Buying a Home
So you are thinking of buying a new home. Congratulations!!! Buying a home will most likely be the largest financial transaction in your life, so I am here to help you navigate the process. You can use www.SheriHipsley.com to search homes for sale, get Maryland Public School information, use the mortgage calculators, and get helpful home buying tips.
The home buying process can be complex, however, there are great benefits to owning your own home. Not only are you providing yourself and your family with a stable living environment, your hard earned money will be going toward the equity of your home; unlike rent, where the money you pay is never seen again. Over time, as home values increase, your equity will increase. It's like a built-in savings plan. You also receive certain tax benefit when you purchase a home such as being able to deduct the interest you pay on your mortgage and possibly some of the cost associated with purchasing your home.
With the low mortgage rates we are currently experiencing and the recent decrease in home values, buying a home now is a great idea. Often times you can buy a home and pay less per month than you would pay for rent. And it only gets better for first time homebuyers. Did you know, if you are a first time home buyer and you purchase a home in 2009, you may qualify for up to $8000.00 in a tax credit?
I have put together some tips to help you through the process.
1. Decide What You Can Afford. Depending on your current debt, you typically can afford a home that is 2 to 3 times your current income. It is important that you are comfortable with your payments.
2. Start Saving For Your Down Payment and Closing Cost. Currently FHA requires a down payment of 3.5% of the sale price and a conventional loan requires 20% down. There may be other loan programs, such as a VA loan, that do not require any down payment. There are also programs that are available from time to time to assist with your downpayment. Your lender will be able to advise you approximately how much money you will need to bring to closing. Closing cost typically run between 4% and 6% of the sale price and include items such as the appraisal, the credit report, transfer tax, recording tax, escrows, land survey, title insurance, mortgage insurance, notary fees, deed recording, homeowner's insurance, private mortgage insurance and any loan origination fees or discount points. Don't let this scare you, your real estate agent can help you negotiate a contribution from the seller to help pay for these fees.
3. Get Pre-approved. Talk to your mortgage consultant about getting pre-approved. This will help you determine how large of a mortgage you can afford and lessen your anxiety when searching for a new home. It will also help your negotiating power if a seller knows you are already approved for a mortgage. Your lender will let you know the current interest rate and advise you on programs that may be available to assist you with the down payment. To make the process smoother, you should start getting together the documentation the lender will need to get you pre-approved. Typically, they will ask for 2 current pay stubs, w-2's or tax returns for the previous two years, 2 current bank statements from your checking and/or savings account, and account numbers for any credit accounts that you currently have.
4. Develop Your Wish List. You need to decide where you would like to live and what you need and want in a home. You may want to start researching neighborhoods where you would like to live. I tell my clients to check out the local school systems, visit the local police stations and ride around the neighborhood at different times to get a sense of what is going on. After you have done your research, you should make a list of three or four neighborhoods where you would like to live. Then you can develop your wish list for the home. Decide what you need and want in a home, then prioritize your list. You have to be realistic, keep an open mind, and be flexible when searching for a new home. You do not want to miss out on a great deal because you told your realtor to search for only homes with 2 bathrooms and there is a great home, at a great price, with only 1.5 bathrooms.
5. Contact a Realtor. Contact a Realtor. Contact a Realtor. I can't say this enough. Find an experienced Realtor who can guide you through this process. You need to find someone you trust and ultimately, someone you like. You will be spending a great deal of time with this person as you search for a home and navigate the home buying process. Your Realtor will help your find your new home, assist you with preparing your offer, assist you with the proper paperwork, represent you in the negotiations, help with the inspection process, do everything possible to get you to the settlement table, and will look out for your best interest through the entire transaction. Since the seller usually pays the commission for the buyer's agent/broker, there is no reason to go through the process without representation.
If you don't currently have a Realtor, feel free to contact Sheri Hipsley at 443-756-5041. Whether you are a buying your first home, selling your current home, or just have a real estate question, I can help you. As a full time Realtor with Advance Realty Direct, I have the experience and knowledge to guide you through the process.
Visit my website at www.SheriHipsley.com to search all Maryland Homes For Sale, including homes for sale in Baltimore County, Baltimore City, Anne Arundel County, Harford County, Howard County, and Carroll County Maryland.