Tired Of Renting

Are you tired of paying your rent? It seems like it is a process that never ends and you have nothing to show for it. Housing is the largest expense we have every month. It is time for you to begin the process of buying your first house. tips for buying your first home

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Calculate Housing Cost On Income

But, you ask, where do I begin buying my first house? Your monthly housing allowance keyed to your disposable income is the first step. Housing cost should not exceed 30% of your annual disposable (after taxes and deductions) income. Assume your disposable income is $75,000 per year. Multiplying $75,000 times 30% (.3) yields $22,500 divided by 12 equals $1,875.00 per month maximum housing cost. If your household has two incomes, I suggest you only use one income to calculate your monthly housing allowance. If one income ceases, you will not have as much difficulty budgeting your basic housing. As an additional note, your housing allowance will need to cover the expense of your mortgage payment, property taxes, home insurance and repairs.

Down Payment and Preapproval

The second step, towards buying your first house, should be as to whether you can come up with a down payment. This will be ultimately important when seeking financing for the remainder of the sales price of any home. Now that you have completed the above steps, you are ready to apply for a preapproval with a lending institution.

Any lender can do this for you. They will calculate how much house you can afford, your monthly mortgage payment and how much they are willing to lend to you. If asked by the lender, what term you would prefer for your mortgage, always choose the longest term offered (30 years, 40 years). You can always make extra principal payments which is especially prudent at the beginning of the mortgage loan…it decreases your interest payments on the loan immediately.

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Begin Looking

Armed with good information about how much house you can afford, it is time to start looking for “the” house. Primarily, you will need to consider your family size in relation to the number of bedrooms in a home. Another consideration will be family growth. Do not hurry through this task, take your time. A realtor usually has information sheets for each home they have listed. One piece, of information you can derive from the info sheet, is the property taxes on a property. You can immediately eliminate homes without adequate bedrooms. You may have to concede to some of the amenities you desire to get into the price range of a home you can afford. This is normal when purchasing existing housing.

Close To Offer

The looking is a fun, but knowledgeable experience. When you have eliminated your search to two or three homes, it is time to take a second look at your selections. Manned with a camera and a good guide to assist you to look at the deeper contents of the home not revealed by the realtor or owner, ask questions and take notes as you complete the second tour of each home. For example: Have you ever had water in the basement? Now, you are ready to write offers.

Have Legal Representation

Offers, once placed, can be negotiated. Realtors always represent the seller. For your own leverage, I suggest you hire legal representation. This will cost you something, but is well worth it. Once, your offer is accepted, you will need to select a closing date and apply to a lender for a mortgage loan