What You Need To Know Before Buying A Home Part One

Are you tired of living in your parent’s basement?  Perhaps the current neighbors sound like a herd of elephants are crashing through your ceiling?  Whatever your reason, buying a new home can be a bit overwhelming.  Below you will find some questions you will want to consider before making the leap into homeownership for the first time. 

Can you afford to buy a house right now?

Purchasing a home, especially for the first time requires a great deal of planning.  Without proper preparations you are willingly exposing yourself to unnecessary risks.  When buying a home you need to make sure that you are fully capable of affording all the aspects that come with it.  A good rule of thumb is to spend less than thirty percent of your monthly income on housing expenses. 

You will want to remember to calculate the private mortgage insurance (PMI) into this figure.  PMI is charged when your down payment is less than twenty percent.  Certain mortgage options, such as FHA financing allow you to purchase a home with only three and half percent down.  In this case PMI is necessary.  PMI is the insurance that the mortgage company takes on your mortgage to cover the risk associated with small down payments.  To avoid paying the extra expense of PMI you will want to have a down payment of twenty percent or more. 

Do you have time to shop for a house?

Buying a home takes time and patience.  You will not want to rush through the house-hunting process.  Take plenty of time to define what you want verse what you need in a home.  Work with a real estate agent that is familiar with the location you are hoping to buy.  Using a professional realtor can certainly help with the time strain that comes with looking for a new home. 

Experienced agents know the ins and outs of the business.  They have connections throughout the industry and a real understanding about the market.  More often than not, experience allows agents to show you only homes within your specifications, thus not wasting your time one options that are not feasible. 

In our next installment, we will look into more questions you need to ask yourself before buying your first home.  There are many aspects that are overlooked especially by first time home buyers.  Asking yourself these few questions can save you a lot of time, money and anguish.  Our next installment on buying your first home we will cover the future, mortgage options, debt and home inspections. 

Lady of the Lakes Real Estate is Livingston County's premiere realtor; out of Pinckney, Michigan helping buyers buy and sellers sell homes that provide a recreational lifestyle including golf courses, lakes and the Huron river chain of lakes, throughout Brighton, Howell, Pinckney and the surrounding area. Find out more at http://www.ladyofthelakes.com.

Tips To Follow Before You Start Shopping For A Home

Set a Budget: Setting a budget and following it is a key concept when buying a home.  No matter what you are qualified for if you don’t feel comfortable with that monthly payment it will cause you undue stress.  Calculate how much you believe you can reasonably afford to spend each month on housing.  This is the most important aspect in buying a home to be successful.  If you are stretched with a payment that is out of your comfort zone homeownership will become a burden rather than an accomplishment.

Include Principal, Interest, Taxes and Insurance In the Budget: If you have been renting you may not be familiar with the fact that your mortgage payment is not alone when it comes to expenses related to your mortgage.  Many lenders will roll the principal, interest, taxes and insurance into your monthly payment.  If you have less than twenty percent down, a PMI expense will be added as well.  Make sure you talk to your lender about these extras as they can almost double your monthly payment.

Determine How Much Cash Is Needed At Closing: Typically your down payment should be between five and twenty percent of the cost of the home.  A down payment of less than twenty percent requires primary mortgage insurance, otherwise known as PMI.  The amount you will need in cash at closing includes your down payment, loan origination fees, title insurance as well as other miscellaneous fees.  Be prepared to have a substantial amount of reserve in your savings as expenses tend to creep up throughout the home buying process.

Research Yearly Utility Rates: Moving to a different climate or larger home can significantly change the monthly payment on your utilities.  The last thing that you want is to get into a home that you can comfortably afford and then learn the heating and cooling expenses knock your budget into chaos. 

Eliminate Debt Prior To Purchase: Try to eliminate as much debt as possible before you start the home buying process.  This will lower your debt to income ratio and give you a better chance at a lower interest rate on your mortgage.  It will also free up cash that is being used on old debt to apply towards your home.

Find Out What Your Credit Score Is: You should know your credit score before beginning to look for a home as well.  There needs to be time to repair any discrepancies as well time to increase your score.  The higher your credit scores the better financial risk you appear to be and thus lenders will be more apt to offer you a lower interest rate within the terms of your mortgage.

Get Prequalified:  A prequalification is something most real estate agents require before they begin showing you homes.  A prequalification is the amount that lenders feel comfortable loaning you.  This will give you a base to begin your search.  The amount you have towards a down payment also factors into the overall amount that you have to spend on a home.

Find A Realtor:  After you have taken all of the above steps you are ready to start looking at homes to purchase.  There are many real estate agents available to show you homes but few are qualified to help you through the entire process.   Work with an agent that understands what your needs are.  They should be familiar with the area you would like to live and be able to offer you stats on the neighborhoods, the schools, crime, recreational options and more.  Don’t just work with anyone.  Find a realtor that is willing to go the extra mile in finding you exactly what you want at the price you can afford.

Lady of the Lakes Real Estate is Livingston County’s premiere realtor; out of Pinckney, Michigan helping buyers buy and sellers sell homes that provide a recreational lifestyle including golf courses, lakes and the Huron river chain of lakes, throughout Brighton, Howell, Pinckney and the surrounding area. Find out more at http://www.ladyofthelakes.com.

Buying A Fixer Upper Allows Homeowners To Get A Deal On Homeownership

Are you looking for a new home in the market today?  There are an abundance of homes for sale that are known as handyman specials.  Fixer uppers are homes that are for sale that are in need of repair.  These homes generally cost less compared to other homes in the area.  Many times these homes are quickly purchased by real estate investors.  After purchasing these locations they fix them up and sell the property at a premium.

These handyman specials are a top target for real estate investors because they are cheap.  With the properties needing a variety of repairs they are sole far below the market value.  While many fixer uppers continue to be purchased by investors there are still plenty of them to be snapped up by residential buyers.  This is a great option for buyers looking for an affordable option in homeownership that aren’t afraid to put in the time, money and sweat equity to fix the home up to meet their needs.

The one thing that homeowners looking at fixer uppers must consider is the cost of repairs.  Most handyman specials are sold “as is”.  You must have a fairly accurate estimate of the repairs the home needs before purchasing a fixer upper.  Don’t underestimate the cost of repairs needed.  This is how many buyers get in trouble when purchasing a fixer upper.

If you are seriously considering a fixer upper it is pertinent that you get a proper inspection.  You will want to make sure you hire an inspector that is reputable in handyman specials.  The structure, roof, heating, plumbing and electrical systems are of the utmost importance.  These five areas are the most expensive repair areas in home renovations.  Substantial expense lies within these repairs.  Only take on a home with these issues if the selling price is well below the market value and can be recouped in the long run.  Look into toxicity issues, mold and the sewer system as well.  A licensed inspector that specializes in this type of home is required when seriously looking into a handyman special.

A home that is worthy of being fixed up can end up being a terrific investment.  As the buyer it is important to understand what needs to be repaired and the costs involved.  Figure out what repairs you can handle on your own and those that you will need to hire out.  For a complete list of local homes that are in need of some tender loving care find a realtor in your area.  A reputable real estate agent can even find a diamond in the rough in even the most amazing areas.  Golf courses, recreational properties, lakefronts and more can all be found below market value.  They may just need a little attention to make them the eye catching beauties they once were.

Lady of the Lakes Real Estate is Livingston County’s premiere realtor; out of Pinckney, Michigan helping buyers buy and sellers sell homes that provide a recreational lifestyle including golf courses, lakes and the Huron river chain of lakes, throughout Brighton, Howell, Pinckney and the surrounding area. Find out more at http://www.ladyofthelakes.com.

Tips To Follow Before You Start Shopping For A Home

Set a Budget: Setting a budget and following it is a key concept when buying a home.  No matter what you are qualified for if you don’t feel comfortable with that monthly payment it will cause you undue stress.  Calculate how much you believe you can reasonably afford to spend each month on housing.  This is the most important aspect in buying a home to be successful.  If you are stretched with a payment that is out of your comfort zone homeownership will become a burden rather than an accomplishment.

Include Principal, Interest, Taxes and Insurance In the Budget: If you have been renting you may not be familiar with the fact that your mortgage payment is not alone when it comes to expenses related to your mortgage.  Many lenders will roll the principal, interest, taxes and insurance into your monthly payment.  If you have less than twenty percent down, a PMI expense will be added as well.  Make sure you talk to your lender about these extras as they can almost double your monthly payment.

Determine How Much Cash Is Needed At Closing: Typically your down payment should be between five and twenty percent of the cost of the home.  A down payment of less than twenty percent requires primary mortgage insurance, otherwise known as PMI.  The amount you will need in cash at closing includes your down payment, loan origination fees, title insurance as well as other miscellaneous fees.  Be prepared to have a substantial amount of reserve in your savings as expenses tend to creep up throughout the home buying process.

Research Yearly Utility Rates: Moving to a different climate or larger home can significantly change the monthly payment on your utilities.  The last thing that you want is to get into a home that you can comfortably afford and then learn the heating and cooling expenses knock your budget into chaos. 

Eliminate Debt Prior To Purchase: Try to eliminate as much debt as possible before you start the home buying process.  This will lower your debt to income ratio and give you a better chance at a lower interest rate on your mortgage.  It will also free up cash that is being used on old debt to apply towards your home.

Find Out What Your Credit Score Is: You should know your credit score before beginning to look for a home as well.  There needs to be time to repair any discrepancies as well time to increase your score.  The higher your credit scores the better financial risk you appear to be and thus lenders will be more apt to offer you a lower interest rate within the terms of your mortgage.

Get Prequalified:  A prequalification is something most real estate agents require before they begin showing you homes.  A prequalification is the amount that lenders feel comfortable loaning you.  This will give you a base to begin your search.  The amount you have towards a down payment also factors into the overall amount that you have to spend on a home.

Find A Realtor:  After you have taken all of the above steps you are ready to start looking at homes to purchase.  There are many real estate agents available to show you homes but few are qualified to help you through the entire process.   Work with an agent that understands what your needs are.  They should be familiar with the area you would like to live and be able to offer you stats on the neighborhoods, the schools, crime, recreational options and more.  Don’t just work with anyone.  Find a realtor that is willing to go the extra mile in finding you exactly what you want at the price you can afford.

Lady of the Lakes Real Estate is Livingston County’s premiere realtor; out of Pinckney, Michigan helping buyers buy and sellers sell homes that provide a recreational lifestyle including golf courses, lakes and the Huron river chain of lakes, throughout Brighton, Howell, Pinckney and the surrounding area. Find out more at http://www.ladyofthelakes.com.

Buying A Fixer Upper Allows Homeowners To Get A Deal On Homeownership

Are you looking for a new home in the market today?  There are an abundance of homes for sale that are known as handyman specials.  Fixer uppers are homes that are for sale that are in need of repair.  These homes generally cost less compared to other homes in the area.  Many times these homes are quickly purchased by real estate investors.  After purchasing these locations they fix them up and sell the property at a premium.

These handyman specials are a top target for real estate investors because they are cheap.  With the properties needing a variety of repairs they are sole far below the market value.  While many fixer uppers continue to be purchased by investors there are still plenty of them to be snapped up by residential buyers.  This is a great option for buyers looking for an affordable option in homeownership that aren’t afraid to put in the time, money and sweat equity to fix the home up to meet their needs.

The one thing that homeowners looking at fixer uppers must consider is the cost of repairs.  Most handyman specials are sold “as is”.  You must have a fairly accurate estimate of the repairs the home needs before purchasing a fixer upper.  Don’t underestimate the cost of repairs needed.  This is how many buyers get in trouble when purchasing a fixer upper.

If you are seriously considering a fixer upper it is pertinent that you get a proper inspection.  You will want to make sure you hire an inspector that is reputable in handyman specials.  The structure, roof, heating, plumbing and electrical systems are of the utmost importance.  These five areas are the most expensive repair areas in home renovations.  Substantial expense lies within these repairs.  Only take on a home with these issues if the selling price is well below the market value and can be recouped in the long run.  Look into toxicity issues, mold and the sewer system as well.  A licensed inspector that specializes in this type of home is required when seriously looking into a handyman special.

A home that is worthy of being fixed up can end up being a terrific investment.  As the buyer it is important to understand what needs to be repaired and the costs involved.  Figure out what repairs you can handle on your own and those that you will need to hire out.  For a complete list of local homes that are in need of some tender loving care find a realtor in your area.  A reputable real estate agent can even find a diamond in the rough in even the most amazing areas.  Golf courses, recreational properties, lakefronts and more can all be found below market value.  They may just need a little attention to make them the eye catching beauties they once were.

Lady of the Lakes Real Estate is Livingston County’s premiere realtor; out of Pinckney, Michigan helping buyers buy and sellers sell homes that provide a recreational lifestyle including golf courses, lakes and the Huron river chain of lakes, throughout Brighton, Howell, Pinckney and the surrounding area. Find out more at http://www.ladyofthelakes.com.

Steps To Simplify The Home Buying Process Part 2

In this continuation we continue to define the steps buyers can take to simplify the home buying process.

Look for a new home: This is where you’re your realtor comes into play.  Your realtor will help you narrow down the homes for sale that meet the criteria you set.  They will only have you look at homes within your budget that fit your needs.  If you are looking for a three bedroom home there is no use looking at homes with anything less than that.  These are the types of criteria that you will share with your real estate agent that will allow them to find you a selection of homes to look at.

Make an offer: Once you find your dream home your real estate agent will help you draw up a contract and submit an offer to the homes seller.  They will look at your offer and determine whether they will accept the offer or counter offer.  This process continues until an offer is agreed upon and a contract is drawn up.

Get an inspection:  Every contract should be written with a stipulation that states a final sale is pending the results of a home inspection.  Hire a reputable home inspection company to come in and evaluate the state the home is in.  They will create a checklist and booklet that states clearly what issues the home has.  They will divide the list into categories about repairs that must occur now, that can wait or are optional upgrades that would allow the home to function smoother.  The inspector will give you a better understanding of how old the utilities and appliances are.  This information allows you as a home owner to get a solid understanding of money that will need to be spent on home repairs and a likelihood of when it will be needed.  If the inspector will basically let you know if the home is a solid investment or if it has issues that need to be fixed before the home should be purchased.  If the contract is contingent on the inspection it is then up to you to decide to move forward, the contract needs to be reworked or if the deal is a no go.

Apply for a mortgage/Close on your new home:  The final step of buying a home is applying for a mortgage and closing on your new home.  To find out more information on applying for a mortgage talk with a local mortgage broker or lender.  These professionals will offer guidance in finding the best mortgage rate and home loan option for your exact situation.  After this is done a closing date will be set and you will close on your new home.

The process of buying a home is one that can be quite simple with a bit of knowledge on how the process works and the wisdom to hire experts when needed.  Real estate agents, home inspectors and mortgage brokers all help to simplify your home ownership quest.

Lady of the Lakes Real Estate is Livingston County’s premiere realtor; out of Pinckney, Michigan helping buyers buy and sellers sell homes that provide a recreational lifestyle including golf courses, lakes and the Huron river chain of lakes, throughout Brighton, Howell, Pinckney and the surrounding area.  More information can be found athttp://www.ladyofthelakes.com.

Steps To Simplify The Home Buying Process Part 1

The idea of buying your first home can be overwhelming for some.  Working with a professional realtor can help alleviate many of the stressors that can make buying a home a process that is intimidating.  To simplify the process even further follow the checklist below.

Complete a credit check: You need to have solid credit to apply for and receive a mortgage.  This is why the first step in the process of home ownership is completing a credit check.  This will allow you to correct any errors that exist with your credit report.  A low credit score means a higher interest rate on your mortgage.  If your score is incredibly low and you have several late or missing payments take time to correct these issues before looking into purchasing a home.

Set a budget with mortgage preapproval: Setting a budget is simple especially when you look into getting pre-approved.  A pre-approval will give you an idea of exactly how much the mortgage lenders feel comfortable in lending to you.  This is the amount they feel you will be able to pay back to them in monthly payments including interest.  A rule of thumb in general is that your home that cost between two and a half to three times your yearly salaries.  Most lenders will not allow you to spend more than thirty six percent of your gross monthly income.

Gather cash savings: It is preferable to have a down payment of twenty percent when buying a home.  This will account for your closing costs as well as your down payment.  Twenty percent allows you to avoid paying private mortgage insurance.  Different loan options have different regulations.  It is crucial to have as much cash on hand as possible when buying a home to have a substantial down payment as well as money for closing costs and fees as well as additional expenses that occur with moving into a new home.

Find a local real estate agent: This is perhaps one of the most critical requirements to finding and purchasing a home.  A local real estate agent that specializes in finding homes for clients with specialized circumstances is most favorable.  If you are a new home buyer find a realtor that specializes in new home purchases.  If you are looking for a home on a lake or golf course find a realtor that finding homes to fit a recreational lifestyle.

There is more to come in our next installment on simplifying the homeownership process.

Lady of the Lakes Real Estate is Livingston County’s premiere realtor; out of Pinckney, Michigan helping buyers buy and sellers sell homes that provide a recreational lifestyle including golf courses, lakes and the Huron river chain of lakes, throughout Brighton, Howell, Pinckney and the surrounding area.  More information can be found athttp://www.ladyofthelakes.com.