SELECT YOUR LANGUAGE

Track your daily spending habits.   If you don’t have a savings account, open one and save money for the down payment, as well as an emergency fund.  Make sure that when you are looking to purchase a home, you cut down on making any large purchases or new loan obligations.

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Most mortgage bankers will tell you that you can afford way more than you think you can actually afford when buying a home, use your own discretion.  Be realistic about how much you can really afford, taking into account your other expenses, like gas, electric, water, taxes, cell phone, cable (if applicable), student loans (if applicable), subscriptions, and membership fees, credit card payments, car loan (if applicable), child care (if applicable), groceries, gasoline for the car, car insurance, home owner’s insurance, and other loans and expenses applicable to you.

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The lender will check your credit report to see your repayment habits.  Make sure you pay your bills on time. You are more likely to get a loan with a lower interest rate when you pay your bills on time, have a high credit score, and low debt-to-income ratio.  Make sure that you request a fixed rate mortgage loan, that means the interest rate does not change for the length of the mortgage loan.  The lower the interest rate, the less you have to pay back over time.  The higher the interest rate, the more you have to pay back over time.

 

If you are unsure of how much you can afford for a home, calculate (add) all of your current expenses and subtract your monthly net pay (after taxes); the balance left over is an estimate of how much you can afford to pay towards a mortgage loan.  If you cannot afford to buy a house right now, continue to save and pay off your debt, so that you can afford to purchase a home later.

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There are several ways that can help make homeownership possible, just make sure you purchase a home that you can afford.  Pay attention to the amount of the property taxes, because even if you can afford the cost of purchasing the home, if the property taxes are too high, you might risk losing the home, because you cannot afford the taxes.   Some programs and services that can help you offset some of the cost of purchasing a home are:

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Seller assist, means that the seller will assist the buyer with the down payment cost.   What some people might not know is that in some States you can still be considered a first time home buyer, if you have not purchased a home within the last three years from the time of your last home purchase.

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First-time home buying programs to help with down payment cost.  There are two organizations that can assist with down payment cost:

-CDC (Community Development Corp.) - find your local CDC in your area to find out about their first time home buying program.
 

-NACA (Neighborhood Assistance Corporation of America) - home buying program.  For details visit www.naca.com.

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Contact a local realtor who can take you to tour different homes that are for sale in your price range.  When searching for a home, make sure that you research the neighborhood to find out the crime and economic statistics in the area.  Make sure you also drive through the block during the day time as well as at night to see what’s going on in the neighborhood.  Drive around the neighborhood in at least a three to four block radius (from all sides of the home that you are thinking about buying) to see what types of stores are in the area, as well as the condition of the homes in the area. 

 

Don’t settle on the first house that you see, even if you like it.  Look at multiple homes and then pick the one you like the most that fits within your price range, and neighborhood that you want to move into.  It is also important that you conduct a property search on the State website where the property resides to find out the last purchase price of the home, which could help you with negotiating a lower price depending upon how much the home was previously sold for and if any repairs were made currently.  You also want to check the real estate tax history to see how much the property taxes have increased over the years and determine if property taxes are owed on the property, before you purchase the property.  If taxes are owed on the property when you purchase the property, you will be responsible for paying the owed property taxes.  It is better to request that the seller pay off the property taxes first or reduce the cost of the home by subtracting the full amount of the property taxes owed.  I think having the seller pay the property taxes first is the better option.  However, if he/she is not willing to pay, make sure you negotiate for a lesser cost for the home.

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When you settle on a home that you love, get the home inspected by a licensed professional home appraiser and inspector, before you purchase it, so that you know the accurate condition of the home before you buy it.  The accurate condition of the home is not always listed on the realtor website.   Talk with your friends who already purchased a home and ask them about their realtor to find out if he/she could work with you as well.

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By Jason Torrents