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Buying a home is a dream that most Long
Islanders covet. But there is a long "to do" list before
you can get that deed and move in, so the Long Island Press has
compiled the following tips to make it a bit easier for you. Of
course, we can't cosign your mortgage, but we can get you started.
Is Homeownership Right for You?
There are many things to consider when purchasing a home:
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How long do you plan on living in
the home? If the circumstances of your job require you to
relocate often, it may cost you money to resell the house
if it does not appreciate in value immediately. The amount
of time it takes for the house to appreciate in value depends
on the economic forecast; most areas in the country have an
appreciation rate of 5 percent per year. If you don't anticipate
staying in a house for at least four years, you may want to
reconsider the time-consuming investment of purchasing a home.
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For how long will the home meet your needs?
As a potential buyer, you should assess the home to be sure
it will satisfy your changing needs. Will the home accommodate
children in the future? Are there enough rooms to add a den
or game room?
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Your financial condition-how financially
viable are you? A first time homebuyer must consider their
financial history. Is your credit report blemished? Will your
lender be able to give you a low interest rate? Are you in
a position where you can expect to make more money? Familiarize
yourself with borrowing rates and policies. Forecast your
earnings with a home affordability calculator so you can make
an educated decision about how much you can safely borrow.
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How will you fund your purchase? Buying
a home often requires a large amount of money for a down payment
and closing costs. Although having money saved is a good plan
it is not the only option. If you can prove you are a good
financial risk your lender will be inclined to work around
your financial situation.
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Be aware of the ongoing costs of home ownership.
Unfortunately the buck doesn't stop once you've purchased
your home; maintenance, improvements, taxes and insurance
on top of your mortgage payment add up to a weighty monthly
payment. If you buy a condominium or co-op there may be additional
fees, such as maintenance, as well.
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Pros and Cons of Buying a Home
There are pros and cons involved when making any big decision, buying
a home is no different. Here are some factors to consider:
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It's the ultimate American Dream |
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It's the best investment |
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If you have a down payment already |
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If the location is exactly where you want
to settle down |
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No more wasting money on rent |
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No landlords |
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You have a place to call your own |
| Cons |
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Saving for a down payment is difficult |
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If your career requires regular relocation |
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You're unsure about the location you desire
to settle in |
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You prefer to invest money in stocks |
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Don't want to commit |
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Don't think you can afford it |
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Believe that the benefits of renting far
outweigh the hassles of owning |
Getting Ready to Buy a Home
When preparing to apply for a mortgage, make sure you have the following
documents in order:
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Proof of Income: Be
prepared to show proof of you earnings, such as original pay
stubs for the last 30 days. |
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Copy of homeowners
insurance: You want to show that you will have adequate coverage
on the property. |
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Copies of your W2
forms: Each applicant should have their most recent W2. The
lender needs this to verify employment and income history. |
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Copies of asset information:
You will need to provide statements for your savings, checking
and 401K accounts, as well as investment records for any mutual
funds or stocks. The lender will require a comprehensive record
of all your finances. |
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Copy of title insurance:
The title insurance will aid the lender in the legal description
of the property, the taxes and the names on the title. |
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