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Buying a Home

July 17, 2017

Homeownership is becoming a reality for more and more Americans. Yet many Americans do not realize that homeownership is within their grasp. In order to find out if you are ready for the American Dream, there are a few key questions you should answer prior to deciding to purchase a home.

Answering “yes” to the first three questions and “no” to the last two means, you are probably ready to get started!

How to Begin

If you are wondering where to begin, start by thinking about your current situation. How much of monthly mortgage payment plus other monthly expenses can you comfortably afford?  Where would you like to live? How many rooms do you need? Create a checklist and start your research. Be sure to think about Ask around, drive through neighborhoods you would like to live in, look at the “homes” page in your local newspaper. Utilize online tools to help you through the process of searching for a home. At www.BHHSHodrickRealty.com you can search all homes for sale in our area including the following counties:  Lycoming, Clinton, Sullivan, Union, Snyder, Northumberland, Montour and Columbia. If you create an account, you are able to save your favorites and set up a search that will send you an email when a home matches your criteria.

Renting vs. Owning

When looking for the home you love, it becomes a bit daunting and many time potential homebuyers ask themselves, why shouldn’t we just continue renting? One advantage of renting is that it is much easier as you are usually not responsible for property maintenance. There are several disadvantages of renting, such as you are not able to build equity, you cannot take advantages of tax benefits, or protect yourself against rent increases. You are at the property owner’s mercy if you choose to rent rather than buy.

There are substantial benefits to owning a home. When you pay your mortgage, you are making an investment in the form of building equity. Equity is the different between your home’s fair market value and the outstanding balance on the property. Owning also gives you the freedom to live in your home the way you would like to while qualifying for tax breaks associated with your new expenses. i.e real estate taxes, upkeep and home insurance.

How much can you afford?

In order to determine how much of a mortgage you can afford, lenders use a debt to income ratio. Debt to income ratios compare your before tax income to both housing and no-housing expenses. Examples of non-housing expense are student loan payments and car payments. When determining your loan amount, lenders also take into account the amount of money you have to put down, your credit history and whether you have enough to pay an attorney to close your property, i.e. closing costs.

Finding the Right Agent

When looking for a real estate agent, start by asking your friends and family about agents they have had good experiences with. Interview multiple agents and pay close attention to those who listen well, seem to understand what you are looking for and who you trust. Your ideal pick would be an agent who knows the community well and has contact and resources to help you in your search. You want to work with an agent you are comfortable with, who is knowledgeable and can provide the services you need. Check out your #goodtoknow agents, here.

Buying HUD Home

HUD homes can be a one-to-four unit single-family residence acquired because of a foreclosure on a Federal Housing Administration (FHA)-insured mortgage. When this occurs the Federal Housing and Urban Development pays the defaulted loan off, and then puts the home on the market.

Many people are interested in buying HUD owned houses because of a possible low market value of the home. Pricing of HUD homes is based on a recent appraisal and offered for sale at a fair market value; meaning HUD prices these homes to sell quickly, which means you can get a good deal when you purchase a HUD home. HUD homes are sold “AS-IS”.

Many HUD Homes can be purchased with FHA-insured mortgages, which allow you to purchase the home with a low down payment. You do not have to be a first-time buyer in order to qualify for an FHA loan. The FHA is a sub-agency within the U.S. Department of Housing and Urban Development, or HUD, that administers FHA-insured mortgage loans. An FHA loan is one that HUD agrees to buy from the bank or mortgage company that issued the loan in the event of a default.

You can search online for available HUD homes on www.HUDHomeStore.com. This database allows you to search by state, county or zip code. For additional information on the HUD process visit www.HUD.gov

 

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