Finding and buying the right home begins with identifying your financing needs. The first step in this highly personalized process is determining how much house you can afford to buy. Unless you are in a position to pay all cash for your home, you will need to obtain a home loan (mortgage) to finance your purchase. Once you have been pre-approved by your chosen Loan Officer, you will have the buying power you need in today’s competitive housing market.
Various financing options may be available to you including a fixed rate mortgage, adjustable rate mortgage (ARM), Government-assisted (FHA or VA) financing or seller-assisted financing.
Even though there are many ways to qualify to buy a home, be sure the monthly payment makes sense for you. The payment you qualify for will depend upon a variety of factors. These factors include credit history, size of down payment, and length of employment. Everyone’s circumstances are different. You can expect the loan officer to ask for standard information regarding your income, expenses and obligations.
A Monthly Mortgage Payment Can Contain Several Components:
- The original balance of money loaned. As long as the loan is paid over time, the principal is the remaining loan balance
- The charge for the use (loan) of money. The interest rate remains constant in a Fixed Rate Mortgage. The rate can vary according to specified guidelines over the life of an Adjustable Rate Mortgage (ARM).
- Assessed by the county and/ or city in which you live and are based on the value of your home. Two installments are due each year.
- Protects you against loss resulting from certain hazards, such as theft or fire. Policy coverage’s differ. You will need to consult your insurance company to be sure lender requirements and your needs are met.
Private Mortgage Insurance (PMI)
- Usually a requirement when there is less than a 20% down payment on a loan. Loans with smaller down payments involve a greater risk for the lender. Consequently, the lender requires protection in case the loan goes into foreclosure. Without PMI, lenders would be reluctant to offer loans with lower down payments.
Defining Your Ideal Home
Once you’ve identified what you like in your present community, you will have a better idea of what you are looking for in your new home. Your Berkshire Hathaway Homeservices PenFed Realty Chambers Theory Team Realtor will assist you in selecting homes to view based on the needs you have discussed. The following questions are important to think about when defining your ideal home
How do you commute to work?
Do you walk? Drive? Carpool? Taxi? Bus? Metro?
Where do you do your shopping?
Online? Central commercial districts? shopping malls? community shopping centers?
Do you have special educational needs?
Grade school to graduate school, and from day care needs to specialized training, what will you require in the next few years? Are there any special needs or plans?
What are your recreational needs?
Music? Movies or live stage? sports arenas? Museums? nightlife? Are there public parks, country clubs, athletic clubs?
What type of community appeals to you?
Condominiums, multi-family structures, single-family houses, 55+ Retirement Communities? Are there any community amenities that are important such as swimming pool, club house, golf course?
What style of home are you looking for?
Cape cod, contemporary, colonial, hi-rise/low-rise condominium, rancher, townhouse, split level, split foyer? Is a large or small yard important to you? How much maintenance do you want to be responsible for?
How many bedrooms and bathrooms do you require?
Will your needs increase or decrease in the future?
What features did you value most about your previous residence?
This may include style, floor plan, yard, neighborhood, view, etc.
What did you dislike about your previous home?
What would you like to avoid?
What are the most important “must have” features of your ideal home and neighborhood?
Why are they important?
What is your time frame?
Is there a definite time when you must be settled in your new home?
Thinking about all these questions will help us, help you. Sometimes buyers may narrow themselves too much so keep an open mind and when we suggest something that may seem out of your comfort zone, give it a shot and give honest feedback! You never know, you may find something you never thought you’d love!