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The Homebuyers' Guide Valuable and reliable information for you to use as a reference throughout the process of purchasing your home
Y
ou may be a first-time home buyer who is completely unfamiliar with the process. You previously may have purchased several properties and are starting to look for another one. One: Deciding what is best Taking the first step towards buying a home is both exhilarating and
your search in a focused direction. What type of housing? When determining what you can afford, consider the type of home and neighborhood that will best fits your needs. Start considering the differences between a single-family home, a condo and the other housing options that exist. Who do you need on your team?
overwhelming. Before diving in, it is
Buying a home can be a strenuous
important to consider several fac-
process. Surround yourself with a
tors. Buying a home is a huge finan-
team of professionals who can assist
cial investments, so you want to be
with the home buying process.
well prepared. What's the best scenario for you? Renting or owning? While it may
Two: Laying the foundation Being Prepared How prepared are
and how monthly mortgage payments will be structured. Before moving forward, you'll want to consider those items that make up your monthly payment and the factors that influence them. Typically referenced as PITI, a monthly mortgage payment is comprised of Principal, Interest, Taxes and Insurance: • The initial amount borrowed to purchase the home and the remaining outstanding balance throughout the life of the loan is the PRINCIPAL. • The charge for borrowing money is the INTEREST. • Collected in an escrow account, TAXES are assessed by local govern-
seem that owning a home is the best
you currently to buy a home? Per-
choice, that might not necessarily be
haps you have been making steps
the case for everyone. Consider all
towards this goal for a while or
the factors, good and bad, that come
maybe you just started. How you
with owning a home. Compare rent-
have equipped yourself for this ven-
ing versus owning, then decide the
ture will be a major determining
best scenario for your situation.
factor on choosing a loan program.
your taxes, INSURANCE is collected
Do you have an amount for a down
by the lender and put into an escrow
payment? What is your income-to-
account. Your insurance is composed
debt ratio? How is your credit status?
of two prominent types of coverage.
There are a number of ways you can
Homeowner's insurance provides
be prepared for this process.
you coverage for damages inflicted
How much house can you afford? If owning a home is the decision, you will want to think about exactly how much home you want. How much space will you need? How much space can you afford? Knowing these two things will help drive
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Your Monthly Payment Decide which loan program fits your needs
ment and are typically paid to the lender as a portion of the payment. The lender will then pay them to the government upon their due date. • Established in a similar fashion as
by hazards such as (but not limited to) wind and fire. Mortgage insurance typically is required for those