Thinking about purchasing a home of your own? Charlotte real estate is more affordable than ever. With interest rates at an all time low, an abundant inventory, buyers have never had it so good! Do you think you missed the boat on the $8,000 tax credit? I work with several lenders who have access to down payment assistance funds and grants that are income based. Call me today to learn more about these downpayment programs and various financing options for first time home buyers. If you are apprehensive about the home buying process, send me your contact information and I will provide you with your very own Charlotte first time home buyers kit that walks you through the home buying process step by step and takes the mystery out of it. Below are some things to consider when buying your first home.
How long you plan to live in the home.
If you purchase a home and get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.
The length of time that it will take to cover those costs depends on various economic factors in the area of the home. Most parts of the country have an average of 5% appreciation per year. In this case, you should plan to stay in your home at least 3-4 years to cover buying and selling costs. If the area you buy your home in experiences an economic up turn, the length of the time to cover these costs could be shortened, and the opposite is also true.
How long the home will meet your needs.
What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you'll need to ensure that the home has the amenities that you'll need. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you'll need will help you find a home that will satisfy you for years to come.
Your financial health - your credit and home affordability.
Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Is your credit good? If you have more than a couple of blemishes on your report, you may need to begin working on repairing your credit with the help of a lender who can make recommendations on the steps to take to improve your credit.
Some say that you should refrain from borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries. The other school of thought says you should stretch to buy as much home as you can afford, because with regular pay raises and increased earning potential, the big payment today will seem like less of a payment tomorrow. This is a decision only you can make. Are you in a position where you expect to make more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Make sure that whatever you do, it's within your comfort zone.
To determine how much home you can afford, talk to a lender or go online and use a "home affordability" calculator. Good calculators will give you a range of what you may qualify for. Then call a lender,they can explain your options and what programs may work for you. The "28/36" rule means that your monthly housing costs can't exceed 28 percent of your income and your total debt load can't exceed 36 percent of your total monthly income. This ratio is more important than ever with newer stricter lending rules. Depending on your assets, credit history, job potential and other factors will determine if you can get a mortgage. I have many lender partners available to work with you on determining your financing needs.
Where the money for the transaction will come from.
Typically homebuyers will need some money for a down payment and closing costs. A good lender can advise you on how much you will need based on different mortgage programs available. Sources for these funds can come in the form of a gift from a family member, savings, or the sale of a previous home or asset. There are many options you can pursue to acquire down payment and closing cost funds.
The ongoing costs of home ownership.
Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium, townhouse or in certain communities, a monthly homeowner's association fee might be required. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your realtor and your lender aware of your desire to limit these costs.
If you are still unsure if you should buy a home after making these considerations, you may want to consult with an accountant or financial planner to help you assess how a home purchase fits into your overall financial goals.