Buying a house is one of the most expensive deals of your life, and the first time is always a memorable experience. Moreover, the process of home buying can get stressful, but keeping a few tips handy can be great for first-time home buyers.
Read on to know four useful tips before buying your first home.
Plan out a budget and stick to it
First-time home buyers require a lot of research and planning. Budget, the most essential part of the entire process, makes planning even more important. Know what you can afford and how you want to go about with the financing.
Plan and calculate the entire payment, check out online calculators, research about various loans for first-time home buyers, and ensure that you do not miss out on any payment essentials.
Consult an experienced realtor
A realtor can either make or break your deal of buying your first home. An experienced realtor will have contacts of real estate attorneys and loan officers and can also guide you throughout the process of buying the property.
As per the statistics of the National Association of Realtors, nearly 50% buyers found their realtor from a personal referral. So, it is advisable to start asking for references from your family and friends, as recommendations always help.
Moreover, you can always check out real estate websites such as Zillow, Streeteasy, and Trulia, to name a few.
Compare the apartments in the area
Comparison will always help you get a better look at the choices you have. There are numerous real estate websites that can help you research various homes, depending on custom searches such as the location, budget, number of rooms, and property type, among others. By comparing the apartments, you can also read reviews of the location or area to get a better understanding of the neighborhood. Moreover, the comparing will help you sort the budget as well, giving you various alternatives.
List out the non-negotiables
Before you delve going ahead and buying your first home, it is advisable to list down the non-negotiables. One should know and figure out which things would enhance their well-being, and which won’t. So, making a list of things that you would want in your apartment would also help your realtor know about your specific preferences. From square footage to location and amenities, pen down the must-haves in your future home.
One of the best ways of gauging your options is to visit the apartments or houses in your preferred area and shortlist the ones that suit your preferences. Knowing what your preferences are can also help you settle on a budget.
You should also reevaluate your list of essentials and keep adding or subtracting what you would want and what you wouldn’t in your first home.
A reverse mortgage is a type of loan that allows homeowners to receive payments on their house as opposed to them making payments to the lender. At first glance, this option seems too good to be true. But, before committing to it, there are some nitty-gritty details that people must consider when opting for this type of financing. So, here is some information regarding the pros and cons to consider when getting a reverse mortgage.
Advantages
Disadvantages
A reverse mortgage is a loan that allows individuals older than 62 to improve their financial well-being. They can convert part of their home equity into lump sum cash, fixed monthly payments, or line of credit, according to their preference. The money can be used to pay for medical bills, in emergencies, or to pay off a mortgage. Here’s what you should know about reverse mortgages in case you’re looking for one.
How much can you borrow?
For reverse mortgages, the loan amount can’t exceed the value of the property against which it is borrowed. Federal regulations require lenders to ensure that the loan amount doesn’t exceed the value of the house by structuring the transactions accordingly. Additionally, these regulations state that the owner/borrower is not liable to pay off the balance amount in case it exceeds the property value.
How are reverse mortgages paid for?
A reverse mortgage is payable when the borrower sells the house, relocates permanently, or dies. Unlike forward mortgages, reverse mortgages don’t need the borrower to make any monthly payments. They are only liable to pay interest on the money received, which is rolled back into the loan balance. While the owner gets to keep the title to the home, their home equity reduces over the loan tenure.
Who can take a reverse mortgage?
This type of loan is ideal for seniors and retirees whose net worth comes mostly from the value of their home. Seniors who don’t qualify for a home equity loan or can’t refinance due to limited cash flow or poor credit can opt for reverse mortgages. Home Equity Conversion Mortgage (HECM) for purchase is a reverse mortgage that allows seniors to buy another property. That said, it is complex, and you should study the risk factors before getting one.
What are the risks associated with reverse mortgages?
Reverse mortgage scams are not unheard of. Unreputable vendors could offer to help seniors secure reverse mortgages by undertaking house repairs. They don’t provide quality results and get away with the homeowner’s money instead. For spouses living together in a home with only one spouse named as a borrower on a reverse mortgage, the other spouse can lose the home if the borrowing spouse dies first. Besides, reverse mortgage lenders charge fees and closing costs and may also charge mortgage insurance premiums for federally-insured HECMs.