9 Questions to ask before buying a home

9 Questions To Ask Before Buying Your First Home

The following article points out several key questions you should ask when buying your first home.

Buying a home is a big decision whether you’re buying a home in Charlotte, NC or a nearby city.  Also consider your general job outlook and stability over the next 5 to 10 years.  And, if you have a partner or spouse, do you both have a back up plan if one or the other of you is out of work for a period of time.  Lots to consider.  But, if you decide to buy – happy house hunting!

While the dream of home ownership may have taken a beating during the recent recession, a majority of Americans still say that buying a house is in their life plan.

And with good reason: home ownership is a key part of many individuals’ long-term financial strategies, plays an important role in improving the health of the economy, and can provide much-needed space for growing families.

But if the recent collapse of the housing market made one thing clear, it’s that home ownership is not for everyone. It’s a significant, long-term commitment that requires strong financial standing and the right timing.

We spoke with Merrill Edge Financial Solutions Advisor Wesley Gunter and Trulia real estate expert MichaelCorbett to get a sense of what first-time home buyers should consider before taking on a mortgage. They recommend that prospective buyers ask themselves the following questions:

1. Why do you want to purchase a home?
2. What can you reasonably afford?
3. Have you factored in all the hidden costs?
4. What kinds of loans do you qualify for?
5. What will your life look like in five years?
6. Are you ready to stay put for the next few years?
7. What kind of neighborhood do you want?
8. Are you working with the right realtor?
9. Is the rest of your financial house in order?

Charlotte Home Interior Trends

Home Interior Trends: 10 Top Looks For 2014

Here are some home interior trends for 2014 from baths to bedroom to kitchens to outdoor spaces.  These trends are important because they seem to be driven by what buyers ‘desire’ in their new home.  So, take a look at the list and add any that you would like to see!

There it stands. The old, dependable night table. The one that supports your bulging lamp, your alarm clock, that pile of books and magazines.

But maybe not for long.

The night table is shrinking. One model, the Diva, is a sleek, pared-down twist on a traditional nightstand. But it has a handy USB port.

“Nobody needs an alarm clock anymore,” says James Nauyok,whose California furniture showroom offers the snazzy new night table. “It’s on your phone.”

And that old pile of books? They’re in your e-reader, he says. How about the lamp? Rooms these days have built-in task lighting.

You get the picture.

1. Baths
2. Bedroom furniture
3. Floors
4. Kitchens
5. Hot colors
6. Upholstery and fabrics
7. Indoor/outdoor furniture
8. Midcentury modern
9. Metallics
10. Heirloom pieces

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Sell Or Stay In Your Home This Spring?

Sure, there are reasons to sell, but also consider the reasons to stay.  This article from MSN Real Estate talks about both sides of an important decision – sell or stay put?

Clearly, the decision to sell can depend on a variety of factors.  Keep in mind, that if you sell your Charlotte home, you’ll likely pay more this year for your next home.  We are seeing high demand this buying season and some neighborhoods in Charlotte are seeing a substantial rise in prices.

Also, you may have tried to sell your home a couple of years and couldn’t get the price you wanted.  Now, it may be a different picture.  There are buyers in the Charlotte market – and in most areas, there are more buyers than homes available!

So, if you decide to sell, think clearly about the ‘right’ price in a more active market.

It’s coming on the spring home selling season, the most active period of the year for single home titles changing hands, and this year the outlook for home-sale growth is up across the board. Single-family homes, townhouses and condominiums are all expected to see stronger sales in 2014.

Many homeowners now have to ask themselves: Sell or keep their homes?

The answer involves everything from downsizing — a huge issue since the recession — to job stability, divorce, age of children and retirement.

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Buying Your First Home? 5 Things To Do Now

Have a plan when buying your first home – that’s the moral of this story – and take all the time ‘you need’!

This article points out several important tips but 1 in particular stands out.  Number 3 says ‘Find a no-pressure agent’.  And I agree 100%.   When an agent has your interest in mind, there will be no ‘pressure’.  As a matter of fact, many times I find myself encouraging home buyers to take their time to make sure they are making an offer on the house they ‘really’ want.

Buyers typically ‘know’ when they’ve found just the right house!

It’s never too soon to start planning ahead if you hope to buy your first home within the next year.

That’s the key message that real estate and mortgage brokers say prospective first-time homebuyers should take away from any preliminary thoughts or discussions about buying.

1. Find out how much you can borrow
2. Decide where you want to live
3. Find a no-pressure agent
4. Tap hidden housing market
5. Research homes online

Get A Home Mortgage

4 Tips to Determine How Much Mortgage You Can Afford

By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.

Homeownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.

Instead of just taking out the biggest mortgage a lender qualifies you to borrow, consider how much you want to pay each month for housing based on your financial and personal goals.

Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?

Still not sure how much you can afford? You can use the same formulas that most lenders use, or try another of these traditional methods for estimating the amount of mortgage you can afford.

1. The general rule of mortgage affordability

As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.

To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in your downpayment

How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home’s cost, you may not have to get private mortgage insurance, which costs hundreds each month. That leaves more money for your mortgage payment.

The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

3. Consider your overall debt

Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn’t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income.

Here’s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don’t top 41%, or $3,416 in our example.

4. Use your rent as a mortgage guide

The tax benefits of homeownership generally allow you to afford a mortgage payment-including taxes and insurance-of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here’s an example. If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.

However, if you’re struggling to keep up with your rent, consider what amount would be comfortable and use that for the calcuation instead.

Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

More from HouseLogic

More on the mortgage interest deduction

More on the tax advantages of homeownership