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Things First Time Buyers Need To Know
Dated: October 29 2017
Buying your first home is exciting. Getting to that point is challenging.
1. It may cost more than you expect. Principal, interest, taxes and insurance. If condo, HOA cost. Also the cost of landscaping, gardener, pool, maintenance, home warranty etc. Experts say you should put away 1% of your home price per year for repairs and maintenance.
2. You may only have to put down 3 ½%. FHA is not the only game in town. There are some other options for low down payments which gives you more reserves for emergencies.
3. Affordability. Rents have been going up especially in L.A. County. In 66% of the cases studied, it’s cheaper to buy than to rent.
4. Once you get pre-approved, you will know how much you can afford. It’s best to stay in your comfort zone and not over encumber yourself.
5. It may be easier to buy a single family home than a condo. Many condos are not FHA approved and some condos are over encumbered with debt or law suits making it impossible to get any kind of loan for.
6. You may be able to get money to fix up your home. There are loans like the 203K Home Style Loan from Fannie Mae and FHA administration which allows buyers to borrow based on what the house is expected to be worth after the home rehab is complete.
7. You may be able to get a gift for your down payment. Cash gifts are allowed on many low down payment mortgages including the FHA purchase mortgage and conventional type loans. Gift funds are also allowed on closing costs.
8. Determine if an HOA relationship is for you. There is a love hate relationship with HOA’s. There are rules to follow which keeps the neighborhood consistent rather than one home in the area looking like it was let go.
9. Check out the neighborhood thoroughly. Make sure about any future developments, talk to neighbors. Check for sexual predators, go by at different times to see if there are any loud neighbors with revving motor cycles or musicians.
10. Check out the school systems. This can also increase your future home value.
11. While in escrow, don’t check your credit, don’t get any new credit cards, don’t buy a new car and don’t go delinquent on any bills. This could change your credit score and make you not qualify for your loan.