Are you a first-time home buyer eager to get into the market? As a first-time buyer, you probably have many questions about the home buying process, whether you can afford a home, how to go about finding a qualified real estate professional, financing, and others. No question about it…it is a complex undertaking.
Here are steps to take to help you decide whether you’re ready to take the plunge.
1. Check the selling prices of comparable homes in your area. Do a quick search of actual multiple listing service, or MLS, listings in your area on a number of websites, including our website fabuloushomesinternational.com
2. Use Bankrate’s mortgage calculator to get an idea of what your monthly mortgage payments would be if you bought today.
3. Find out what your total monthly housing cost would be, including taxes and homeowners insurance. In some areas, what you’ll pay for your taxes and insurance escrow can almost double your mortgage payment.
4.To get an idea of what you’ll pay in insurance, pick a property in the area where you want to live and make a call to a local insurance agent for an estimate. You won’t be obligated to get the insurance, but you’ll have a good idea of what you’ll pay if you do buy. For an idea of what you’ll pay in taxes, check your local property appraisers website. Just remember that exemptions and the intricacies of local tax law can create differences between what a homeowner is currently paying and what you can expect to pay as a new homeowner.
5. Find out how much you’ll likely pay in closing costs. The upfront cost of settling on your home shouldn’t be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items like homeowners insurance or homeowners’ association fees. You can see what closing costs average in your state by looking at Bankrate.com’s annual closing cost survey.
6. Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28 percent of their income on housing costs. Go much past 30 percent and you risk becoming house poor.
7. Talk to one of Our reputable Realtors in your area about the real estate climate. Find out their professional opinion on whether they believe prices will continue falling or if they think your area has hit bottom or will rise soon?
8. Remember to look at the big picture. While a buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there’s no landlord to turn to, and these costs can quickly drain your bank account.
So consider whether you’re ready for the expense and effort of home ownership before pulling the trigger.
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