5 Questions for the First Time HomeBuyer

WHY SHOULD I BUY, INSTEAD OF RENT?

A home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you’ll enjoy having something that’s all yours - a home where your own personal style will tell the world who you are.

SHOULD I USE A REAL ESTATE BROKER? HOW DO I FIND ONE?

Using a real estate broker is a very good idea. All the details involved in home buying, particularly the financial ones, can be a bit much. 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 to know about a neighborhood you may be considering... the quality of schools, the number of children in the area, the safety of the neighborhood, traffic volume and more. 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. Your agent will explain the advantages of different types mortgages, guide you through the paperwork, and be there to walk you through and answer any last minute questions when you sign the final papers at closing. And you don’t have to pay the broker anything! The payment comes from the home seller - not from the buyer.

HOW MUCH MONEY WILL I HAVE TO COME UP WITH TO BUY A HOME?

Well, that depends on a number of factors, including the cost of the house and the type of mortgage you get. 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; the seller that you are serious about wanting to buy the house; the down payment - a percentage of the cost of the home that you must pay when you go to settlement and closing costs - the costs associated with processing the paperwork to buy a house.

IN ADDITION TO THE MORTGAGE PAYMENT, WHAT OTHER COSTS DO I NEED TO CONSIDER?

Of course you’ll have your monthly utilities. Your broker will be able to help you get information from the seller on hose much they normally cost. You might have homeowner association or condo association dues. You’ll definitely have property taxes and you also may have city or county taxes. Taxes are usually rolled up in your mortgage payment. Again, your broker will be able to help you anticipate these costs.M

THERE ARE SEVERAL TYPES OF MORTGAGES - HOW DO I KNOW WHICH ONE IS BEST FOR ME?

There are many types of mortgages and the more you know about the before you start, the better. Most people used a fixed-rate mortgage, but there are several other options. Talk to your real estate broker about the various kinds of loans before you begin shopping for a mortgage.

WHAT WILL HAPPEN AT CLOSING?

Basically, you’ll sit a table with your broker, the broker for the seller, probably the seller, and a closing agent and a lot of papers to sign. While you will get an explanation of each page, you may want to take the time to read each one and consult with your agent to amke sure you know exactly what you’re signing. Before you go to signing, your lender is required to give you a booklet explaining the closing costs, how much cash you’ll have to supply at closing and a list of documents you’ll need at closing. If you don’t get those items, be sure to call your lender before you go to closing and do not hesitate to ask any questions.