First-Time Home Buyer's Guide
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Go to step 3
STEP 2 - Defining your price range and preferences
Where to begin
Before you start driving around looking for yard signs, do some homework
to fine-tune your dreams and expectations.
Know how much house you can afford
Review your budget and determine how much you want to pay each month. Lenders
will consider the home's sale price and your down payment in determining
how much to loan you, but your monthly payment is of primary importance.
In addition, housing costs are usually more than just mortgage principal
and interest, because they often include property taxes and insurance.
As a general rule, your monthly housing cost should not exceed 28 percent
of your gross monthly income. If you have outstanding long-term debt (things
like car loans, student loans or credit card balances), that monthly debt
plus your monthly housing costs shouldn't exceed 36 percent of your monthly
gross income.
Ask me for a Lender Information Worksheet. This worksheet
allows you to organize all those details needed for the financing application
process. It will also help you itemize your living expenses and income,
so you may analyze your budget more thoroughly.
Decide what type of house you want
With the Home Buying System, we'll help you define your needs, tastes and
preferences. Narrow down the search by identifying the home styles you like
best -- two-story, ranch, contemporary, townhouse or another look.
Decide what features you must have in a home and those you'd like to have.
Do you want a two-car garage, family room or fireplace?
HOME BUYING TIP
Ask me for a copy of the
"Home Buyer's Checkbook." Use this home-features checklist to
help you define your needs and wants.
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Consider your lifestyle realistically. If you don't like yard work,
you might want a condo or a home with little landscaping. Hobbyists may
need a work room or extra garage space.
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Think about the neighborhood in which you'd like to live. The neighborhood
often contributes to the value of a home. Pick out neighborhoods that appeal
to you, and talk to people who live there.
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Call your city government or ask your sales associate for information
about property taxes, including any pending increases or special assessments.
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Look for evidence of good zoning practices. Businesses or industries
should not be mixed in with residences. Other regulations, such as on-street
parking, may also be in force.
HOME BUYING TIP
Factor in the costs of commuting as you're looking at neighborhoods. If
your daily commute to work, school, shopping or other locations will be
very long, you may have greater automobile expenses, such as gas, maintenance
and insurance.
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