I think the idea of buying property is like eating spicy food: it tastes good, it’s a bit of a challenge, and in this economy, you can’t be sure if it is worthwhile in the long term.
Ok, that is oversimplifying a commitment perhaps as large as the one to get married in the first place.
Is buying property the perfect investment? The worst? You have to consider your income, job security, school district, re-sell value, neighborhood, not to mention the size of the property, heating or air conditioning costs, etc. … the list goes on and on. You could give yourself an ulcer just thinking about it.
I recently had lunch with Tania Cook of Capital Funding Mortgage and she offered some practical advice for first time home buyers. Of course, every state, couple, etc. is different, but these general suggestions should help get you started.
The first thing Tania emphasized was the importance of setting a budget and keeping track of your money, both as individuals and as a couple. She recommended the budgeting website Mint. This is a free and secure website that that can help you set budgets, tag items for tax deductions, etc. If you are looking for a conversation and community dedicated to saving money, you might want to join the social networking site Wesabe. Two other useful sites are Finicity and Smartypig. They help you save by earmarking money for various expenses and savings.
To those of you in the midst of not only saving for a wedding, but also buying a home, you can help fulfill your savings for a a home by setting up a registry to which wedding guests can contribute. This helps to avoid registering for things that you don’t need or won’t fit in your current, rented apartment.
Tania’s favorite thing is to help people to buy their first home. She remembers that when she bought her first home, she didn’t quite know what she was doing. She sees clients become intimidated and confused by the process, as she once was. She works hard to help explain what all of the documents mean and to untangle any confusion.
It can be a stress point in a relationship to locate the perfect first home – that is, something that fulfills your expectations and is still within your budget. To help limit that stress, Tania suggests sitting down with your partner before you start house hunting. Make two lists: a wish list and needs list. What would you love your house to have, but you might be willing to give up? What is necessary (handicap accessible, baby’s room, etc.) This exercise, done individually and as a team, will help you to set priorities and determine what your bottom line really is.
Then, look to partner with a buyer’s agent and a trusted lender. The lender can be either a bank or broker. In this way, the fees will be charged to the seller, not the buyer. You should look for someone who is an empathetic and experienced realtor.
Remember, you want to determine if your lender is a broker or a banker (brokers can take your loan application to a number of banks whereas a banker works with only one bank.)
There are a number of financial advantages to being a first time home buyer. Look into what might be available to you.
To consider how much you can afford to pay on your mortgage, try using Capital Funding Mortgage Company’s payment calculator.
Whatever you decide to do, be sure to ask a lot of questions. For example, the cost of the new home isn’t limited to the mortgage. You will also have to consider repairs, utility bills, insurance, possible condo association fees, etc. You might want to look for an energy efficient home in order to save on some of the utility bills.
You are eligible for an annual free credit report from each of the three major credit reporting companies: Equifax, Experian and TransUnion. A good trick is to order one report from a different one of the three major consumer credit reporting companies every fourth month.
Tania Cook specializes in creative financing for first time homebuyers, including low down payment financing, no closing cost options and tax rebate programs. She and her company, Capital Funding, offer a variety of programs to make your home purchase and refinance affordable and easy. Tania is an experienced, reliable, mortgage consultant with a referral based practice. She practiced law for several years, specializing in employment issues and was a manager at American Express Financial Advisors for 5 years. Check out her company’s website.