Are You a First Time Home Buyer considering Kalamazoo Real Estate?
- How long you plan to live in the home.
If you purchase a home and get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.
- The length of time that it will take to cover those costs depends on various economic factors in the area of the home.
Most parts of the country and Kalamazoo real estate has historically had an average of 5% appreciation per year. In this case, you should plan to stay in your Kalamazoo home at least 3-4 years to cover buying and selling costs. If the area you buy your home in experiences an economic up turn, the length of the time to cover these costs could be shortened, and the opposite is also true.
- How long the home will meet your 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. 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.
- Your financial health – your credit and home affordability.
Is now the right time financially for you to buy a home and start checking out Kalamazoo real estate? Would you rate your financial picture as healthy? Is your credit good? Currently a credit score if about 620 will be needed to qualify for a mortgage in Kalamazoo. Generally, if you have more than a couple of blemishes on your report, lenders may still provide you with a loan to purchase Kalamazoo real estate, but you may just have to pay a higher interest rate and fees.
- Some say that you should refrain from borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries.
Are you in a position where you expect to make more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Make sure that whatever you do, it’s within your comfort zone.
- To determine how much home you can afford, talk to a Kalamazoo lender or use our “home affordability” calculator.
Good calculators will give you a range of what you may qualify for. Then call a lender. While some may say that the “28/36” rule applies, in today’s home mortgage market, lenders are making loans customized to a particular person’s situation. The “28/36” rule means that your monthly housing costs can’t exceed 28 percent of your income and your total debt load can’t exceed 36 percent of your total monthly income.
- Where the money for the transaction will come from.
Typically Kalamazoo homebuyers will need approximatley 10% for a down payment. Closing costs can sometimes be negotiated with the offer. If your credit isn’t stellar but you have managed to save 10-20% for a down payment, you may still be able to qualify for a home loan.
- The ongoing costs of home ownership in the Greater Kalamazoo real estate community.
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. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your realtor and your lender aware of your desire to limit these costs.
We always recommend that you sit down with a lender or two before you begin your search for a Kalamazoo home. That chat will help you to understand what home you can afford. If you would like help choosing a Kalamazoo lender to help you, contact the Veenstra Team. We have great relationships with several lenders who have a great track record of excellent customer service.
Our FREE Home Buyer Course is available.
The Veenstra Team has prepared a free, no obligation Greater Kalamazoo home buyer course that will help any first time home buyer understand all the details and process for buying a home. Getting the home buyer course does not make you obligated to purchase a home, but it will allow you to make the best decisions for you. CLICK HERE TO SIGN UP!