• Thinking about Purchasing a Home?

    February 25, 2016
  • Buying a home for the first time can be one of the most exciting experiences of your life. A home purchase often follows significant life events, such as marriage, birth of a child, or even a new job or promotion! However, the home buying process can be challenging even for the most savvy of buyers. Changing market conditions, fluctuating property values, and various socio-economic factors play a massive role in the purchasing sequence, and it is imperative that prospective buyers make educated and calculated decisions prior to finalizing the purchase. So, without further ado, lets tackle how to start the planning process!

    Analyze Your Life Goals

    This goes without saying, but the reality is that a home purchase is far more complicated than most people expect. Let’s think this through!

    Why are you purchasing the home? Did you need a bigger space for you, your spouse, & your children? Did you get a new job and need to be closer to work? Maybe you just got married and you are looking for a place to settle down with your partner. All of these reasons are great, but each comes with its own implications that need to be considered prior to applying for a mortgage, and especially prior to closing the deal.

    Ask Yourself These Questions

    Once you determine your reasons for moving, it’s time to evaluate a number of financial factors. Answering the below questions will help you prepare for the big decision:

    1.) How much money can I (we) spend monthly/yearly on my (our) mortgage payments and live comfortably at my (our) current income pace?

    Did my new job come with a significant raise? Can we save more?

    2.) How Much Have I Saved?

    Prior to moving, did I take full advantage of my financial options and prepare myself for the "just-in-case" scenarios? If I get hurt or lose my job, do I have funds available or will I have to liquidate assets in order to meet my financial obligations?

    Remember: Once you sign a mortgage, you are bound to the legal ramifications of failure to comply. If you become delinquent or default on your mortgage, consequences may include garnished wages, repossession of your home, and seizure of your assets.

    Be sure to have a free consultation with a NewFED consultant to make sure your key financial metrics are in order.

    3.) What is the property value & yearly tax on the properties I am interested in?

    When purchasing a new home, chances are there will be room for negotiation. Typically, the asking price and closing price will differ. Using a licensed broker or sales agent is important in ensuring that you don’t overspend on the purchase simply to meet an asking price.

    The second major point is identifying the amount of yearly property tax. Some states, charge nearly $12,000/yr in property tax around wealthy areas. That’s a TON of money – Can you afford that? Remember that the tax payments are in addition to your mortgage payments but are usually included in the mortgage payment.

    4.) How will my credit affect my interest rates?

    The positive effect of credit on loan prices and availability is no secret. Good credit entitles you to incentivized interest rates, better loan terms, and higher tier mortgage services. Still, many lenders offer options for lower credit borrowers, but you must be cautious not to take out a loan with onerous terms without familiarizing yourself with each one. NewFED takes pride in not only having many lending options for borrowers of different credit profiles, but also providing the education to manage your finances and real estate transactions.

    The key is to know your score, know what it means, and make sure you speak to a NewFED Mortgage representative if you have any questions about your credit score and how it will affect your purchase

    These are just a few things to consider! Stay tuned for more blog updates to come. We’ll be tackling plenty of issues and giving recommendations to all kinds of buyers. Happy House Hunting!

    Brian D’Amico

    Owner at NewFED Mortgage