

Applying for your first home mortgage can be pretty intimidating. But arming yourself with knowledge makes you one step closer to being an experienced home owner!

A mortgage is a loan secured by property or real estate. A homebuyer receives the money necessary to purchase a home and in exchange the money lender is promised to be paid back within a certain time frame and at a certain cost.

A mortgage is legally binding. While you are the possessor of the home, the loan lender owns the property until it is completely paid for.

As so, the lender has the right to legally claim your home if you do not follow the terms of the loan.

How do I apply for a home mortgage loan?

To learn how to apply for a home mortgage, feel free to read the entire article.

Hire a reputable, professional team

Even experienced home buyers need help from seasoned professionals to be sure everything goes smoothly and they’ll have all their questions answered unbiasedly.

Real estate agent, mortgage professional, real estate attorney

If you’re new to the housing market you should hire a real estate agent, a loan officer or broker, and maybe a lawyer.

Home inspector

You should hire an experienced home inspector while you are under contract and on the day of the closing. If two inspections sound like overkill, just remember that you’re making a huge investment and a lot can go wrong in a house in as little as a night, like flooding caused by bursting pipes. You’ll want to have a detailed inspection done of the plumbing, roof, electrical wiring, etc.

Down payment assistance programs

There’s also something called down payment assistance programs that many first time home buyers overlook because there’s a stigma that it’s only for low-income home shoppers. But that isn’t true.

There are down payment assistance programs for mid-income home buyers as well. These programs include a handful of lender who can offer no-interest loans or grants.

Don’t just avoid becoming house poor, save more money

Being aware of the aforementioned steps when buying a home will hopefully keep you from becoming house poor. But, you shouldn’t stop being smart about saving once you close the deal on your new home.

As a responsible homeowner, you’ll most likely also have to pay for other important expenses such as health, life, and car insurance for you and your family. And since you just moved, it’s the perfect time to shop around for a new insurance company that offers cheaper coverage.

You should look into bundling your home, auto, and other insurance policies under one insurance provider to unlock the most discounts.

And don’t be afraid to shop around for new insurance policies from different providers every 6 months to a year. It could end up saving you hundreds of dollars a year.

Insurance rates are constantly fluctuating and it’s up to you to stay on top of policy changes or discounts.

By Micaela Allen - To view the original article click here

Posted by Jackie A. Graves, President on July 19th, 2017 5:39 AM

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