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Thursday, October 16, 2014

Major Considerations About Your Next Home

Home ownership is an American Dream so many people start thinking about buying a home early on in life. First homes, move-up homes, downsizing... some people start planning their purchases as little as 3 months in advance or as long as five years before making a move. No matter where you fall on the time frame, you should give consideration to the following home buying decisions.

How are you going to pay for your home?

Cash? Great! Skip to Now Ask Yourself These Questions below.

Financing? OK, let's briefly talk about paying for the home using a mortgage. What do financial institutions look at when they issue your loan approval?
  • Your Credit History: Are there any late payments or delinquencies? Are you working on paying down your debt? Essentially, when banks give you a mortgage they are taking a gamble that you’ll pay them back. If you can’t pay off smaller loans, it’s unlikely that they will take that chance.
  • Your Income: Do you make the same amount every month or does it vary? A consistent income is preferable since it is indicative of your ability to pay the mortgage each month.
  • Your Debt: Do you have student loans, a car payment, multiple credit card balances? While most places expect that you will have some amount of debt, too much is a red flag.
  • Your Employment History: Have you had a stable job for a while or are you always changing jobs? Are you self-employed? Banks prefer that buyers have at least two years with the same company but there are some industry exceptions.
  • Your Savings: The ability to make a down payment is essential to buying a home. Ideally, you’ll want to put down 20% of the purchase price however there are loan programs with as little as 3.5% down. Plus, you should have money to cover any additional closing costs and inspections as well as other moving expenses. 

It's OK if you need to take some time to save up more down payment, pay off debt or create record of a stable job history. You're not alone. It's OK to dream in the mean time. Your dreams will help you to know more confidently when you do find the right home.

 OK, so let's say you have that part covered, you've talked to a lender (or saved up cash) and know your home purchase budget.

 Now Ask Yourself These Questions:

  • What is your moving time frame?
  • What are the additional expenses of homeownership?
  • Who will live with you? 
  • Whose names will go on the Deed? More about Title Insurance.
  • What do you intend to do with the property? 
  • Where do you see yourself in five years? Ten Years?
  • Are you looking for a move in ready home? A home you can put your personal touches on? One that needs complete overhaul? Read more about remodeling.
  • Are you considering foreclosed homes of short sales?
  • What are your MUST HAVE features? 
  • What additional features are on your WISH LIST? 
  • Are there any features or characteristics you'd like to avoid?
  • LOCATION: City or Country? Commute Time? Nearby Schools? Nearby Amenities? 
  • How much maintenance can you handle? 
  • Single Family, Townhouse or Condo? Association? 
  • Who will have influence in my purchase decision?

Have questions about these questions?
Call me.  A little professional help can go a long way in reaching your dreams!

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