The New York Times has published a great article for first time homebuyers.
Purchasing your first home is both an exciting and daunting experience for many.
Across the nation as in the areas around Malibu there have been a rise in the number of first time homebuyers thanks in part to the $8,000 tax credit as well as the more affordable prices and low fixed rate mortgages options available.
In short the 7 suggestions/rules are:
1. THE BASICS – Put 20% down or as much as possible – not only will this protect you from market price fluctuations but it will also mean that you will have a smaller mortgage than expected meaning a lower payment – and you may not need mortgage insurance. beacuse of it. Get a fixed rate loan and do not spend more than 35% of your monthly income on the house payment.
2. INCOME/FINANCES - Those first time home buyers in their 20′s and 30′s will see their incomes rise much faster than those older buyers. Therefore they can make relatively accurate income predictions.
3. THE UNKNOWN – Plan for the unexpected! Think, could you manage this mortgage and house if you had a baby and took time off work or if you are a couple, surviving on one income only. Think about potential long term unemployment or a change in careers later in life.
4. RUNNING A HOME - Often buyers play down the level of expense needed to keep a home, however in reality most homeowners pay 3.6% of the original purchase price annually for maintenance and 4.5% if it’s an older home.
5. DREAM HOME Vs. STARTER HOME - It has been suggested that buyers should buy what they want (that elusive dream home) or a lower priced starter home and that the middle ground should be avoided. If you can’t afford the dream home just yet then it is suggested to wait a little longer until you can.
6. TIME IN THE HOUSE – Constantly moving incurs transactional expense, staying in the home you buy longer than you usually would is a great tip.
7. “THE 8 HR RULE” – If you think you will lose sleep over a big mortgage then reconsider and adjust your expectations and budget accordingly.
If you are interested in purchasing a property or selling a property in Malibu, Pacific Palisades or the surrounding Beverly Hills/southern California area then please contact Judy Kunisaki for professional real estate advice in the Westside Los Angeles area, on 310-317-8396 or via her online contact form on her website.
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Judy Kunisaki – CA DRE license 00963582
