How Much Home Can You Afford?

 

An experienced homeowner knows the price of the house is not the only cost to consider when buying a new home.  Here we present other additional costs that will help any future buyer to assess how much house he/she can afford:

 

• Utility Payments ­
  A homebuyer can always ask a seller to show him some recent utility bills.  Although every family uses utilities in its own way, the recent bill always gives a homebuyer an idea about his/her future payments.

 

• Up-front Costs Appraisal Fee ­
  If requested by your mortgage company you will need to have an appraisal done on the property you plan to buy. Cost: Approximately $300

 

• Deposit
  If you offer to purchase a property you may need to put down a deposit.  Cost: around 5% of the purchase price

 

• Down Payment ­
  Conventional mortgages vary, but most usually require 10-20% of the purchase price.

 

• Home Inspection ­
  The price of the house inspection depends on the size of the house.  Cost: usually between $300 and $500.

 

•  Legal Fees and Disbursements ­
  This fee is usually paid at closing. Cost: Approximately $500

 

• Property Insurance
  It is paid to cover the costs of replacing the structure. It protects the homeowner and the mortgage lender, since the property is security for the mortgage.

 

• Property Survey ­
  May be required by the mortgage lender. Cost: Approximately $300

 

Other costs are: gardening equipment, decorating materials, moving expenses, hookup fees, window treatments.

 

Before deciding how much house you can afford consider all the costs above to avoid ending up “house poor” and enjoy living in your new home.

 

 

Builders' Confidence Falls in March

 

Home builders' confidence took a hit in March, according to a members' survey by their trade group conducted amid growing reports of problems in the subprime mortgage market.

 

The National Association of Home Builders' survey showed that the group's confidence index fell to 36 in March from a 39 reading in February. The February reading was also revised lower.

 

It was the first decline in the index since it fell to a 15-year low of 30 in September.

 

"Builders are uncertain about the consequences of tightening mortgage lending standards for their home sales down the line, and some are already seeing effects of the subprime shakeout on current sales activity," said a statement from David Seiders, chief economist for the trade group.

 

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The Importance of Home's Exterior

 

When considering a home purchase, most every homebuyer pays most of his/her attention to the interior of the house. There is no doubt that the overall look of the inside of the new house is important, but a homebuyer should also investigate the exterior of his new home.

 

View

 

A homebuyer should remember that views may be beautiful but also seductive and very influential.  Before a buyer decides about buying the house, she/he should check whether the beautiful view today could become a view of the neighbor's bathroom in few years.  A buyer should find out about the local legal restrictions concerning new constructions in the area, the height to which homes can be built, and whether the existing houses are allowed to add second or third floors.

 

Landscape

 

Before buying a property a homebuyer should consider whether he/she will be able to change the landscape to suit his/her needs.  Many areas have strict regulations concerning the installation of such exterior improvements as hot tubs or decks.  In some cases it may not be allowed for a homebuyer to introduce any exterior changes at all.

 

Open land or an empty lot

 

Many homebuyers find houses that are next to open land especially attractive, imagining themselves walking a dog there or playing with their child.  However, one should bear in mind that open land may be intended for residential or commercial use.  Before buying a house, a homebuyer should investigate what the plans are for this area. If the property next to you is approved for commercial use, that may mean more traffic and more pollution to your living area.

 

Do you find the exterior of your house important?  Share your experience with us.

 

 

Home Price Slump Helps to Spur Sales

 

Sales of existing homes posted the biggest jump in nearly three years in February, though sellers got the gains the way Detroit automakers spur sales - by cutting prices.

 

The National Association of Realtors said recently that home sales rose 3.9 percent last month to an annual rate of 6.7 million from a revised 6.4 million pace in January. It was the biggest percentage increase since March 2004.

 

Economists surveyed by Briefing.com had looked for a slowdown to a 6.3 million pace.  But even though sales rose from January, the pace was still down 3.6 percent from February 2006.

 

The report also showed the median price of a home sold in February fell 1.3 percent to $212,800 from a year earlier.  That was the seventh straight month that prices fell from a year earlier.  While home prices can swing widely from month to month, a drop in prices from a year earlier is relatively rare - and is sign of how weak the housing market has become.

There were 3.7 million homes for sale last month, up nearly 6 percent from the 3.5 million in January, and up by a quarter from a year earlier.  Many home buyers have an opportunity now that was only a dream a few years ago when the markets were all white hot.

 

Are you a potential home buyer wondering if now is the time to make your move?  Contact us, or leave us a comment below.

 

 

More Tips for First Time Homebuyers

 

Outside of classes, how do you figure out the main things you need to know for the buying process?  Here are some suggestions:

 

• Consider numbers experts give you on affordability as a ceiling, not a floor. Real-estate people often say the sum of your monthly mortgage payment, homeowner's insurance and property taxes shouldn't be more than 28% of your monthly gross income.  Meanwhile, your monthly debts, including your mortgage payment, shouldn't be more than 36% of your monthly gross income, they say.  But think of your circumstances.  Do you want to spend a lot of money at this stage of life on traveling?  Do you want to put money away so you can stay at home after a child is born?  Count your own values, dreams and limitations in your calculation.

 

• Try to put down at least 20% of a home's cost. Otherwise, you may have to buy "private mortgage insurance." If you don't have that much cash, consider a "piggy-back loan," which basically involves multiple mortgages for different percentages of the home's price.

 

• Borrow what you need to borrow, not what you can borrow.  Lenders will often offer you the maximum you can borrow but don't feel it's necessary to go maximizing your borrowing capacity.  If someone hands you a credit card, that doesn't mean you have to go max it out.

 

• Hire a lawyer, especially your first time out.  When you find a place you like, a lawyer can help you spot objectionable phrases and clauses that find their way into contracts.  If you don't have a lawyer who is familiar with all the details, all the legalese in the document and jargon, you're not going to understand it.

 

Talk to us about your buying options, and what might be best for you.  When buying real estate, one size does not fit all.  Everyone's circumstances are different, so there is no steadfast rule that covers every situation.  We'd love to assist you in answering any questions you may have.