12 June, 2018
Buying Your First Home like a Seasoned Pro
Number one reason why people buy a house is the pride of ownership. Home ownership gives you the sense of security and permanence. Once you decide that buying a property is the right decision for you, there are several factors to consider. The better you are prepared, the less difficult the entire process will appear to you. When you are fully armed with the proper information, you will be able to face the world of real estate and banking with confidence and poise of a pro.
Reasons to Buy a Property
Appreciation – Although the real estate market goes through its ups and downs, owning a property is a good investment of your hard-earned money. Location really matters, as it will have a great impact in the future when you decide to sell it. Regardless of present economy, the value of many homes has shown consistent appreciation.
Interest Deductions – Your mortgage interest is fully deductible on your annual tax report. This is the most important reason to buy a home instead of renting. First time homebuyers are also able to deduct real estate property taxes. Preferential tax treatment is offered to capital gain assets.
Equity Loans – You will be able to borrow against your equity for home improvements, college expenses, starting new business or medical expenditure. The terms and conditions vary from state to state.
Lasting Investment – Paying rent every month could be money thrown away, whereas investing in a property can be money saved. Upgrading the property always brings return on investment and can greatly enhance the value of a home.
Down Payment and Bad Credit
You are the best judge of your financial situation, and you will ultimately decide if you are in a position to buy a home. However, there are several options to help the first time homebuyers to achieve their dream. Many people are good candidates for federal mortgage programs as well as local home buying programs. The amount of down payment will certainly depend on your income and ability to pay, but other factors are also taken into consideration.
The veterans, medically compromised individuals or single parents are now regarded as potential candidates for the government housing development. HUD homes are sometimes a great deal. Become familiar with your local housing counseling agency. They most likely have all current listings and they will be able to help you with the process. Bear in mind, down payment amount will determine the amount of the percentage on your loan and monthly payments. The down payment does not include any closing costs. These can be added to the loan or collected at the time of closing. Most banks will require 20 percent to consider you eligible for the loan. You should fully research FHA loans options, which only require three percent down payment.
How to Calculate Eligibility for a Loan
This part is easy as any real estate and bank website provides the loan calculator, and they all follow the same structure. You will be asked about your income, the location of the property, the amount of the loan, and estimated interest rate. Your loan potential will be calculated based on the parameters you provide. Be careful about providing any of the personal information as this will lead to relentless calling and mailings from numerous agencies around the country. Once you have a basic idea of how much you are eligible for, you then can start looking for properties in your local area and finding a reliable real estate agent or broker.
How to Find the Real Estate Agent You Can Trust.
Word-of-mouth references are invaluable when it comes to finding the best real estate broker. Contacting your friends and family is always highly recommended. The bottom line is that you must feel comfortable with the person who will be instrumental in guiding you through the entire process. It should be someone experienced, with a great knowledge of the local area, most preferably an agent who lives in the town, where you are considering purchasing a home.
Personal references should play a major role when trying to establish a good relationship with any real estate agent. Your real estate agent should be able to provide you with all of the details about the community you are considering as a permanent location for your home. Topics such as school system, neighborhood watch, police department, social events and the network of healthcare should all be covered by your agent. If you don’t have a financial advisor, your broker’s help will be imperative in contacting the proper lender and have your loan approved successfully and quickly.
You are now empowered with the information to find your dream home. The present buyer’s market offers endless opportunities. First time homebuyers are encouraged to stop renting and buy the home of their choice.