Bo Lee - Berkshire Hathaway HomeServices Commonwealth Real Estate



Posted by Bo Lee on 3/4/2018

If youíre buying your first home, there are plenty of things that youíll need to know. Being informed will allow you to avoid some of the most common mistakes that first-time homebuyers make. These errors and their remedies can be found below. Don't join the crowd and make an error, know before you buy. 


They Donít Have Enough Funds


Every homebuyer plans for mortgage payments. Not every buyer plans for all of the other costs that go along with buying a home. Just because you can afford mortgage payments doesn't;t necessarily mean that you can afford the house. 


Thereís so much financially that goes into owning a home. Youíll need to plan for things like home maintenance, insurance, taxes, closing costs, and more. All of this will need to be saved ahead of time in order to buy and maintain a house. Things like property tax and insurance can go up yearly, and these costs can be very unexpected. 


Not Securing A Loan


If you donít secure a loan first and find the home of your dreams, you could be in for trouble. If you havenít been pre-approved for a mortgage, finding a home and putting an offer in is a bit riskier. Many buyers donít realize that they canít qualify for the amount of loan that they think they can. Getting pre-qualified allows buyers to understand just how much house they can afford. 


Avoiding Real Estate Agents


If buyers go it alone, they are taking a risk. The seller pays the real estate agent fees in a home transaction. You really have nothing to lose getting a professional to help you. From there, your agent can recommend all sorts of professionals to assist you in your home search including lawyers, mortgage companies, home inspectors, and others. Itís essential for a smooth home transaction to work with people who are experienced and know what theyíre doing.    



Depleting Your Savings


When you buy your first home, youíre going to need a reserve of cash beyond what you have saved for a downpayment. This cash includes an emergency fund, money for repairs, furniture, new appliances, and other unexpected expenses. If you use all of your savings on a downpayment, youíll be in a dangerous financial situation. Just make sure you have saved enough extra for a rainy day fund.


Opening New Accounts


Before your loan is closed, you should be frozen- financially frozen that is! Donít open any new accounts. It can be tempting to head out and buy a new car that will look good in your new driveway or to fill your house with all sorts of brand new furniture, but you should wait. Once you get the keys to your new home, youíre in the clear to spend again and open new accounts. You donít want to overextend your budget of course. Just be sensible!      





Categories: Buying a Home  


Posted by Bo Lee on 12/4/2016

Being a first time home buyer has it's benefits when it comes to financing. The Federal Housing Administration (FHA) has loans tailored specifically to you! Lower down payments and lower closing costs help newbies make the jump into home ownership. With a FHA first time home buyer loan you can get interest rates as low as 3.5%, which can really save money on the life of your loan and keep your monthly payments lower. Your down payment is also lower than a traditional mortgage; instead of putting 20% down, you can put as low as 3.5% down if you qualify. While a lower down payment will increase your monthly payment (since you are taking a loan out for more money), it will help with the burden of needing a large amount of money up front. With FHA loans you can also include most of the closing costs and fees into the loan, again helping with the money needed at the time of purchase. You can even add in the costs for repairing a home that needs a good deal of fixing up. Regardless, you will need to have enough money for the down payment, some closing costs, and inspection. Since you would be putting less than 20% down, FHA loans require that you also have private mortgage insurance (PMI), which is a percentage of your loan. This will be added to your monthly mortgage payment, and the bank will pay it out of your monthly. Being a first time home buyer probably means you need some help on getting through the process. The US Department of Housing and Urban Development (HUD) has housing counseling agencies that can give you advice on buying a home, avoiding foreclosure, and fixing your credit. You can find your local agency at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm. Lastly, you can also find local buying programs to help with buying a home, including helping with your down payment at http://www.hud.gov/buying/localbuying.cfm. If you never thought you would be able to afford a house, think again. With programs out there to help you buy your first home, you could be moving into a place before you know it!




Categories: Uncategorized