Am I ready to buy a home?
If you rent the home you live in, the right planning could enable you to buy a home.
To discover your homebuying potential, calculate your: Income, Savings, Monthly
expenses, and Debt.
These factors determine how big a loan you can afford and how buying a home will
affect your monthly budget.
Use the worksheets below to calculate your finances. Print these pages, and fill
in the blanks. When you are done you will have a total for each of the four categories
listed above. Later you can use these numbers in the Affordability Calculator to
determine how much house you can afford.
Should I use a real estate broker? How do I find one?
Using a real estate broker is a good idea. A real estate professional can guide
you through all the details, including financial ones, of buying a home. A real
estate broker will be well acquainted with all the important things you’ll want
to know about a neighborhood. The agent will help you determine the price range
you can afford and will search the classified ads and multiple listing services
for homes in your price range. The broker also has immediate access to homes as
soon as they’re put on the market, so your chances of locating what you want increase.
Once you want to make an offer, the broker can point out ways to structure your
deal to save you money. The agent will explain the different types of mortgages,
guide you through the paperwork, and answer last-minute questions when you sign
the final papers.
You should be aware that unless you have specifically requested a Buyer’s Agent,
the agent essentially represents the seller.
When I find the home I want, how much should I offer?
Again, your real estate broker can help you here. But there are several things you
should consider:
- Is the asking price in line with prices of similar homes in the area?
- Is the home in good condition or will you have to spend a substantial amount of
money making it the way you want it? You probably want to get a professional home
inspection before you make your offer. Your real estate broker can help you arrange
one.
- How long has the home been on the market? If it’s been for sale for a while, the
seller may be more eager to accept a lower offer.
- How much mortgage will be required? Make sure you really can afford whatever offer
you make.
- How much do you really want the home? The closer you are to the asking price, the
more likely your offer will be accepted. In some cases, you may even want to offer
more than the asking price, if you know you are competing with others for the house.
What if my offer is rejected?
They often are! But don’t let that stop you. Now you begin negotiating. Your broker will help you. You may have to offer more money, but you may ask the seller to cover some or all of your closing costs or to make repairs that wouldn’t normally be expected. Often negotiations on a price will go back and forth several times before a deal is made. Just remember — don’t get so caught up in negotiations that you lose sight of what you really want and can afford!
What are Homeowner's Tax Benefits?
Purchasing a home can provide valuable tax savings to homebuyers. Mortgage interest,
property tax, and other payments associated with financing a home can apply to your
tax deductions. They may decrease the amount of income tax you must pay to the federal
government.
Another financial advantage to owning a home is that as you begin to pay off your
mortgage loan, you build equity in your property. In other words, the value of your
home can increase as your total mortgage amount decreases over time.
For those who rent, the tax savings of ownership go to the landlord, not to the
tenants. Wouldn't you rather build equity for yourself every month instead of paying
someone else and giving away "your" tax savings?
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