Athen Apaquette

This article has been updated on March 17th 2019

Anyone who’s ever purchased a home before will tell you that there are things they wished they had known before making such a big decision, things that would have saved them time, money, and a lot of heartache.

In this article, I outline the 10 crucial things that every homebuyer should know.

1. What payment you can afford? An obvious question, but it’s one that’s often overlooked by new homebuyers.Banks will give you their “number,” but the real issue is what can you afford and still maintain the same lifestyle, or are you willing to cut back? Do you plan to take off work in the near future to grow your family, write a book, take an extended leave for travel, etc.? If you do, then you will have to plan the mortgage to integrate your plans into your other financial goals.

2. What is the true tax benefit of buying a home? Many homeowners believe that the tax write offs of homeownership will help to offset the cost of the home.  According to Interest.com, “Studies show you’re most likely to benefit from the deduction if your household income is more than $100,000 a year or if you live in an area with higher housing costs, such as the West or East coasts or a major city.” (citation).

If you’re not sure whether you should rent or buy, try using my calculator to help you crunch the numbers: https://athenapaquette.com/calculators/rent-vs-buy/

3. What is the true cost of homeownership? Have you considered that the utilities are “all on you” when you own a home? You might have had free utilities at your apartment and haven’t considered water, gas, and electric bills. The house will also require maintenance over the years such as roof repair/replacement, repainting, gardening, plumbing repairs, and other maintenance items. Do you plan to have cash reserves for that, or just handle it when it comes up (i.e. credit card financing)?

4. If this is your first home, do you plan to buy another or is this something you could live in forever? What are your plans? Do want to have a family, become self-employed and work out of home, or move to another area in retirement?

5. Closing costs when buying a home. Did you know that besides your down payment you could need up to 2% or more of the price of the home in closing costs? In a seller’s market, it’s tricky to ask the seller for help with closing costs since most of them will want the cleanest, easiest buyer who will give the highest bottom line profit.

6. Did you know that FHA has no credit score limit? Even if you have a low credit score (below 660) and have been turned down by the banks, you can still get a loan? This is great news if you’re ready to buy a home but have had some credit mishaps in the past.

7. Did you know that you only need to be on the job for 6 months to get a loan to buy a home? Most banks will stay on the strict 2 year rule, but we can help you find the right financing. If you just graduated from a professional program or upper level degree and immediately get a job, the requirement is waived since school can be counted as the work history.

In general, however, there cannot be a gap of more than 1 month in your school history. A diploma and first paycheck on the new job will be required before loan approval is issued.

8. Did you know that going to the listing agent DOES NOT always get you the best price? Having your own realtor is free to you and could get you a lower price than if you had gone directly to the seller’s agent (they guy with the sign in the yard). For more on the difference between Realtors and Real Estate Agents click here. https://athenapaquette.com/difference-realtor-real-estate-agent/

9. You could use a co-signer to qualify for a more expensive home. Certain loan programs allow you to have a co-signer such as your parents or a sibling to increase your chances of qualifying. However, they must provide the same full documentation, and will be responsible for the mortgage if you fail to pay. FHA allows this, and Freddie Mac allows for a co-signer. It’s called “blending of ratios.”

10. Be leery of the rates posted in the newspaper or online. They may be 3-4 days old. If you want the latest rates or to start the pre-qualification process then contact me directly at 310-218-6855 or email me at Athena@AthenaPaquette.com