First-Time Homebuyer Q&A: Part 2

By Heather Faucher | Posted on June 30, 2009 | Filed Under Real Estate 

Check out Part 1 of this semi-regular series.

4. WHAT DOES THE LENDER DO TO CALCULATE THE AMOUNT OF MORTGAGE I CAN AFFORD?

The biggest factor lenders consider is the debt-to-income ratio, which is a comparison of a potential homebuyer’s gross (pre-tax) income to housing and non-housing expenses. Examples of non-housing expenses include long-term debts like car or student loan payments, alimony, and child support. The Federal Housing Administration (FHA) recommends that monthly mortgage payments should not exceed 29% of gross income. Additionally, the mortgage payments combined with non-housing expenses should not exceed 41% of income. One other factor lenders look at is any available cash for down payment and closing costs, along with credit history, when factoring in what a potential homebuyer’s maximum mortgage amount should be.

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First-Time Homebuyer Q&A: Part 1

By Heather Faucher | Posted on June 25, 2009 | Filed Under Real Estate 

Many first-time homebuyers know next to nothing about the whole process, and often have a ton of questions they need to find answers to.  While finding a reputable real estate agent or experienced real estate attorney can be one way to find the answers to those questions, this series of posts is going to attempt to answer some of the burning questions first-time homebuyers have as they start the process.

1. HOW DO I KNOW IF I’M READY TO BUY A HOME?

The following checklist is a great one to use to honestly assess your readiness:

–Have I had a steady source of income for 2-3 years?  Is that current income reliable?
–Do I have a solid track record of paying my bills in a timely manner?
–Do I have a limited amount of long-term debts, like car payments?
–Do I have money saved for a down payment?
–Can I truly afford a mortgage payment every month, plus any additional costs such as insurance?

If you answered yes to most of these questions, you are likely ready to at least consider purchasing your own home.  And if you answered yes to ALL of them, chances are it’s the right time to start researching and house hunting!

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One Person’s Real Estate Trash is Another’s Treasure…

By Heather Faucher | Posted on June 16, 2009 | Filed Under Real Estate 

They say art is subjective, and that one person’s trash is another’s treasure. The same holds true in real estate, an industry that is very much concerned with appearances thanks to that holy grail known as “property value.” In other words, is that dump my neighbor calls his castle going to affect my resale value down the road? The answer is–it depends.

Some people love the unique or quirky. Others absolutely hate them. Strange and unusual properties can be found all across the globe, from the Toilet house in South Korea, to the guitar-shaped home in Fayetteville, Georgia, or even the house in England with the astoundingly accurate replica of the Starship Enterprise as its interior. Neighbors either love or loathe peculiarities like these, and tourists often flock by the busloads to photograph them. But is someone else going to want to buy such a taste-specific customization on down the road? Or, alternatively, are others going to want to pay to live next to that oddity?

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Location! Location! Location! The Exodus from the ‘Burbs to Downtown

By Heather Faucher | Posted on May 21, 2009 | Filed Under Real Estate 

Real estate agents have been chanting the “Location!  Location!  Location!” mantra for decades.  The difference in price between a house outside a real estate hotspot and a similar house inside the “zone” can be staggering.  And those who want to live in prime locations will pay top dollar to do so.  For a long, long time, the ‘burbs have been King when it comes to market growth as millions of people flocked from the overcrowded Big City to the suburban good life.  But now, most market and demographic indicators suggest that many Americans are moving away from the suburban and exurban areas and moving toward cities and close-in suburbs.  What’s behind this surge? Read more

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