First Time Buyers :. NC Pittsboro: Cindy Brudvik Davis - RE/MAX Southern Advantage Pittsboro, Chatham County NC, Pittsboro NC

Information for First Time Home Buyers in Pittsboro, Chatham County, or the NC Triangle

First-time home buyers are often unsure about the financial aspects and logistics of buying a home, and you may have many questions swirling in your head. It's an exciting time in your life, but one that can be stressful, as well. I love to help first-time home buyers!

Some of your questions may be "Are there financial advantages of buying over renting?"; "Should I prepare now, so that I'm ready when I decide to buy?"

Once you've decided that the time is right to buy, some of your questions will be:

How much can I afford?

Your home price range will be determined by your income, credit history, the cash you have for a down payment and closing costs, and your current debt. How much you earn compared to how much you owe will likely determine how much the bank allows you to borrow.

The financial rule of thumb is: your total monthly debt service, which will include your monthly mortgage, shouldn't be more than about 36 percent of your gross monthly income. Most experts say that your monthly housing expense, including taxes and insurance, should not exceed about 28 percent of your gross monthly income.

Naturally, every situation is different, and each lender has different rules about working with buyers. A number of choices within your control can affect your monthly payments as well. For example, a larger down payment may lower your monthly payment.

What is the importance of Pre-approval?

Pre-approval can be a very valuable step towards purchasing a home. A pre-approval letter from your mortgage lender lets you know exactly how much you can spend, and it shows home sellers and real estate agents that you're serious about buying a home. This may give you leverage in the purchase negotiation process. Most sellers prefer working with a pre-approved buyer.

Is the neighborhood I choose as important as the home?

Buying a home is an investment in the neighborhood as well as the house. In fact, the location, character and amenities of the neighborhood may be as, if not more, important to the property value as the house itself. No matter what kind of neighborhood you're looking for, it's important to know its history and future when you decide to buy. Here are some of the things Cindy Brudvik Davis can research for you:

Recent sales - Find out if the market is slow and what homes have been selling for.
Homes now for sale - What homes are listed in the area, and are they listed above past sales? Just knowing current list prices is not enough. This will give you an idea of the area's overall market value.
Home appreciation - Historical data o sales gives the best indicator of a neighborhood's potential. Are homes appreciating at 3%, 5%, 10%, or higher every year?
Schools - Even if you don't have school-age children, school scores and district boundaries are very important to research before moving into a neighborhood. The closest school is not always in your district, and school performance scores can have a huge impact on property values.
Crime - Get the hard facts about any problems in the neighborhood -- don't depend on anecdotal information.
Demographics and growth - Find out how the area is growing and changing, as well as about any proposed changes.
Community - Learn about neighborhood features, such as public schools, shopping areas, parks, commuting options, and more.

What about a down payment?

An important aspect of getting a home loan is saving money for your down payment. You have many choices to make your home more affordable to you.

Lenders used to require a down payment of at least 20 percent of the home's price. These days, however, many lenders offer flexible home loan programs allowing you to put very little down -- three percent or less of the home price. For some buyers it's possible to buy a home with no down payment at all, or to receive help from local down payment assistance programs.

If you decide to make a down payment of less than 20 percent, your lender may require Private Mortgage Insurance (PMI), which protects the lender in case you cannot repay the mortgage. Talk with your lender to find out the smartest deal for you.

What about closing costs?

You'll also need to pay for closing costs, which are costs associated with the purchase, including the costs associated with initiating a loan. These can include loan origination fees, discount points, attorney fees, and recording fees. Closing costs often can total from three to five percent of the price of your home.

What will be included in my monthly mortgage payment?

Your mortgage payment consists of principal, interest, taxes and insurance (often abbreviated as "PITI"), and sometimes additional fees, such as homeowner's association dues.

Principal is the money you borrowed to purchase the home.
Interest is the cost of borrowing money.
Taxes are paid by homeowners to local governments, and are usually a percentage of the assessed property value.
Insurance helps protect against financial loss from fire, natural disasters or other hazards. Most lenders require you to have a homeowner's insurance policy on your home because it will help protect their investment as well as yours.

Many loan quotes will include only your principal and interest (P&I). In that case, ask your lender to also factor in the taxes and insurance to calculate your total monthly mortgage payment.

Cindy Brudvik Davis, RE/MAX Southern Advantage, a full service real estate agent in Pittsboro, Chatham County, will work on your behalf to actualize your real estate and home ownership goals in the following NC Triangle towns and communities:

Apex (Chatham and Wake Counties)

Carrboro (Orange County)

Cary (Chatham and Wake Counties)

Chapel Hill (Chatham and Orange Counties)

Fearrington Village (Pittsboro in NE Chatham County)

Governor's Club (Chapel Hill, Chatham County)

Graham (Southern Alamance County)

Holly Springs (Wake County)

Morrisville (Wake County)

Pittsboro (Chatham County)

Raleigh and North Raleigh (Wake County)

RTP (Research Triangle Park)