Something I've always made a point of emphasizing with first time home buyers - and with long time homeowners and move up buyers as well - are the "other costs" associated with homeownership. Many first time homebuyers are focused on the principal and interest part of the mortgage payment, and when they use an online loan calculator (or often times when speaking to their loan officer), the attention remains on the principal and interest portion of the payment only. And it recently came to my attention that homeowners seeking note modification may also be focused only on the mortgage portion of their monthly payment.

But, what about the other expenses that will be used when a buyer or homeowner is being qualified for their home loan:

Property Taxes

Homeowner's Insurance

Mortgage Insurance

Homeowners Association Dues

Flood Insurance

And how about utility expenses - electricity, natural gas, heating oil, wood/pellets, water, sewer, trash pickup- are these expenses being included in your budget? Or maintenance costs, landscape maintenance, roof repair, paint/stain, septic system maintenance...have you seen the movie "The Money Pit"? This can be a lengthy list! Have you incorporated these other expenses associated with the home you are purchasing in to your budget?

So, my tips for today...

First time homebuyers - make sure you are budgeting for all the costs associated with homeownership AND that you have the cash available to make the repairs and/or do the updating you plan to do to your new-to-you home.  One of the tools you may use to accomplish this goal is a loan program that will assist you with meeting your objective to purchase a home AND do repairs/updating, like the USDA Guaranteed Rural Housing loan or a Remodel/Renovation loan.

Existing Homeowners seeking Note Modification - consider all your monthly housing expenses when looking at the terms your lender is offering you. Don't you want to turn the majority in favor of the homeowners who successfully accomplished their goal of remaining in their home through note modification?

See you at the closing table!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com