Wednesday, September 14, 2016

Making the Transition from Renter to North Shore Homeowner

September does not only signal a change in seasons, but a shift for many renters who will soon become homeowners. Fall is an opportune time to buy a home on Chicago's North Shore and if you are currently renting, you might be mulling over whether or not you are ready.

As your local real estate expert, I understand that buying a home for the first time can feel overwhelming, but by asking yourself a few important questions, you can ensure you are making the best decision.

Do you understand the costs of homeownership?
You may have played around with a mortgage calculator to determine how much you can afford on the North Shore, but there are more costs involved aside from your monthly payment. In fact, this is one of the biggest surprises to first-time buyers and can leave them feeling remorseful. It is important to research your potential mortgage payment, but also look into costs like property taxes, homeowner's insurance, HOA fees, closing costs and yearly maintenance and upkeep. It pays to know exactly what you're getting into before you sign on the dotted line, so take your time researching!

Do you know the tax benefits?
As you are researching the costs of homeownership, look into the tax benefits. You will be pleased to learn that mortgage interest and property taxes are deductible on your tax returns, which will in turn lower the ultimate cost of owning a home.

Do you know which mortgage fits you best?
Not all mortgages are the same— in fact, there are many choices, from the common 30-year-fixed-rate to the 5-year-adjustable-rate and beyond. Take some time to identify the pros and cons of each mortgage type so you can find the loan that makes sense for your financial situation. For instance, there are loans that allow for a smaller down payment, but have a higher interest rate and vice versa.

Do you have a down payment?
The down payment is an important part of the home buying process, but it is not always required. There are loan types, like a VA loan, that allow for zero money down and others that allow for as little as three percent down. If you have a larger down payment to work with, your monthly mortgage payment will ultimately be lower, but don't panic if you don't have too much saved.

Do you know your credit score?
Your credit score will be referenced by your lender to determine your eligibility for a loan, as well as certain loan types. Now is the time to look into your score and clear up any errors that you find. If possible, try to boost your score prior to buying a home by paying down any outstanding debt and eliminating extraneous spending on credit cards.

Ready to start your home search in Northbrook, Deerfield, Highland Park, Glencoe, Winnetka and the surrounding areas? Give me a call today!

Janie Bress
Your North Shore Real Estate Expert

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