You’ve Decided to Buy a Home

Great decision, but is it informed? There is much more to buying and owning a home than a simple ‘it’s time to buy’ decision – that is unless you happen to have so much disposable income that you don’t need to even think about the financial obligations. Do you?

Let’s break this down into manageable sections, Financial, and Labor. If you’ve been renting, you know about financial obligation concerning making monthly rent payments, your utilities bills etc. You probably haven’t had much hands on experience in the labor department though, and it is a large part of owning your own home.

Financial – a list of miscellaneous expenses associated with owning and maintaining your home:

  • Mortgage – Principal and Interest (PI) Usually quite a bit more that your rent payment, this is only a portion of your total mortgage the rest is taxes and insurance, combined it is known as PITI.
  • Property taxes
  • Homeowners Insurance
  • Utilities, including electric, gas (oil, coal, wood), water, sewer, refuge pickup, telephone – these are just the necessities.
  • Additional Utilities – cable TV, Internet connection, security service, and such possibilities as landscaping, pool cleaning the list goes on and on.
  • General Maintenance and upkeep, including painting, replacing worn out fixtures, etc.
  • Tools needed to maintain home – tool kit including, hammer, screwdrivers, pliers. Garden tools – lawn mower, edger, trimmer, ladder. Just to name a few.
  • Repairs – differs from general maintenance and upkeep, this is when the dishwasher, or the hot water heater actually stop working, usually causing considerable mess in the process. Or broken windows, damage from natural phenomenon such as earthquakes and floods.
  • Home improvement – adding that extra bath, or the pool you’ve always dreamed of are often quite a drain on your bottom line.

This is the perfect time to set up a budget!

Labor – The hands on manual portion of buying your home and maintaining it afterward.

  • Yard maintenance, including mowing, gardening, pruning trees and bushes, weed removal, leaf removal, and snow removal, etc.
  • Exterior maintenance, including, painting and associated preparation for painting, cleaning gutters, cleaning and maintaining decks and walk ways, fence repair, cleaning siding, moss and mold removal, weather proofing, etc.
  • Interior maintenance, general cleaning (it will probably be larger than your apartment), replacement/repair of leaking faucets, windows, doors, carpet and floor cleaning and care. Painting, replacement of electrical fixtures, sockets and switches, up keep on heating and cooling system, including filter changes, duct cleaning and insulating.
  • Unexpected repairs, including water damage, appliance replacement, fire or smoke damage, weather damage, even the fist through the wall needs to be repaired (most likely the fist and the wall)

The task is not as daunting as it seems, and is in fact very rewarding. Now you have the information, and the resources to make an informed decision to buy a home.

How to get a good mortgage refinance deal?

If you opt for mortgage refinance, it is undoubtedly a good way of keeping foreclosure at bay but you need to strike the right kind of deal for the same. There are many mortgage lenders in the mortgage industry and not all are dependable. One of the main factors that will decide the success of your mortgage refinance is the lender you choose. Following Obama’s Mortgage Bailout Plan, many lenders have become flexible and can work out ways to help you in saving your dream home.

There are many factors that should be taken into account if you are planning a mortgage refinance in addition to choosing the right lender. Given below are few aspects that need to be considered prior to taking the plunge –

Identify the purpose of refinancing

There are many reasons why homeowners opt for mortgage refinance. Some of the common reasons are as follows –

* Better rate of interest

When you opt for mortgage refinance, it is usually done so that you enjoy better mortgage rates that make your mortgage payments affordable and allow you to stay regular with your payments throughout the term of the loan.

* Switching from ARM to FRM

ARM or adjustable-rate mortgages are good as long as the rates are low. However, if the mortgage rates increase, you will have to pay higher each month. So, to do away with uncertainties in your monthly mortgage payments, many homeowners switch over from ARM to FRM so that the payments are predictable and fixed. This is usually done through mortgage refinancing.

* Shorten the term of the loan

If the original loan term was 20 years and you want to wrap up your mortgage payments earlier, you can refinance to shorten the length of the loan. In this way you will also be building equity in your property.

* You need extra cash to fulfill your financial obligations

Many homeowners opt for mortgage refinance so that they can get access to some extra cash that will enable them to meet their other financial obligations. This may include making payments for your credit card bills etc. This is possible if you have enough equity in your home. This is referred to as Cash-out refinancing.

So, it is important to identify why you need to refinance your mortgage. Next is to shop around for a good lender. This is equally important. These days you may come across lenders that waive off closing costs and points etc. However, if the lender waives off these expenses, make sure they don’t compensate in form of higher mortgage rates. So, you will have to be very careful before you finally settle for a mortgage refinance deal. Unless your objective of availing mortgage refinancing is clear you will not be able to convey the same to your lender.

You can shop around for the right mortgage lender online. This becomes easier as you will be in a position to shop around for better rates as you will get the opportunity to compare rates offered by different lenders.