Great reasons to buy your own home:
Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, property taxes you pay, as well as some of the costs involved in buying your home.
Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
Predictability. Unlike rent, your mortgage payments don’t go up over the years so your housing costs may actually decline, as you own the home longer. However, keep in mind that property taxes and insurance costs will rise.
Freedom. The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.
Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.
Take the trauma out of home buying:
Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price, and a good home won’t stay on the market long.
Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.
Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go.
Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price may lose you the home you love.
Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home.
Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.
Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate.
Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits.
Choose a home first because you love it; then think about appreciation. A home’s most important role is as a comfortable, safe place to live.
Tips for buying in todays market:
Get pre-qualified for a mortgage. In this way, you’ll be able to make a firm commitment to buy and make your offer more desirable to the seller.
Stay in close touch with your real estate sales associate to find out first about new listings that come on the market. And be ready to go see a house as soon as it goes on the market.
Scout out new listings yourself. Look at Internet sites, newspaper ads, and drive by the neighborhood frequently. Maybe you’ll see a brand-new “for sale” sign before anyone else.
Be ready to make a decision. Spend lots of time in advance deciding what you must have so you won’t be unsure when you have the chance to make an offer.
Bid competitively. You may not want to start out offering the absolutely highest price you can afford, but don’t try to go to low and get a deal. In a tight market, you’ll lose out.
Keep contingencies to a minimum. Restrictions such as needing to sell your home before you move or wanting to delay the closing until a certain date can make your offer unappealing. In a tight market, you’ll probably be able to sell you house rapidly. Or talk to your lender about getting a bridge loan to cover both mortgages for a short period.
Don’t get caught in a buying frenzy. Just because there’s competition doesn’t mean you should just buy anything. And even though you want to make your offer attractive, don’t neglect inspections that help ensure that your house is sound.
What the lenders need from you:
W-2 forms or business tax return forms if you’re self-employed for the last two or three years for every person signing the loan.
Copies of at least one pay stub for every person signing the loan.
Copies of two to four months of bank or credit union statements for both checking and savings accounts.
Copies of personal tax forms for the last two to three years.
Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, e.g., a boat, RV, or stocks or bonds not held in a brokerage account.
Copies of your most recent 401(k) or other retirement account statement.
Documentation to verify additional income, such as child support or a pension.
Account numbers of all your credit cards and the amounts of any outstanding balances.
Lender, loan number, and amount owed on other installment loans, such as student loans and car loans.
Addresses where you have lived for the last five to seven years, with names of landlords if appropriate.
Frequently asked questions about mortgages:
What will my payments be?
For example, a $100,000 mortgage, for 30 years, with a fixed interest rate of 6.5% will yield a monthly payment of approximately $632.07.
Therefore, a $150,000 mortgage, for 30 years, with a fixed interest rate of 6.5% will yield a monthly payment of approximately $948.10.
Will there be any other expenses added to my monthly mortgage payment?
Yes, most mortgage companies require that you also pay 1/12 of your real estate taxes and homeowner’s insurance with each monthly payment. This is held in an escrow account, with the mortgage company, and they become responsible for payment of your yearly taxes and homeowner’s insurance. Generally, they do not escrow for your association dues. Ultimately, you are responsible for the payment of those.
What will I need when I speak with a mortgage consultant?
They will begin by asking about your current residency and job history. They will also ask for your social security number and date of birth so a credit history can be obtained. This information will help determine what you will be comfortable spending on your new home.
What will I need for the application process?
The mortgage consultant that you choose will send you an application for completion. They may also request items like your most recent pay stubs, bank statements and two years of income tax filings. Even after all of that, they may still request additional information, so always be ready to assist in any way possible.
How long will it take to complete the mortgage process?
Most mortgage companies can reach the settlement table in approximately 45 days from the date of your application. On occasion, unforeseen circumstances arise and this may take longer.
Time saving moving tips:
Clean House! The first rule of moving is to get rid of unnecessary clutter before you go. That way you won’t have to find a place for those rarely-used items when you get to your new home. Host a garage sale or donate goods to a local charity.
Get organized. Two months before your move, keep track of all your mail and make a list of people, subscriptions, and organizations that should be notified. Contact the postal service to change your address. Don’t forget about your bank, your insurance agent, your doctor and your vet.
Cancel and re-order. Make another list that includes utilities such as telephone, gas, electric, water, cable and Internet access. Remember to contact your pest control, lawn care, window cleaning and other services to let them know about your move. Proper planning insures that you won’t be paying for services you’re not using.
Be “mover friendly”. If you’re using a professional moving company, make your available to answer questions on both ends of the move—loading and unloading. Review the home inventory paperwork and make sure the driver has your contact information and details of your delivery.
Be safe. Whether you’re hiring professionals or doing it yourself, remove all rugs, low hanging items and tripping hazards. Keep walkways clear at all times. Arrange for someone to take care of your children and pets while everything is being packed and loaded onto the moving truck.
Know what you’re packing. Label boxes in detail, including contents and the room in which they belong. This will save time and questions for your and your movers. Pack essentials like a change of clothes, snacks, and the coffee make and take them with you.
Know what NOT to pack. Charcoal lighter fluid, pesticides and paint thinner are a few of the items that professional moving companies won’t touch. Make arrangements to transport these items or leave them with a neighbor. Valuables such as cash, jewelry and important documents should stay with you or be shipped via traceable shipping service.
Check and double check. Before the moving van leaves, make sure everything is loaded or unloaded, for both ends of your move. Check the attic, basement, closets, and garage for things you may have forgotten. If something is damaged during the move, notify your moving company immediately and take photographs of the damaged item.
Keep smiling! Moving can be manageable, with the right attitude and thoughtful preparation. It will all be over soon — and you’ll have days, weeks or even months to unpack at your leisure. Throw yourself a “welcome home to your new home” party and meet your new neighbors.
**These great tips brought to you by Lowe’s® Home Improvement Stores**
Tips for packing like a pro:
Develop a master “to do” list. This way you won’t forget something critical.
Sort and get rid of things you no longer want or need. Have a garage sale, donate to a charity, or recycle.
Pack like items together. Put toys with toys, kitchen utensils with kitchen utensils.
Decide what if anything you plan to move yourself. Precious items such as family photos, valuable breakables, or must-haves during the move should probably stay with you.
Use the right box for the item. Loose items encourage breakage.
Put heavy items in small boxes so they’re easier to lift. Keep all of you boxes under 50 lbs.
Don’t over-pack boxes. This may increase the chances of something breaking.
Wrap every fragile item separately. Also pad the bottom and sides of boxes.
Label every box on all sides. You never know how they’ll be stacked and you don’t want to have to move other boxes aside to find out what’s there.
Use color-coded labels to indicate which room each item should go in. Color-code a floor plan for your new house to help movers.
Keep your moving documents together, including phone numbers, driver’s name and van number. Also keep your address book handy.
Inspect each box and all furniture for damage as soon as it arrives.
Remember, most movers won’t take plants.