Buying Guide
Owning your own home is
the American Dream.
The dream can still be yours!.
The buying process involves common stages for all
home buyers. To help you understand the process, and make the most of
every day and dollar you spend, I have prepared this Home Buyers Guide
which provides a general overview from planning to closing. Call me
for an appointment to learn about the buying process in more depth.
After all, helping you fulfill your home ownership dream is my business.
In today's market an "affordable" home
is not so much determined by the sales price as it is by the financing
which translates that price into a monthly payment. A home buyer's first
step is to set a housing budget, then go shopping for the house that
fits their budget.
Even though there are many ways to qualify
to buy a home, make sure the monthly payment makes sense for you.
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The key items are the size of the down
payment, the interest rate, the APR and the amount of the mortgage.
Loan programs vary greatly depending on your needs, preferences and
ability.
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The obvious source of money for your down payment is either your savings
or the proceeds from the sale of a home you already own. But there are
some other not so obvious sources. In recent years, for example, "parent
power" has taken some new twists for first-time buyers.
Home Equity Loan
Parents often have considerable equity built up in their own homes-and
many are tapping that asset through home equity loans to make a gift
to help their children become home owners. Ask your lender and a tax
advisor for current information. Often lenders will require a "gift
letter" to verify that parents don't expect repayment.
Stocks and Bonds
If you feel the market doesn't favor selling your stocks or bonds now,
you may be able to secure a bank loan using your portfolio as security.
Otherwise - selling stocks or bonds for a down payment makes sense.
The interest you pay for your mortgage is tax deductible. You can actually
live in your investment!
Company Profit Sharing or Savings
Plan
Look into the possibility of withdrawing what you have in your profit
sharing or savings plan account or borrowing against it, if your company
has these programs.
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Putting down more cash or using an
adjustable rate mortgage can reduce your monthly payments. Check with
your lender for the plan that works best for you.
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The larger the down payment, the less
money you need to borrow, which means a lower monthly payment. However,
remember that in addition to your down payment and monthly payments,
you will need money to pay for closing costs, moving, household setup,
a reserve for family emergencies and other miscellaneous items. So don't
plan to put your last penny down on the closing table
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Traditionally, lenders figure that
the home buyer shouldn't pay more than 28-38 percent of gross income
for P.I.T.I. payments, or 36-38 percent for both P.I.T.I. and monthly
debts combined. This might be a little more or a little less depending
on other outstanding long term debts (more than 10 months), alimony/child
support payments, number of children and their ages, and other household
budget items. There are many different types of loan programs tailored
to help you enjoy your home and not stress out over the payments. Check
with your lender for details.
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Some mortgages,
such as graduated payment mortgages, flexible payment mortgages and
deferred interest loans, feature monthly payments that start lower than
usual in the early years--and thus help home buyers "afford" more house
and buy sooner by qualifying on a lower mortgage payment. Double-check
that you are fully informed about the monthly payment for your loan.
A Long & Foster Prestige Partner
is Prosperity Mortgage. Prosperity is associated with Wells Fargo -
the only AAA rated lender in the US by both Moody's and Standard &
Poor's. Click on the link below to reach Karen or Chad. You can apply
online or get in touch by phone or email. They can answer all your mortgage
questions.
CLICK
HERE FOR PROSPERITY MORTGAGE!
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Contact
Information:
Howard Lerner, Associate
Broker, REALTOR® DC MD VA
Long & Foster Real Estate, Inc.
Bethesda Avenue Office
4733 Bethesda Avenue
Bethesda, MD 20814
240.497.1700 Main Office
240.497.4061 Voice Mail
301.775-6869 Cell
howard@longandfoster.com
Please Note: Email is not perfect. If you do not receive a reply within 24 hours - please call me!!
