The Home Buyer's Korner

Information presented should be used for educational purposes only.

May 31st, 2015

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The Home Buyer’s Korner

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A Millennial’s Guide to Buying A First Home

Miss 2Are you ready or have you considered taking the plunge and becoming a home owner? Being single or married, with or without children, man or woman; owning a home is one of the wisest decisions you can make. Take the lead in your future and control your own life. Waiting and paying rent simply isn’t the best decision for most millennials in the long term. It’s a big step that may appear challenging for some of you, but it’s not impossible and you have some great option.

Can you buy on your own? Should you? This millennials guide to buying a home will help you determine if you are ready. Here is how smart millennials do it.

Planning to buy a home

Buying a home can be an overwhelming experience, especially if you feel you are on your own making big decisions. List all the important issues and activities related to your dream home. Schedule a time to search for homes, to meet with real estate agents and create a budget to determine how much you think you can afford in monthly payments and let’s get started.

Having a good idea what you want home-wise, where you want to live, and how much you can afford to spend will help keep your focus sharp as you look for the ideal home that meets your need, whether it’s a single-family home, condominium, townhouse, manufactured or modular home.

Finding A Good Neighborhood and Think Safety

NeighborhoodIf you’re a single woman or maybe a single mom, it is better to set your eyes on a neighborhood with low crime. You don’t want to end up in a place where you will feel anxious every time you cross the street or step outside.

During daylight, some neighborhoods seem perfectly fine, but when the sun goes down, it can become a completely different location. A little investigation will give you a better look at a potential neighborhood you’re thinking about moving too. Stop by the nearest police station and talk with the desk sergeant about a neighborhood. You don’t have to take a lot of their time. Just let them know why you stopped by and if they could offer any advice that might be useful to you about a particular area you’re thinking about living in.

Another option is to speak with local merchants and let them know your intentions. They know their clients and their client make up a neighborhood. Check the internet for any crime statistics in the area. Explore the area by driving around the neighborhood during evening hours and see for yourself. Like I said, neighborhoods can change a lot after the sun goes down. And, always be prepared for the unexpected. Keep your doors locked and take a friend with you when exploring a new neighborhood.

Research

Few things in this world fall in your lap and you need to put in some effort to find your dream home. Explore the area, look at available websites and find an experienced real estate agency you feel comfortable with. Ask for advice from people who have already gone through the process. They can even recommend a reliable real estate agent and save you some time. However, always interview even if an agent comes recommended. Just because they were a good fit for someone you know doesn’t mean they the right fit for you. Finding a good real estate agent can be as difficult as meeting your perfect match. Check with established broker offices with stable reputations. Go online and do some searches to determine which agents have a good online presence.

As always, meet with different agents before choosing one. Approach it in the same way as dating. Don’t underestimate the role of real estate agents. An experienced professional will help you to go smoothly through all the procedures.

Don’t hold things up because of you can’t check off everything on your list. Prioritize and keep your expectations reasonable. Otherwise, you will always find some minor flaws and never decide on any home. Just like most things in life by a home means some compromise and you will have to give up one thing for another. Stay focused on the basics that you’re looking for in a home; the rest can come later.

Smaller Probably Is Better

A large house with an acre lot is a dream come true for many would-be home buyers, but know your expectation and limitations. Does your first home really need to be four bedrooms and three and a half baths and requires a lot of yard maintenance? Some day you may have a family or your family will get larger and you’ll need something more appropriate. Until then, think about your current situation. A big house can feel lonely and takes a lot way from other things that may be important in your life.

Think about obligations to work and home, keeping a large living space requires precious time and could be challenging. Smaller houses, on the other hand, require less time to clean, not to mention lower maintenance and utility costs.

Know Your Finances

Don’t apply for a loan if you haven’t checked your credit file. Even the smallest error may result in rejection or a higher interest rate and unfavorable terms. Estimate how much your borrowing will cost with a mortgage calculator. Make a checklist of what you need to know before taking any major steps.

PITI

If you need to get a mortgage, you should get familiar with some basic terms that will come in handy when you plan your budget. Every mortgage payment consists of four components – principal, interest, taxes and insurance (PITI).

Lenders determine whether you qualify for a credit and how much you will pay. The acronym will help you get a more critical insight about the costs associated with buying and owning a home.

Principal –the amount of money that you borrowed and that you need to return to the lender. Usually, loans are structured in a way that you start with a payment, mainly consisting of the interest, and gradually increase converting to principle.

Interest – the amount that the lender charges for taking the risk and lending you money.

Taxes – real estate taxes are assessed by local tax authorities and support public services. Most mortgages will include 1/12th the annual taxes due and pay them.

floodInsurance – there are a few types of insurance you might need; property or hazard insurance protects your home from theft, fire and other disasters, while flood insurance takes care of natural disaster that hazard insurance might not.

Meet with a mortgage lender, who will be happy to pre-qualify you at no cost or obligation. A mortgage lender doesn’t mind taking the time to explain any question you have about the different types of mortgage you might be interested. Take the time to review your credit report with them discuss it together. Doing so will give you the confidence to know what you can look for and any issue you should address before making a formal application. If everything looks great after your first meeting ask for a pre–approval letter and share it with your real estate agent. This document confirms that you qualify for a certain amount of credit and lets your real estate agent know what type of homes to show you.

Unexpected Expenses

Home InspectionThere are always unexpected expenses in life and buying a home and add to it. If you don’t want to be surprised consider the following things that could benefit you along the way. You’re going to have home repairs, upgrades, new furniture need and even small extras add up on your budget. Considering these things when viewing a home gives you the advantage to negotiate the price or to avoid any unpleasant surprises. Getting a home inspection is a good idea. Make sure you hire a qualified professional. It can cost a few hundred dollars, but will be well worth the funds spent, especially if it uncovers problems.

Don’t be afraid of taking major steps in your life just because you might be doing it alone. Instead, embrace home-ownership diligently and with a lot of thought. Your ideal home is there, waiting for you to find it.

If you found this guide to buying a to buying home is helpful, please consider social sharing it so others can enjoy it as well.

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HAWAII HOME OWNERSHIP TOOLS

Your Home Purchasing or Refinancing & Renovation Tools,

Home Improvements, Home Renovations,

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase.

Here are just a few of the home improvements

you might consider with any Home Renovation loan

Repair or replace a roof

Install, replace or repair gutters and downspouts

Replace, repair or upgrade your HVAC system

Repair or replace plumbing

Install, repair or replace electrical systems

Kitchen remodeling (including the purchase and installation of appliances)

Bathroom remodeling, Full interior painting, Total exterior painting

Repair or replace a septic system and/or well

Disability access (wheelchair ramp, elevator, widen doorways)

Build, repair or replace deck, patio or porch

Basement waterproofing and finishing

Abatement/Stabilization of lead-based paint hazards

Replace old windows, Room additions, Finish an attic

Add a second story to your home

Replace a termite damaged sill plate (a water-damaged sill plate also)

Possible landscaping items such as correction of grading & drainage problems,

tree removal, repair a driveway and sidewalks

FHA 203K

Your Home Purchasing or Refinancing & Renovation Tool

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

FANNIE MAE HOMESTYLE

The Conventional Alternative to FHA 203K

Great for Real Estate Investors and Second Home Renovations

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

USDA RURAL DEVELOPMENT

Up to $10K for Home Improvements, Renovations or a Simple Remodel

Mortgage Loan Officers, Real Estate Agents & General Contractors are ready to assist you

A SIMPLE HOME SHOPPING INSPECTION TOOL

Organizing your home shopping experience affords a wise decision-making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

To print this document click on “Open in New Window” located at the lower right corner;

click on “File”; then click on “Print”. In the center of the screen you will

have the option to “Create A Printable PDF of the Presentation”.

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