If you’re in the market for your first home, congratulations! Buying a new home can be an exciting experience that leads to years of enjoyment. In order to get the most out of buying your first home, here are a few tips. Know the numbers
It quickly becomes clear to a person who wants to buy a home in Silicon Valley that not all homes are created equal – nor are they priced equal. Each city and the diverse neighborhoods within the cities offer a wide range of home types and price ranges. Step one is to determine how much you can spend on your new home.
You can use Bankrate’s handy mortgage calculator as a starting point. This will tell you what your payment would be on homes with different sale prices. The next step is to find out how much you can afford to spend on a home. MSN’s Home Affordability Calculator will help with this. You’ll discover what your total monthly housing cost would be including taxes and homeowners insurance based on the mortgage(s) you’re considering.
Know the lay of the land
Understanding the different neighborhoods in Silicon Valley is very important. Just because we lump the region into one name – Silicon Valley – that doesn’t mean there isn’t plenty of lifestyle difference from city to city. A good Realtor who is intimately familiar with the valley can be a great help in pinpointing the right location for you.
For example, you may do some initial searches and turn up a variety of Silicon Valley homes within your price range – let’s say $1.75 million. One look at your search results will show that there are homes in that price range in multiple cities, each of which will provide you with a unique experience and lifestyle. A Realtor can take your needs, goals and desires and narrow down your home choices to ones that will be truly best for you.
A Realtor can help you determine what the closing costs will be on homes in various price ranges. These costs include the lender’s origination fees, title and settlement fees, taxes and insurance and, where applicable, homeowners association fees. First-time home buyers often overlook additional expenses when making initial plans to purchase a home. An experienced real estate agent can keep that from happening so you’ll have a clear picture of your total expenditure.
% of income for housing
Determine how much of your total income will be spent on the home(s) you’re considering. Fannie Mae recommends that a maximum of 28% of your income should be allotted for all housing costs including what we’ve talked about above. “House poor” is the term used to describe people who overspend on purchasing and maintaining their homes.
The right time
Not every time is the right time to buy. Ask your Realtor about Silicon Valley market trends, specifically in the locales you’re considering making a purchase. Are prices rising? Falling? Are prices moving quickly in one direction, or is the move slow? A real estate agent familiar with local market trends is your best source of knowledge and advice on when to buy a new home.
These are just a few of the things first-time homebuyers need to know and do prior to beginning a transaction. If you choose to work with me as your Realtor, you can count on expert knowledge of the communities you’re interested in and solid guidance in selecting the type of dream home you’ll be able to enjoy for years to come. Call me at (650) 947-2942, and let’s talk about your new home.
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