You'll gain personal satisfaction in knowing you own a home of your own.
You can deduct the cost of your mortgage loan interest from your taxes.
You can deduct the property taxes.
You will earn equity when you own a home. Your home is an investment, and the value of your home could go up through the years.
Just think about it! When you rent, you write your monthly check and it's gone forever. You are just paying your landlord’s mortgage!
2. I can't afford my dream home right now. Should I wait until I have more of a down payment, or until house prices come down?
While only you know your financial situation and readiness to buy a home, remember that the real estate market has been steadily strong and profitable for homeowners over the past several years. Home values have increased an average of 10 to 20% per year. For example, a home that cost $200,000 this year may be worth $220,000 next year. Of course, no one can predict or guarantee the real estate market's performance, but trends indicate a continuation of a strong market.
It's a good rule of thumb to buy a home you can comfortably afford and enjoy. Keep in mind that upgrading (renovating, adding-on) is often the way to obtain your dream home, as opposed to trying to buy it the first time around.
3. How much money do I need to buy a home?
This depends on a number of factors, including the cost of the house and the type of mortgage you get. There are many different types of mortgage programs. There are programs for first time homebuyers that have zero or minimal closing costs. There are programs that require little money down for your new home. A realtor can assist you with helping you understand more about financing.
In general, you need to come up with enough money to cover three costs:
Earnest money: The deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house. Earnest money can vary, your deposit generally will range from $500 - $2000.
Down payment: A percentage of the cost of the home that you must pay at closing. The more money you can put into your down payment, the lower your monthly mortagage payments will be. Some types of loans require anywhere from 3% - 20% of the purchase price.
Closing costs: Costs associated with processing the paperwork to buy a house. This cost can sometimes be rolled into your mortgage.
4. Why should I have a Certified Buyer Agent ("CBR") work for me?
The buyer's agent works in the buyer's best interest by:
Confidentiality:The buyer's agent will not disclose confidential information regarding motivation, price and terms, or anything else of a personal nature to the seller or seller's agent without your permission to do so.
Loyalty:The buyer's agent must work in the buyer's best interest at all times.
Full Disclosure The buyer's agent will fully disclose any information gained from the seller or the seller's agent that could be used by you in the transaction.
Negotiation Power: The buyer's agent will perform a market analysis on your chosen property and will provide you with an offering range for that particular property. The buyer agent will then set a negotiating strategy for you to assist you in acquiring the property at the lowest price and best terms possible.
The buyer's agent is looking in your best interest throughout the deal! For more about using a CBR during your home search, please click here.
5. Who pays for the buyer's agent?
Most commonly, the buyer's agent commission is paid by the seller from the proceeds of the transaction.
6. Should I use a real estate broker? How do I find one?
Using a real estate broker is a very good idea. All of the details involved in home buying, particularly the financial ones, can be overwhelming. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you'll want in a home. A realtor will help you find the best home for the price range that you can afford. With immediate access to homes as soon as they're put on the market, the broker can save you hours of wasted driving-around time. When it's time to make an offer on a home, the broker can point out ways to structure your deal to save you money. He or she will explain the advantages and disadvantages of different types of mortgages, guide you through the paperwork, and accompany you and answer last-minute questions when you sign the final papers at closing. You don't have to pay the broker anything! The payment comes from the home seller - not from the buyer.
7. In addition to the mortgage payment, what other costs do I need to consider?
You will have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate broker will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner association or condo association dues. You'll definitely have property taxes, and you also may have city or town taxes. Taxes normally are rolled into your mortgage payment.
