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Some Guidelines For Buying a Home
02/15/2008 - By Charles Di Bartolo
Some guidelines for buying a new home
The thought of buying a home can always seem a little daunting, whether it’s your first time or if you’re a seasoned veteran. There’s always a lot to consider.Some guidelines for buying a new home
The thought of buying a home can always seem a little daunting, whether it’s your first time or if you’re a seasoned veteran. There’s always a lot to consider. Renting is a pretty comfortable proposition. You’re not risking much. Why go out on a limb and risk your credit, comfort level, financial freedom and piece of mind?
Decide what type of a home you would like and why. Is there a certain type of home you would like? (Colonial, Ranch, Townhouse, etc.) How many bedrooms, baths, other rooms? Are there any special amenities that you must have? (like a large yard, finished basement, two car garage, etc.) What neighborhoods would you consider? Do you need to be close to certain schools, jobs or transportation?
Start working on your credit early. Make sure your making payments on time. Try not to have too much credit or large balances at their maximums. Late payments, maximum balances and too much credit can and usually will affect your score negatively. Planning a good credit strategy early is key to getting a lower mortgage rate when you are ready to buy a home. Don’t wait until the last minute. Consult with a mortgage professional before you start planning to buy a home.
How much can you save as a down payment on your new home? This may affect what type of home you can buy. You will usually need 20% as a down payment. There are times when you may be able to purchase homes with much less but a down payment of 25% may save you additional insurance premiums on your mortgage. Speak with a qualified mortgage broker to determine your needs and what will work best for you. Get to know your mortgage broker and make sure he understands your financial needs and risk tolerance. A good mortgage broker should be aware of what mortgage products are available and at what rates. If they understand your needs they will be able to help you find the right mortgage product for you. Make sure you are comfortable with any interest rate risk you may be taking. Read through all the details.
Do you have a good existing relationship with your local bank? See their mortgage specialist. They may have some interesting rates and services for existing customers. Sometimes your bank will offer special rates for good customers.
Decide how much you are willing to spend. Try to plan a budget for your mortgage payments, home improvements and necessary maintenance on the home you are planning to buy. It’s always a good idea to keep some emergency money for unforeseen improvements that may be needed.
Get a good real estate agent that knows the areas that you are interested in. Finding the right professional real estate agent for you is one of the most important step in shopping for a home. You should have confidence that this person can negotiate for you. Having a third party negotiator can move the process about more quickly and efficiently. There are less personal issues involved in the negotiation. A knowledgeable professional can quote facts and figures, recent purchases in the area that the owner may not be aware of. Stick to the facts, not your emotional feelings of what a house is worth.
Price out at least 20 homes in your area that fit your criteria. Drive by the homes and take notes. Write down your likes and dislikes. Keep copious notes because after the first 5 or 10 you will forget the details. Think about what amenities ad or subtract value from the home. Discuss your findings with a real estate professional to see what how those variations affect the pricing of the home. Be honest with your realtor on your feelings about each home. Not saying how you truly feel wastes everyone’s time including your own. Once you start to get a feel for what homes should go for and you’ve seen a few that you like it’s time to start comparing. Give each home a rating from 1-10 on how it can fulfill your needs, what each home has to offer, likes and dislikes. Pick out the ones you like and go over the details with your realtor.
Your real estate agent can help you make an offer to buy the home that you want. It is
Important to know up front who your agent represents. Your agent should provide you with a disclosure agreement which clearly states whether they are working for the buyer or the seller. Some agents work only for the seller. In this case the agent may not be able to advise you what a fair offer to make is. If you are uncomfortable with that in New York you can find a buyer’s agent.
After looking at 20 homes, what they are selling for in the area and how long they are taking to sell, you should be able to get a good idea of what your best value may be.
Remember that what you save on the initial price is instant savings and savings on your mortgage payment for the next 20 or 30 years. Your initial price will affect your down payment and future payments. Your mortgage rate is also important. Is your rate fixed or adjustable. If it’s adjustable make sure you can afford the increase that a change in interest rates might produce. If it sounds too good to be true it probably is. Check the details.
Insurance should also be shopped. Get a few quotes and make sure you are comparing apples to apples. You need to be looking at the same type of coverage on each policy. Make sure you are speaking with a qualified insurance professional.
When you do finally narrow down the home your choices to the home you think is right for you, have it inspected. Get it inspected by a licensed home inspector or engineer. Be there for the inspection. Make sure it’s someone your comfortable with that has lot’s of experience and knowledge. If you don’t understand the wealth of information you get ask questions and be sure you understand the ramifications of any issue with the home.
Owning your own home is one of the most rewarding and comforting investments a person can make when done correctly. Make sure you work with qualified licensed professionals every step of the way. Ask the tough questions and analyze your decisions and you will be rewarded with the home of your dreams. Happy House Hunting!
Charles J. Di Bartolo
RealtorAssociate
Salmon Real Estate
1855 Victory Blvd
Staten Island NY 10314
718-873-5614
