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BUYERS GUIDE
Purchase Your First Home with Confidence
by Neda Dabestani-Ryba
Prudential Carruthers REALTORS
If you are making the transition from renter to homeowner,
you're not alone. In 2004, 40 percent of homebuyers
were purchasing for the first time, according to "The
2004 National Association of REALTORS® Profile of
Home Buyers and Sellers."
With interest rates at all-time lows and a booming real
estate market, now's a good time to purchase real estate.
However with the prospect of making one of the largest
investments you'll ever make in your life, you can easily
become overwhelmed. Some of the questions you may be asking
are: Will I be able to afford the home of my dreams? Do
I have enough money for a down payment? Will I make smart
home buying decisions? If you go into the process prepared,
your first purchase can be a good experience.
Resources--Before starting out, educate yourself on the
process. Check your library or local newspaper to find
a homebuyer seminar that you can attend. The U.S. Department
of Housing and Urban Development has an entire section
on its website (www.hud.gov) devoted to homebuyers. It
has a list of common questions of first-time homebuyers,
information on mortgage and home-buying programs, access
to housing counselors, downloadable tools such as a wish
list and home-shopping checklist, tips on selecting a
real estate professional, etc. Other informative sites
to check out are www.ginniemae.gov, www.realtor.com and
prudential.com.
Your real estate professional is also a great resource.
Don't hesitate to let him or her know that you are new
to the process. They will expect you to have questions
at each step-from house hunting, to making an offer to
the closing.
The costs involved in the purchase of a home can be
overwhelming to first-time homebuyers. There are mortgage
costs, the down payment, and closing costs to think
about.
Affordability--By looking at your income and debt ratio,
your sales professional can help you calculate how much
you can afford each month in mortgage payments. But
before determining your price range, you should also
take into consideration other factors that will affect
your monthly budget once you are a homeowner, such as
property taxes, insurance, utilities, and maintenance.
And if your down payment is less than 20 percent of
the cost of the home, you will be responsible for private
mortgage insurance, more commonly referred to as PMI.
Mortgage payment--Fear of being rejected for a home loan
is one of the main concerns for first-time homebuyers.
To lessen the stress, you may want to get pre-approved
for a loan before looking at prospective homes. This will
not only help you feel more confident, it will also give
you an advantage where there are multiple offers for a
specific property. In addition, the fact that your loan
has already been approved is of great value to the seller
because it shortens the purchase process, and there is
less of a chance that the buyer will back out of the sale.
If you don’t have a specific mortgage lender in mind,
ask your sales professional for a recommendation.
Down payment--The down payment amount varies depending
on the value of the home you choose and your mortgage
lender. And in some cases, first-time homebuyers can
purchase a home with no money down. Although it varies
from state to state, most offer government-funded programs
for first-time buyers that help people buy a home with
no down payment. Your real estate professional will
be able to explain the different options available to
you.
Making offers--Don't feel pressured into making an offer
on the first home you see. This is a common mistake
of many first-time homebuyers. Make sure you view different
homes to get a feel for the marketplace. When you decide
on a home to make a bid on, work with your real estate
professional to get all of your questions answered before
making an offer. But don't wait too long to make an
offer. The longer you wait, the greater the chance other
prospective buyers may place offers, making it harder
for you to negotiate a good deal.
Above all, remember there are no silly questions. Make
sure you understand and are comfortable with every aspect
of the transaction. Your real estate professional can
be an invaluable asset in helping you make educated
decisions so that your first home purchase is a rewarding
experience.
About the Author
Neda Dabestani-Ryba is a licensed Realtor in Maryland.
She is a member of the President's Circle of Top Real
Estate Professionals. She can be reached at (800) 536-3806
or visit her website for more information: http://neda.dabestani.pcragent.com/
Prudential Carruthers REALTORS is an independently owned
and operated member of Prudential Real Estate Affiliates,
Inc., a Prudential Financial company. Equal Housing Opportunity. |
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