Are you planning on a new home purchase this year? Many folks in Michigan move during the summer months to take advantage of school vacations, but now is the time to start your planning and research – especially if you’ve never owned a home before. Here are some tips:
First, review your budget carefully to determine how much home you can afford. Figure all monthly cost such as mortgage payments, taxes, insurance and utilities. Consider yearly maintenance and upkeep costs. Come of these may be offset by the mortgage tax deduction. A real estate company or Realtor® can help you figure out the maximum loan amount for which you can qualify, based on your incomes and any outstanding debts. Check out their BBB report on our web site at www.BBB.org.
Prepare a checklist of what you’re looking for in a house, including its location. Is it important to be close to schools and shopping? Ask about local zoning and any restrictions on use of the property. Take your time and learn the market prices in your preferred neighborhoods. The Internet can be a big help in viewing available homes.
Shop around for the best deal on a mortgage as well. Check with various lenders like banks, credit unions, and mortgage companies. Know the difference between fixed rate (FRMs) and adjustable rate mortgages (ARMs). Fixed rate mortgages can be 10, 15, 20 or more years depending on your preferences. ARMs have lower initial payments, but these may increase over the years if interest rate start to rise again. Don’t forget about closing costs, including points, real estate taxes, insurance, title and inspection fees. Some can be merged into the mortgage loan to reduce your out-of-pocket costs. Some are also deductible – ask your tax advisor.
When negotiating any important contacts like a home purchase, we suggest consulting a lawyer. The contract should include all of the terms and conditions of your purchase. Also secure an inspection report by your own inspector. If the seller agrees to pay closing costs – or makes any other promises – be sure they are in the contract! Verbal agreements don’t exist in real estate. Also know if your real estate agent works for that seller of for you, the buyer.
If your have a problem that you can’t resolve yourself, perhaps we can help. Fill out the BBB complaint form at www.BBB.org and we will help you settle the issue.