"I Want To Buy" series Part 2

In “I want to buy, but where do I start?” We covered the first steps of purchasing a home.  You looked at your incoming and outgoing money & decided how much a month you can afford; you have a down payment; you have 2 years worth of payments set aside for emergencies and maintenance costs.

You spoke to the recommended lender and were told you can afford $180,000.  My first question is, “Do you know how much a month that is?”  Let’s assume you have a 20% down payment, your loan is for 30 years and you are getting a 5% fixed rate. Your payment a month will be about $775.  Not bad!  But wait… that does not include insurance.  You need to always remember that when the lender tells you what a payment will be, even if it’s approximate, to ask if that includes insurance.  You may qualify for $180,000, but that does not mean you can afford or want to pay that much a month.  You need to decide your comfort level.    

Now comes the fun part!  Let your REALTOR know how much you qualify for and the maximum you would like to spend on a home.  If you do not want to spend more than $160,000 even though you qualify for $180,000 tell them.  A Realtor’s job is to help you find a home and negotiate a contract for you.  Not rack up the money!  Any good Realtor will be looking out for your best interest.

Now you get to search through homes.  Dust off that list that you made of your needs and wants and compare it to what you find.  Whatever you do, do NOT fall in love with any one house.  This is where you need to throw emotion out the door and make sure you do not get attached.  Just as sure as the house that you could die for goes under contract, another one will that you will love equally will come on the market soon.  Also, be picky!  This is a big decision, and one you will live with for quite some time.  Make sure you get what you need.  Don’t buy a home that needs “TLC” if you are not willing or have the money to give it the “TLC”. 

Check out tomorrow’s post for more of buying your first home!