First Time Home Blogging

If you are in the market for a home and have never owned one before then you have come to the right place! There are many different things that you have to stay abreast about in order to get the best possible deal. Right now FHA regulations are changing! There is legislation that is currently pending to allow buyers to put down a mere 1.5% at closing in order to get a home. If you think about it that's only $1500 for every $100,000 dollars. Currently it's 3% (about $3000) for every $100k. If you don't have it, don't stop reading: there are other ways to account for the 3%.

If you are a true first time home buyer then there is a dream rule that I impose on all of my first time clients. YOUR FIRST HOME WILL NOT BE YOUR DREAM HOME!

Many people hear that and are immediately disenchanted with owning a home. The truth is that the average person can't go out and qualify for a dream home, so a shake my imaginary client in the friendliest way and tell them to stop dreaming! Instead let's focus on the positive possibilities.

For instance, your first home should be a place that not only "feels homey" but is affordable. Many first time home buyers go out and max out the credit that is afforded to them through a lender. Don't be that person! Instead take the number given to you from your pre-qualification letter and discount it by about $20k, this will save you at least $100 per month based on today's interest rate. I call this the fudge factor.

What's a fudge factor? The easiest way to describe A Fudge Factor is with this thought: "I don't know what tomorrow brings so I had better plan something for it just in case!"

Next, you will have to cough up about $400 for an appraisal fee, $100 for an option fee, $300 for an inspection and $500-$1000 for an Earnest Money Deposit.

Blog Reader: What's an appraisal for and why do I have to pay for it?"

Paul: It's a third parties opinion of the value of the home. Loans are based on appraisals, so you have to pay for it!

Blog Reader: "What's an option fee and why do I have to pay for it?"

Paul: An option fee is exactly that, an option. An option to do what you ask? An option to have a home inspector come in and tell us what's wrong or not wrong with the property. Like I said, this is an option, but I highly suggest you obtain this. Some inspection companies will wait until closing to get paid on inspections. Ask me which ones when we write an offer and I'll tell you!