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First Time Home Buyers

by Joe Klarman

Buying a home can be so nerve-wracking that a first timer might be tempted to give up and go back to renting. The learning curve is indeed very steep, but you can resolve most of the issues before they occur with a little preparation. Here are some tips to make your life easier as you go through the process of buying your first home:

  • Pay down Your Debt

    Get your old debt paid down before applying for a mortgage. This means any credit card or student loan debt. If you neglect this, you may not get your loan or you may get less than optimal terms. In many cases, the bulk of a first time homebuyer's debt is in the form of student loans. Be careful about making your payments on time or you may find yourself with a poor credit score and be unable to qualify for a home loan.

  • Build up Your Savings

    Do what you have to in order to save money. Consider steps such as moving back in with your parents or not taking vacations. As a first time homebuyer, you will need to embrace frugality in order to own a home.

  • Establish a Budget and Stick to It

    The first step is to determine the kind of home that you can really afford. The general rule is to opt for a home that costs about two and a half times your annual wages. Next, you will want to factor in all of your expenses. Keep your monthly bills in mind. For example, you will want to know how much you will be spending on utilities in your new home. Note that there will be maintenance expenses as it is only a matter of time before you will need to cover a costly repair or replacement. Once you think you have a budget, use it to practice. Before you get your mortgage, deposit payments into a savings account and leave the money there. This will give you an idea of whether you can really afford your mortgage or not.

  • Consider the Length of Your Home Loan

    Why is the length of your mortgage term important? Consider the fact that a 15-year mortgage will take half the time to pay off when compared to a 30-year mortgage loan. Also, remember that the monthly payments will be significantly more. They will not be double the amount of the 30-year ones since you will be paying less interest over a shorter period, but they will still be a lot higher.

  • Gather your Paperwork

    Lenders will likely want your wage and tax statements (your W2s) for the last two years. They will want yours and those of your spouse as well. Also, they will want to see federal tax returns for the last two years as well as two or three months worth of bank statements. If you own stocks, bonds or mutual funds, they will want to see asset statements. You will  need to provide a copy of your current driver's license along with everything else. Note that some lenders will request a credit report fee.

  • Think About Where You Want to Live

    Avoid casting too wide a net when considering places to live. Having too many options may make the decision difficult. Focus on a specific area. You should drive through your prospective neighborhood to get a feel for it before deciding on a property.

Final Walk Through Tips

by Joe Klarman

One of the most important steps in the home buying process is the final walkthrough. Many homebuyers don't pay enough attention to the final walkthrough because they are too excited about finally closing on a house especially if it's taken a while to find the right house for them. However, this is your chance to make sure that everything about the house is as it's supposed to be as it was agreed upon with the seller. You don't want to sign your name on the dotted line only to find that there are serious issues that have developed since the home inspection was done that are going to cost you an arm and a leg to fix. The following are some tips to help you do your final walkthrough:

When to Schedule the Final Walkthrough

Typically, you'll want to schedule your final walkthrough a day before the closing. This way, you reduce the odds of anything happening to the property between when the walkthrough occurs and when the closing occurs. However, it's often suggested that you do two walkthroughs. One should be done a week prior to the closing. This gives you time to find any problems and speak to the seller about them. The seller will then have some time to fix the problems, thereby not delaying the scheduled closing date. You'll then do the final walkthrough the day before the closing to see if those issues were fixed.

The Agreement

First of all, you should look for everything that you and the seller spoke about and agreed upon. You'll need to bring your contract, home inspection report and the disclosure form of the seller's property condition in order to make sure everything checks out as it is officially written. You'll also want to keep any verbal agreements in mind when doing the walkthrough. For example, if the seller told you that they would leave certain window treatments or light fixtures, such as a chandelier, then you'll want to make sure these items are present. Also be sure to note items that you don't want. Some sellers will leave things they don't want and hope that you'll just deal with them, or they'll simply forge them, whether it's a bookcase or cans of paint. It's the seller's responsibility to remove these things, so take note of them.

What to Look For

The following are some of the things that you should look for when going through the house and around the property:

 

  • Turn on all the lights in every room to make sure they work.
  • Check all of the appliances to ensure that they are functioning properly.
  • Turn on the heat and air conditioning to make sure they work.
  • Inspect the doors and windows to ensure they operate properly and aren't damaged.
  • Turn on all the faucets and make sure that there are no water leaks.
  • Flush all the toilets to ensure they operate properly.
  • Visually inspect the walls, floors and ceilings for potential damage or issues.
  • Turn on all the exhaust fans to make sure they are in working condition.
  • Check to see if the agreed upon repairs have been made.
  • Test the garage doors.
  • Do a visual inspection of the home's exterior. Make sure the siding is in good condition and that the roof isn't missing shingles especially if it's stormed recently.

If you do find any problems in the house, whether they are repairs that haven't been made or new issues that have popped up, have your agent speak with the seller's agent about a solution before the scheduled closing date.

 

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Russell Jones Real Estate
536 Broadway East
Seattle WA 98102
Office: (206)323-0800
Direct: (206)683-5639
Fax: (206)323-9275