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Frequently Asked Questions

HOW DO I KNOW IF I’M READY TO BUY A HOME?

You can find out by asking yourself a few important questions:
~Do I have a steady source of income?
~Is my current income reliable and expected to continue?
~Have I been employed on a regular basis for the last 2-3 years?
~Do I have a good record of paying my bills?
~Do I have money saved for a down payment?
~Can I comfortably afford a mortgage payment, plus additional costs?
If your answers are all “yes”, you’re probably ready to buy your own home.


HOW DO LENDERS DECIDE IF I QUALIFY AND HOW MUCH I CAN AFFORD?

Lenders consider many factors when qualifying a borrower. One important factor when considering affordability is your debt-to-income ratio or “DTI” for short. DTI is a comparison of your gross (pre-tax) income and your housing costs (mortgage, taxes, and insurance) plus non-housing expenses. Non-housing expenses include debts that show on your credit, such as auto loans, student loans, credit cards, alimony and child support.  Typically, if these monthly payments total to less than half of your monthly income then you will qualify. The lender may also consider funds that you have available for your down payment, closing costs, as well as future payments. Credit history is often the most important factor of all. Enough cannot be said about making payments on time and being able to show a strong history of credit accounts. Borrowers with a good credit score, often referred to as “FICO” score, have more options and better interest rates available to them.


WHAT SHOULD I LOOK FOR WHEN SEARCHING FOR A NEW HOME?

Consider making a list of must-haves.
To help, think about these basic questions:
~Are there enough bedrooms and bathrooms?
~Is the home structurally sound?
~Do the mechanical systems and appliances work?
~Is the outside space enough for your needs?
~Do you like the layout and functionality of the home?
~Is there enough storage space?
~Imagine the home in good weather and bad – will you be happy with it year round?
~Does the neighborhood and city meet your standards?
~Is the location manageable for commuting?
~Is this home good for both the present and the future?
Take your time and think carefully about each house you see. Take pictures and notes to remember details.
Ask your real estate agent to point out the pros and cons of each home from a professional standpoint.


WHAT QUESTIONS SHOULD I ASK ABOUT A HOME I AM CONSIDERING TO PURCHASE?

Many of your questions should focus on potential problems and maintenance issues.
Does anything need to be replaced?
What is the age and condition of the major systems, such as electric, plumbing, gas lines, heating, and air?
What things require immediate or ongoing maintenance, such as the yard, paint, roof, appliances, flooring, rain gutters, etc?
Is there an Association “HOA”, if so what are the costs and rules?
Consider the neighborhood, focusing on quality of life issues.
Be sure the seller’s and agents answers are clear and complete. Continue to ask questions until you understand all of the information given.
Make a list of questions before inspections and meetings to help organize your thoughts and the information you receive.


HOW DOES PURCHASING A HOME COMPARE WITH RENTING?

For most, the benefits of owning out way those of renting.
One advantage of renting is being generally free of most maintenance responsibilities, and in some areas rent may be somewhat less expensive than the cost of owning. On the downside, renters are not typically protected from rent increases. Renters are generally limited in their ability to make certain changes such as painting, decorating or other house modifications without permission and may be at the mercy of their landlord. Even given those freedoms, transforming a rented space into your own often feels like a waste of time and money. Lastly,  most lease agreements don’t give renters total security that they won’t get “kicked out”. While owning a home has many benefits. When you make a mortgage payment, you are building equity, in turn making an investment. Tax breaks can assist in dealing with financial responsibilities, like insurance, property taxes, and upkeep. Given the opportunity is right, the security and flexibility that go with owning your own home, usually make owning well worth it.