Things You Should Know When BUYING A Home (New Braunfels, TX)

Things You Should Know When BUYING A Home

Things You Should Know When BUYING A Home You have decided to move or buy a new house for your growing family. Then comes a lot of questions and processes that need to be answered and done to get that property you ve been dreaming of. Don t jump too fast Take the time to check these things that you should know when buying a home. The buying process can be stressful. For easier process for less stress and to save your precious time just give The Loding Group a call at 830-481-7580 and we ll be happy to assist you. Know What You Can Afford The hardest part of the home-buying process is figuring out what is affordable how much the bank is willing to lend or what numbers the mortgage calculator shows. It is not that easy. Here are some ways to know how much you can afford How much can you pay each month - Decide on how much you can spend on a mortgage payment each month. Your mortgage payment should be between 25 and 30 percent of your income. To determine what you can afford sum up all of your monthly bills and expenses. Don t forget to get estimates on how much the utilities will cost in the new home and other costs of living changes. This depends on the size of the house and the area where it is located. How much can you give for the downpayment - Determine how much you can put down on a home. Don t put everything on the downpayment. Make sure to set aside some money for appraisals inspections closing costs and moving expenses. Usually it is easier to transact with banks and other lenders if you can do 20 percent down payment. You can also buy a home with little or no downpayment but the interest rates can be a little higher plus you will have to pay private mortgage insurance. Interests - Higher interest rate can add a large amount to your monthly payment and end up costing thousands of dollars more. Lower your interest rates by getting a copy of your credit report and make a move to remove any negative marks on the report to improve your credit score. Search for mortgage products that allow you to buy discount points. Discount points usually lower the interest rate by 0.125 percent. Taxes - Visit the county auditor or tax department s website and do a property search to know the property tax rates. If you don t have a house in prospect yet call the tax department and ask about the tax rates. Insurance - It is more advisable to ask family and friends what they pay for homeowner s insurance. If you don t know anyone in the area you are shopping simply talk to your realtor. A realtor s referral will show insurance agents that you are serious about buying a home and they will be more likely to spend time answering your questions. Set a price range that you can afford based on the above-listed factors. You are now ready to start touring homes in your price range while shopping around for the best mortgage deals. What is Private Mortgage Insurance (PMI) Private Mortgage Insurance (PMI) is what lenders use to protect themselves against loss from risky borrowers. In most lenders if you pay a downpayment of less than 20 percent you will have to pay Private Mortgage Insurance every month as a part of your mortgage payment. This allows borrowers to make as low as 3% to 19.99 % downpayment As your down payment decreases PMI rates increase. Do some research and inquiry to as many lenders as you can to learn what rates to expect. Ask how long you will need to pay the private mortgage insurance. Some loans will require you to pay PMI for the life of the loan. Some will allow you to cancel PMI after you have paid enough towards the principal balance. In most cases the lender will not automatically cancel PMI until you have reached 22% equity based on the original appraised value of the home but you can also request cancellation at 20% of the current market value. Example if you own a home worth 200 000 and have paid down 40 000 in principal you can request to cancel your PMI. Lenders may also allow you to pay your PMI on a lump sum basis either in cash at closing or finance the premium in your loan amount. What are Closing Costs Closing costs are the fees charged by mortgage lenders and third parties related to the purchase of your home. They include a fee for checking your credit report loan origination fee government recording charges appraisal fee title service fee and title insurance. Some buyers are able to negotiate with the seller for a contribution toward these costs otherwise expect to pay between 2 and 5 percent of the purchase price in closing costs. According to a recent survey on average buyers pay around 3 700. Know What s Included When You Buy A House Yes disputes between buyers and sellers happen when the buyer falls in love with the house because of what is inside. It can be the floor coverings the window dressings the appliances the hardware or the furniture. During the tour they were there but when the new homeowner moved they re gone. Anything that is bolted nailed wired cemented or permanently glued to the property becomes a fixture and are always included in the sale. Anything that can be removed without causing any damage to the property like some of the appliances and furniture is considered personal property. The seller can bring the personal property when he she moves but the seller can also leave it for free. You won t believe it but even window coverings cause an issue to some sellers and buyers. Drapes can easily be unhooked so clearly it is personal property. For the drapery rods and cornices which are bolted to the wall they must be left. Or else when removed they might cause some damages. Same thing with shutters and shades that are attached to the window should be left. That rug lying on the floor which has interesting colors is obviously the seller s personal property because it is not attached to the floor. The wall-to-wall carpet which is nailed or tacked on the other hand is part of the sale. Tiles glued to the floor also becomes a fixture. What about hardware in the house Doorknobs letter boxes light switches kitchen and bathroom fittings are all included in the sale and should not be moving with the seller. There is an exception though. Hardware or fixtures used in a business are entitled to be taken by the seller when moving. Examples are kitchen equipment office equipment and business signages. In short there are lists of properties inside the house which are obviously moving with the seller and things wich are obviously included in the sale. Anything that is already part of the house meaning if removed will cause damage to the property or the house are included in the sale. Otherwise it is the seller s property. But there are exceptions which you should make sure to be in writing. The only safe course of action is to write in the sale contract whether specific this or that goes with the seller or stays for the new owner. DO NOT ASSUME that anything you see on the property comes with the house. Ask about the items you want to keep or remove and make sure to include it in your agreement into the contract. Buying a house can be stressful. Sometimes even if you are just looking or searching homes for sale can be tiring too. The process the papers the time etc. All these can be saved. Let us help you in getting that new home of yours. It is not that stressful at all. Just give The Loding Group a call at 830-481-7580 and let us handle all those works.