Where do we begin? Buying a home related...

My boyfriend and I are thinking about buying a home eventually together, and while the market seems to be at a good place right now we wanted to see what we could do or if we could even afford a home. We definitely want to be engaged or married before making this big move...but prior we want to see if we could even do this....afford it. Where do we begin? As new homeowners, what are our options? What advice can you give? What do we look for? If we go to a real estate agent to just talk to them, is this a helpful option for us? Help....LOL....thanks for your help

Re: Where do we begin? Buying a home related...

First off you need to figure out what you would be able to put down as a down payment and what you would be able to afford as a mortgage. On top of your mortgage you have to figure out utilities, cable, groceries, etc. If you have a downpayment, go to a mortgage company to find out what they would give you as a loan. From there you'd know what house you can afford. So if a mortgage company says they will give you a $500,000 loan, which could be $5k a month, and you can swing that, then that's what you know you can look at.

Re: Where do we begin? Buying a home related...

Re: Where do we begin? Buying a home related...

Nowadays a agent will not even take you out unless you are pre approved. Although you may be approved for 600K does not mean you should be looking at 600K homes. Worse thing ever is to be house broke. I know one of the biggest "changes" from going to apt. living to house ownership was all the "misc" bills that constantly pop up. We need a lawn mower? a snow blower? a landscapper? our boiler broke? we have to PAY for water?!??! I can continue for days.

When you find a home you are interested in I would def reccommend getting the utility bills from the present homeower.

Remember its not just the mortgage, its the taxes, insurance, incidentals etc. And lets not forget, if your buying a fixer upper, you need $ set aside to make improvements. Set a budget you KNOW you can afford, not just for now but for 30 years !

Oh, and before you go looking, try narrowing down the towns you want to look in. LI is HUGE !!

I just bought a home, and there is a lot of joy in ownership, but its a PIA too!!! Good luck with house hunting and fm if I can help at all.

Re: Where do we begin? Buying a home related...

Re: Where do we begin? Buying a home related...

Step 1. Set up a budet spreadsheet
- write down income (gross vs. take home - I would even factor take home by month & week also)
- write down all your current assets and debts (car loans, student loans, mortgages, credit cards, etc)
- write out your monthly expenses (rent, insurance, car payments, credit card debt, utilities, cell phones, etc, etc)
- Figure out what you take in per month and what goes out per month.

Step 2. Once you have a good understanding of your monthly money flow, go speak to a mortgage broker. Let them run a credit check and get a pre-approval for a mortgage. A good mortgage broker will be willing to look at your budget sheet and give you some advice about what you are able to really afford monthly. Make sure they go over mortgage, taxes, PMI (if you are under 20%), different interest rate scenerios

You really need to be aware of what you can afford --- many banks, even today are willing to give you more mortgage than you probably should ever have. So you need to be aware of that and understand if you can afford $1000 per month or $4000 per month, KWIM?


HTH's!

Re: Where do we begin? Buying a home related...

Once you figure out what kind of mortgage payment you are comfortable with, I suggest putting that money aside each month starting now to see if you can swing it.

While DH and I were saving for a house...we came up with a number (estimated mortgage payment + utilities) and after subtracting out our rent..the balance went into savings each month. This was also very helpful in saving up for our down payment. Then when we went house hunting we stuck to that number and wouldn't look at homes above our price range.

Good Luck!

Re: Where do we begin? Buying a home related...

Re: Where do we begin? Buying a home related...

Re: Where do we begin? Buying a home related...

Thank you so much for all of your responses...this has helped a great deal so far.....now with mortgage rates dropping, that is even better......

Re: Where do we begin? Buying a home related...

You may want to check out Long Island Housing Partnership. I can't recommend them enough! They are not for profit and really helpful. We haven't bought a home yet but it really helped us hone our budget. They pick up where YOUR budget planning leaves off with more information like specific local average rates for a lawyer, etc. and all of the details of closing costs that you may not be budgeting correctly (or if you were like us, you may not even be aware of them yet )



btw, everyone's ideas about budgeting are great! We're "practicing" by saving our mortgage payments right now. Good luck!


LIHP

Message edited 3/19/2009 9:16:46 PM.