FAQ’s Answered for First Time Homebuyers

November 5, 2020/in Housing /by Cara Chatellier

When it comes to taking the leap and buying your first home, the process can feel nothing short of overwhelming. With a wish-list in one hand and a budget in the other, there are hundreds of questions flying through your mind day and night. The process can be a wonderful experience if you are working with a realtor who understands your goals and communicates in an effective and timely manner. The process can also work wonderfully when you know what to expect throughout the homebuying experience. Getting (and staying) informed will alleviate extra stress and confusion. We wanted to make things as smooth as possible for you, so, here are the answers to some of the most frequently asked first time home buying questions.

Who qualifies as a first-time buyer?

If you’ve never purchased a home before, you’re automatically placed in the first-time home buyer category. Those who have purchased a home in the past can be considered as a first-time buyer again after 3 years from their previous homeownership.

What questions should I consider before making the big purchase?

There are various questions that you should reflect upon before deciding if it is the right time for you to begin the first-time home buying process. Consider asking yourself these before moving forward with pre-approval and home search.

Does my current income allow me to purchase the home size that I need?
Do I have money saved for a down payment?
What does my credit score look like in detail?
Will I need a co-borrower?
What are my plans over the next 3-5 years?

How much will my down payment be?

In most instances you will need to put money down when purchasing your home, but the amount differs based on mortgage loan type. On average, Americans put about 6% down when purchasing. This can easily be calculated by determining what the percentage equals in dollar value based on the total sale cost of the home. For example, 6% of a $250,000 home loan would equate to a down payment of $15,000. Oftentimes, though, home loans for new buyers range from 0% down (VA and USDA) to 3.5% (FHA). To learn what loans you qualify for, contact a mortgage specialist to walk you through the approval process. Once approved, you begin the new home hunt.

What credit score qualifies me for home purchase?

Credit can play a huge role in your buying power. As with most purchases, the higher your score is the better the rate you receive will be. Credit score is considered when looking at general loan approval odds, amount of loan approval and interest rate percentage. For a conventional home loan your score should be about 620 or above. In some instances, FHA approves those with scores of 580+.

Once I have a mortgage pre-approval how do I begin my home search?

The mortgage pre-approval is the first big green light on your home buying journey. At this point you know the range you can spend on your new home. Next, you can begin searching for available homes in your desired area. Working alongside a trusted realtor, you can take virtual or in-person home tours of houses that spark your interest. Once you decide on a home that fits the bill for you, you can move forward with submitting an offer for purchase.

What is “closing” and how long does it take?

Closing is the final step in your home buying process. During the time of home purchase contract completion, between you and the homeowner, a date for closing is decided upon between both parties. In general, closing can take anywhere between 30 to 45 days. The closing date marks the day that the home officially belongs to you and you can begin moving in.

We understand that the road to homeownership may feel tremendous in feat. It is a new chapter that you are beginning for yourself and your family. We can assure you that once you move through the process, it is quite incredible to experience. Work with a realtor that can walk you through all stages of the process while easing stress and anxieties that may pop up along the way. To learn more about the value of first time homeownership, or to get started on your home buying process contact us today.

Renting vs. Buying: Deciding What Option is Best for You

October 14, 2020/in Education, For Sale /by Cara Chatellier

We’ve always been told that purchasing a home is one of the pillars to life’s success. We run through a checklist in our heads of what we hope to have by X age to make us feel accomplished. From marriage and children to a stable job that provides sufficient income and a nice car, a house is one of those achievements that tops the list for most. Rightfully so! Owning a piece of property that we can call our own is no small feat and should be an achievement we celebrate and strive for. Understanding when the right time to buy is key to getting the most out of your purchase. If your waffling between the ideas of buying and renting, consider these factors before making the leap.

Location, Location, Location

Are you comfortable in your current location? Is this spot somewhere you can see yourself in 5 years? 10 years? Reflecting on your location is key to deciding whether you should buy or rent in your current area. If you are unsure whether you want to stay put or take up space in another locale within the next 5 years or less, buying may not be right for you at this stage. Often we hear that renting is about pouring money into something that doesn’t belong to us, but in turn for the rent we pay we can get a pretty nice pad to stay in, so it’s not a total loss, especially if you don’t plan to be in the area forever. In contrast, if you feel as though you want to stay where you are for the long run it may be best to start the buying process so that you can invest in a property that belongs to you for years to come.

Purchasing power is key

Before you can make a sound decision on whether or not purchasing a house works for your lifestyle, you need to gage your overall purchasing power. There are various factors that play into your purchasing power including credit score, savings amount, down payment, debt to income ratio and payment history on major debts such as past mortgages, credit cards and car loans. When determining your pre-approval amount, a loan processor will look at these factors to determine whether or not you are sound enough to purchase a home, along with providing the amount of loan you will be allowed to borrow for your new mortgage. If you don’t meet all of the criteria requirements, or are on the lower end of the spectrum, when it comes to purchase power versus your wish list, renting may be the best option until you are able to bring all aspects to pristine health. During your rental period, focusing on cleaning up your credit and saving money diligently for your down payment are key aspects of growing your purchasing power.

The future is now

If you’ve decided that the home purchase route is the right one for you, consider what the future may hold for you. Reflect on questions such as:

Will I be married or have roommates now or in the future?
Do I plan to grow my family?
Do I want pets?
Do I plan to host holiday gatherings, events or guests at my home often?
Do I want to build on or renovate a home or do I prefer a move-in ready type?
What floor plan layout works best for my plans now and in the future?

Although you plan to purchase now, or in the near future, you must contemplate your wants and needs that may arise in the future. This way, your home will fit your changing lifestyle as you, and your family, grows and changes. If you are uncertain of your future plans or prefer not to completely reflect on them at this time, renting would be the best option as you can, oftentimes, choose between a long-term or short-term lease agreement.

When deciding whether renting or buying a home is the right option for you, there are many different factors to reflect upon before jumping headfirst into your option. Consider factors such as your financial buying power, your debt to income ratio, your savings and purchase plan and your future personal goals. Understanding the full picture will allow you to make the best choice for you now. Still not sure what the best option is for you? Contact me today, I would love to help walk you through the process to determine the best route for you.

Understanding HOAs: Is it Right for You?

July 17, 2020/in Community, Education, Housing /by Cara Chatellier

When purchasing a home, there are many boxes on your checklist to mull through to ensure you are finding the perfect fit for you and your family. Aside from location, home size, loan details and wish list items you may be posed with the idea of a Homeowner’s Association (HOA for short). Understanding an HOA and determining if it is right for you is key to buying success.

What is an HOA?

In short, a homeowner’s association is a group established within a specific community that manages the common areas, community amenities and set of rules and regulations. The association is made up on member’s elected by neighbors within the community. HOA’s are most commonly found in condominiums, townhomes and planned single-family neighborhoods. Within HOA’s you can usually find a document known as the Declaration of Covenants, Conditions and Restrictions (CC&R). This document outlines the community rules and regulations that each resident needs to follow.

Is there a cost for HOAs?

Yes. Generally speaking, the more amenities, the higher the cost. The HOA fee is separate from your mortgage and covers the cost of the community upkeep and amenities. Fees can sometimes differ within a community based on home size and upkeep requirements for specific locations. In most buying situations, you’ll have the opportunity to speak to an HOA representative prior to purchase, so make sure to ask about fees, increases and coverage so that you have a good handle on what to plan for budget-wise.

What amenities are included?

Amenities are based on specific communities. Some include a gated entrance for added security, a community pool, tennis courts, a community center for use during personal gatherings, free events, lawn maintenance or golf course access. Lesser, yet still important, amenities that are normally included are trash and recycling pickup and additional guest parking lots. A full list of amenities should be included with each home showing.

Do HOAs impose restrictions on residents?

It’s possible. The CC&R outlines the rules and regulations of your specific community. Some HOAs are strict on things such as lawn care, exterior home décor, parking, and, even, things like whether or not a garage door can be left open during the day. Make sure to review the rules in detail prior to making a final decision on your HOA home purchase.

What are the biggest pros of HOAs?

HOAs keep things running smoothly within a community if they operate effectively. Their rules and regulations assist in keeping the community safe and clean. HOAs give you access to amenities normally not included with a standard home purchase. HOAs have been shown to increase your home value by as much as 4.2%.

What are the biggest cons of HOAs?

Depending on your viewpoint, the controls imposed by HOAs can be considered a con. If you like to be fully in charge of your home decisions an HOA may not be right for you. The additional fee may also be looked at as a con depending on your budget. If an HOA is run poorly, lack of attention to the CC&R, additional fees and mismanagement are con contenders.

Deciding whether an HOA is the right choice for you depends on your home buying requirements. If you are looking to be part of a community that has additional amenities an HOA may be a great choice in your home search requirement. Consider both the pros and cons prior to deciding how you wish to proceed with your next home purchase.