So, I know I've been on this "smart money" tip when it comes to homeownership. But there are certain things you should do before taking that wonderful step into "smart money!" Follow these 7 steps to make sure you are READY for that DREAM HOUSE...
1-Check the selling prices of comparable homes in your area. There are certain websites that you can check these including the National Association of Realtors website.
2- See what YOU can AFFORD. I have a network of experienced loan officers that you see what's your buying power. Also, keep in mind that just because you sit down with a loan officer and you find out what you can afford by NO MEANS does it bound you to a loan. This is merely done to focus your search when looking for your home. I mean really if you can only afford a $200,000 home there's no reason you should be looking at $300,000 homes! Unless you have an $100 G's just lying around that is!!!
3-Find out what your total monthly housing cost would be, including taxes and homeowners insurance. To get a feel for the maximum amount you should spend, including taxes and insurance, use MSN Real Estate's home affordability calculator. In some areas, what you'll pay for your taxes and insurance escrow can almost double your mortgage payment. To get an idea of what you'll pay in insurance, pick a property in the area where you want to live and make a call to a local insurance agent for an estimate. You won't be obligated to get the insurance, but you'll have a good idea of what you'll pay if you buy.
4-Find out how much you'll likely pay in closing costs. The upfront cost of settling on your home shouldn't be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowners insurance or homeowners association fees.
5-Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house poor. And this often causes you to be "upside down" on your loan...(remeber the short sale lesson earier in the week)
6-Talk to reputable real-estate agents in your area about the real-estate climate. Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon? Trust in your agent, we are here to RELIEVE the stress for you. You DO NOT have to go through the BIGGEST& MOST IMPORTANT purchase of you life alone!
7-Remember to look at the big picture. While buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there's no landlord to turn to, and these costs can drain your bank account.
