Getting Started…. The Basics

Part 1 –  Should I Buy A Home?

– What are the basic considerations when buying a home?

Making the transition from renter to home owner can be difficult for some. Owning a home does mean that you will be tied into that community, and that it won’t be so easy to pick up and leave. It is a lot like dating and getting married….renting is like dating, and buying a home is a lot like marriage. Besides the obvious answers of work, you need to ask yourself if you want a home, and if you are ready to take that next step into buying a home.

– What are the positives and negatives to home ownership?

Pros- paying your own mortgage, getting the tax advantages (a home owner is able to claim mortgage insurance, property taxes, and mortgage interest on their yearly taxes), being able to paint the walls whatever colors you want, becoming part of the community, putting down roots, and of course, the ability to have pets
Cons- if something breaks down you will be fixing it, you pay for all utilities, if you dislike your neighbors it is harder to move

– Why should I buy, instead of rent?

Without sounding like a broken record, there really never has been a better time to buy a home. Interest rates are fluctuating between 3.5% and 4%, and home prices are also low, but are rising.

– How do I know if I’m ready to buy a home?

This is a tough one to help with as only you can answer it. Are you resentful when writing that rent check? Do you drive around looking at homes? Do you imagine the color palette of your future home? Do you have a job? Are you ready for the responsibility of home ownership? …taking care of the home? …taking care of a yard?

Part 2 –  Finding My Home

How can I determine my housing needs before I start searching?

How do you live? What do you like about your current residence? What don’t you like? Do you have a school district you need to be? …a certain location? How many bedrooms, bathrooms do you want/need? Yard size? Garage? Again…how do you live?

– How do I begin the home buying process?

The first step in every home buying adventure should always be home buyer education classes. The next step is speaking with a lender (like Chris Berg with Pinnacle Home Mortgage 503-320-0925) to see how much home you can buy. A lender actually pre-approves you for a monthly payment…not a dollar amount.

– Should I work with a real estate professional?

Absolutely! Hiring a buyers agent is like hiring a lawyer when going into a legal situation. We are licensed to help people with the legal contracts and ins/outs of the home buying process. A buyers agent is at no cost to the buyer….

– How do I choose which real estate professional to work with?

Talk to friends and family…interview…ask questions. What questions should you ask? See the homebuyers blog regarding for a whole section on those. 🙂

– Should I sign an exclusivity contract with a real estate broker?

This is a personal decision…I personally do not have my clients sign an exclusive contract as I believe that customer/client loyalty is built on excellent customer/client service, and not a piece of paper. Again…I have a blog dedicated to this one as it is a big thing in real estate right now.

Part 3 –   Paying For My Home

– How much of a mortgage can I get?
This is definitely a question for an experienced mortgage lender, and would require more of your time than I have here. Mortgage, in a nutshell, is determined on debt to income ratio….or how much money you have left after your debts are paid. A home buyer should always have a budget though to include those things that a lender may not so that one doesn’t over buy.

– Do I have to make a down payment? If so, how much?
It really depends on the home loan. If you are considering a conventional loan then at least 5% downpayment is needed. A FHA (the most commonly used loan) requires a 3.5% down payment…..and then there are the government programs like USDA which requires no downpayment, the HouseKey downpayment assistance loan which is a second loan you can get to help with the down payment., or the NHF grant, which has 2 options to help a buyer with down payment (a grant is money you don’t have to pay back).

– If I have bad credit can I still get financing?
Most loan programs require at least a 620 credit score. Not there yet? A lender can help you…. a good lender, like Chris Berg, will go over your financials, and credit score with you and give you steps and a plan to get to where you need, or want, to be. For example, I am currently looking for homes with a client who last summer had a 450 credit score….this summer she has a 680 credit score by following the steps that Chris provided.

– Do I have to pay any commission when I purchase my home?
When you hire a buyers agent to help you purchase a home you do not have to pay a commission! A buyers agents cost is free to the buyer… If an agent asks you to pay for their commission, or a part of it, you need to ask why? In the class we do go into detail on how agents get paid, and who works for whom.