First Time Home Buyer?

If you are considering purchasing a home in Gillette or the surrounding area, consider the following questions closely as you make decisions about the home you need:

How long do I plan to own the home?
If you purchase a home in Gillette or the surrounding area and then elect to relocate after only a short time, you may end up paying money in order to sell your home. In a short turnaround, the value of your home may not have appreciated enough to cover the costs that you paid to buy, or the costs that it would take you to sell your relatively new home.

The length of time that it will take to cover those costs depends on various economic factors. Most homes have an average of 3-5% appreciation per year. It is ideal for owners to plan to stay in their home at least 3-4 years to cover buying and selling costs. An economic up or down turn may lengthen or shorten the time it takes to to cover these costs.

Will This Home Continue to Meet My Needs?
What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you'll need to ensure that the home has the amenities that you'll need, even in the future. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you'll need will help you find a home that will satisfy you for years to come.

How Is My Financial Health?
Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Do you possess a favorable credit score? In this financial climate, lenders are more skeptical if there are problems with your credit history. Generally, a few minor blemishes on a credit report can make you a good credit risk and could qualify you for the lowest interest rates. However, if you have several offenses on your report, obtaining financing could become more difficult. Lenders may still provide you with a loan, but you may have to pay a higher interest rate, higher fees and the loan may have pre-payment penalties and other terms which may not be to your liking.

To determine how much home you can afford, talk to a lender or go online and use a "Home Affordability Calculator". This tool will give you a range of what financing you may qualify for. Then, call a lender.

Do I have funds available for Transaction Costs?
Typically homebuyers will need "earnest money" when submitting a bid for a home, as well as funds for a down payment and closing costs. However, with today's broad range of loan options, having a lot of money saved for a down payment is not always necessary - if you can prove that you are a good financial risk to a lender. If your credit isn't stellar but you have managed to save 10-20% for a down payment, you will still appear to be a very good financial risk to a lender.

Can I Afford the Ongoing Costs of Home Ownership?
Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium, townhouse or in certain communities, a monthly homeowner's association fee might be required. Be sure to make your REALTOR® and your lender aware of your desire to limit these costs.

Purchasing a home is a serious decision, and home ownership carries a financial responsibility. However, home ownership increases net worth and can help build a solid financial background.