This site is dedicated to the first-time homebuyer from the perspective of a first-time homebuyer. Buying your first house can be a confusing, error-proned experience. Your purchase is, most likely, the largest investment of your lifetime. With the tips provided on this site and the author’s Guide To Buying Your First House, your home purchase should be one of the most prudent investments of your life.
© Norine Peardon, 2011
You have decided, it is time to purchase your first house. You are tired of seeing your rent payments gone with no personal equity. Where do you start the process of buying your first house? The first step is to ascertain how much house you can afford. This is actually pretty simple.
First and foremost, your housing cost should not exceed more than 30% of your disposable (after tax and deductions) income. Example:
your income is $60,000 per year, times 30% equals $18,000 divided by 12 equals $1500 per month maximum housing cost. Here, my suggestion is to stay on the low end of your housing cost and, if your household has two incomes (husband and wife), only calculate your housing cost on
one income. Why one income? The reason is that if one is laid off or loses their job, your housing cost will not break your budget due to decreased income. Keep in mind your housing cost will have to cover your mortgage payments, taxes, insurance and repairs.
© Norine Peardon, 2011
As you become familiar with your first old house, you will find ways to correct the inperfections. This article will demonstrate just some ideas on what you can do. Most of the following ideas are inexpensive. After all, following the purchase of your first house, there is not much money left.
Your house is bare. Your furniture that more than filled your apartment now is not enough for the space you have. Rummage sales may provide some answers to your barren dilemma. Prices at rummage sales can be negotiated and you may walk away with a real find. Also, check out framed pictures at rummage sales because, you may not like the current picture, but it can be changed to something that is more in tune with your liking. New picture frames are very expensive.
The Best Time in History to Buy a House
By Dr. Steve Sjuggerud
Friday, January 28, 2011
“Right now, is the best time in history to buy a house in America.”
© Norine Peardon, 2010
If your mortgage is at a very large bank, you have made a mistake! Trying to work out a solution to your deficiency is very complicated and the service is lousy.
A friend was delinquent with her mortgage payments. She had owned her property for 37 years. The bank filed the papers to put the property in receivership (foreclosure action) to the bank. The friend immediately phoned the bank to see if there was anything she could do. She worked out a plan with the bank to reduce her payments and followed through for 13 months of on-time, full, adjusted payments. When she attempted to make the 14th payment, the bank returned it.
What is in buying a house for you? Our basic needs are housing, food and transportation. Notice, housing is number 1. Under housing, we have rentals, owning and other forms of providing housing such as sleeping in your car or the street. The last two have some severe obstacles.
Renting is a great alternative to buying except in our current economy environment. Once you pay your rent, the money is gone, spent! As a general rule, personal privacy falls to the wayside when renting. Your rent will probably not buy as much as your mortgage payments will.
Should you replace it? In today’s times, everything is energy efficient. So let’s take a look at options.
When money is in short supply, obviously, it would be imprudent to replace your furnace. Or is it imprudent?
It depends on your circumstances for the most part. Yes, the investment in a new furnace is a costly expenditure but the savings may be greater than the cost of heating your home with your present obsolete furnace. With gas and oil utility rates ever increasing, a calculation of present cost versus cost with a new furnace or heating system should be carefully analyzed.
The first time you fulfill the “American Dream” in buying your first house is a real adventure. Terms like title, title company, escrow, mortgage, fha requirements, inspection all seem pretty foreign. In this case, “learn from experience” is not the best way to go. You can buy smart with a little training.
Your investment is too large to just “learn by experience”. For example, you will have to decide which type mortgage suits your needs the best. Your investment meaning downpayment. If you are considering purchasing a home priced at $100,000, then you would need $10,000 to $20,000 as a downpayment. Would you just hand that kind of money over to someone you didn’t know and have yet to trust? I am sure you would not without considering many things prior to doing it. A “learning curve” would not be the best approach.
What is mortgage escrow? The amount you must pay each month to cover your property tax liability and property insurance annually.
Not many people are aware that your mortgage lender may allow you to control your own escrow account. This has certain advantages.
A self-managed escrow account can be located at the financial institution of your choice. You can shop for the best deal. If it is interest bearing, you will make a little money as the balance increases. It may not be a lot but “something is better than nothing.”
Your new house is waiting for you. Waiting for what, you ask? Waiting for you to make the changes that will give the house character and make it “Your House”.
A house has style and character. The style will be pretty well set and dictated by when the house was built. Some people have remodeled their homes so that the style is almost invisible. This is a choice every new owner will make. Older homes generally have a volume of history, not only style history but, also, owner history. If the style is not acceptable to you, you have purchased the wrong house. In otherwards, go with the flow!