By Stephen Shea
For today’s post, I’d like to continue with the discussion on Buying Your Next Home. My previous post
centered on the preliminary steps one needs to take before even starting the
process of looking for a new home.
Today, I’ll discuss the next steps in the process, investigating where
you would like to live and the home you want and can afford to buy.
Fairfield County offers a host of delightful cities and towns to
choose from. While there are many
similarities among the County’s communities, there are numerous differentiators
too. Home prices can differ dramatically
by locale, which could prove a big determining factor in where you choose to
live. Commuting time to your job(s),
school reputations, recreational facilities, fast access to highways and
shopping vs. quiet streets and bucolic pastures, demographic differences or
similarities, all weigh on your decision.
Do your research on each city and town. There are many sources of information,
including the Higgins Group website (www.higginsgroup.com),
which offers wonderful insights on Fairfield County communities on its Media
Wall. Also check out the Town button on
the Higgins’ dashboard. It provides a
short video on each local community.
And, as with all real estate firms, our website lists a number of homes
for sale in each city and town we serve, to give you a sense of area homes and
the respective price ranges one might expect.
Information of a specific nature about each community is usually best
found by conducting online searches.
Also be sure to talk to family, friends, colleagues and professionals
knowledgeable about each locale, seeking their opinions.
Next up, develop your future home’s “must have” list. When making what is likely the biggest
purchase of your life, your home should fit your needs as closely as
possible. List things such as the type
of neighborhood, the minimum number of bedrooms/bathrooms, proximity to the
train for commuters, whether the house must be turn-key or if you’ll except
those in need of updating (at a lower price), the style of house, size of
property lot, and whatever else matters most to you. Additional items that would be nice to have
but not essential – the “want list” can also be drawn up to help when sorting
through competing properties. This may
be the first time you and your spouse have discussed such things. Best to do so before you start looking.
Next, determine how much home you can afford. Speak with a mortgage professional and learn
what options are available to you, current interest rates and how steady those
rates are, as your search efforts may take a while. There are a surprising number of mortgage
types and down payment options available that can help tremendously in making
the purchase of a house affordable.
Once you’ve determined not just how big a mortgage you qualify for but
how big a mortgage and its monthly payment amount you are comfortable with,
then obtain your pre-approval letter from the bank. This is essential for being taken seriously
as a potential buyer should you wish to make an offer on a house.
Affordability is impacted not just by your mortgage payment
however. You’ll have additional expenses. Property taxes and homeowner’s insurance are
typically escrowed monthly along with your mortgage payment. This is known as
PITI (principal, interest, taxes and insurance). When a bank is reviewing your mortgage
application, your expected PITI will be used to determine your mortgage
eligibility, as lenders typically limit PITI to a set percentage of your gross
monthly income.
Each Fairfield County community sets its own property tax mil-rate –
the factor used to determine a dwelling’s property tax amount. The difference between various cities and
towns can be substantial; a factor you should take into account when assessing
where you wish to live.
Verify with an insurance professional that your homeowner’s policy is
adequate to fully replace your home should disaster strike. You’ll need to determine if other insurance
is required, such as flood insurance if the property is in a flood zone. Mortgage insurance may be required if you
choose a mortgage option that allows for less than a 20% down payment.
As with all your professional relationship regarding real estate, be
it a mortgage banker, lawyer, insurance or real estate professional, interview
a number of them, see who you’re most comfortable working with, and choose whom
you believe will become an advisor you can trust.
Next up: Why work with a real estate professional.
Stephen Shea is a licensed real estate agent, real estate developer
and has a background in financial modeling and planning. He can be reached at Stephen@ChiltonAndChadwick.com or
203.822.1555.
No comments:
Post a Comment