It’s one of the biggest decisions of your life – buying a home. Not to be taken lightly, looking for your first home is incredibly important. Not only is it the place where you plan to put down roots, become part of a community, and make friends with your neighbors, it’s where you may start a family and raise children. With that, it’s imperative for first-time homebuyers to be fully informed and prepared before house hunting. The Joseph Bograd Real Estate Team, your source for Bucks County houses for sale, wants to walk you through a few house-buying tips to give you an advantage before venturing out.
When to Buy Instead of Rent. There are many different advantages and disadvantages to buying a home versus renting a home. Weighing both options and figuring out the pros and cons of each for you personally is key. Most start out renting because there is a low upfront financial investment. However, when renting, your monthly payments are merely an expense that evaporates into the cosmos.
Buying a home requires more money upfront, but presents many financial perks in return. A portion of each payment reduces the outstanding loan balance you have each month, with a fixed-rate mortgage. Property taxes and mortgage interest can be deducted from your taxable income each year. The market value of your home may increase with time and allow you to build upon your equity. Owning your home also allows you the opportunity to express your personal style with customization and decor that you might otherwise find wasteful of time and money when renting.
Keep in mind though that owning a home leaves you with the responsibility of maintenance costs and basic upkeep expenses, that sometimes can be unexpected. Those responsibilities fall on the property owner and/or superintendent of a rental unit.
The Right Time to Buy. Knowing when the right time to buy a home is absolutely vital and can be different for each person. A few questions to ask yourself before considering owning a new home include whether or not you have a good credit score. Also, can you demonstrate two to three years of steady income from a job or business? Is your current income likely to continue or even increase? And finally, do you have enough money saved for a down payment on the home? Answering yes to all of the above questions is a good indication that you are in a comfortable position to purchase your new home.
Down Payment Costs. There are many factors including the total cost of the new home, what type of mortgage you get, and typical closing costs for home buyers in your market. Generally speaking, you will need enough money in the bank to cover three costs including earnest money which is a good faith deposit made when submitting an offer. Depending on the market, the amount tends to vary but may range from one percent to three percent of the total offer price. If accepted, the money is applied towards your closing costs. If not, the earnest money is returned in full to you.
Additionally, there is a down payment, which is the percentage of the home price that must be paid at closing. The more money put down, the lower your mortgage payments will be each month. Some loans require 10 percent to 20 percent of the total purchase price. But there are some loans like the FHA loan which may only require three percent down or even less.
Finally, closing costs are the fees that must be paid at settlement time. Closing costs include all of the charges associated with the lender, appraisal, survey, inspections, attorney, taxes, title insurance and any other processing expenses. Your lender can provide you with an estimate so that your closing costs don’t take you by surprise.
When looking to buy your first home, look no further than Joseph Bograd for Bucks and Montgomery County real estate in Pennsylvania. Call 267-282-1721 to speak to an agent right away and start the search for the home of your dreams. Joseph Bograd is the ultimate resource for homes for sale in Bucks County and the most reliable and professional realtor of exclusive properties in the Philadelphia area.