buying a home

It Takes More Than a Downpayment to Buy a Home

It Takes More Than a Downpayment to Buy a HomeFirst time home buyers tend to focus solely on saving for a down payment when they are interested in purchasing a Lake of the Ozarks/Truman Lake home.  The more money you can put down, the less you’ll have to borrow, resulting in a lower monthly mortgage payment.  However, it takes more than a downpayment to buy a home.  There are other expenses that first time home buyers tend to overlook or are simply unaware of when they get caught up in the whirlwind that is homeownership.

One expense that many first time Twin Lakes home buyers are unaware of is something called PMI (Private Mortgage Insurance).  This is a mandatory insurance required by home buyers who borrow more than 80% for their home purchase (ie, put less than 20% of the purchase price down).  This covers the loan company in case you end up defaulting.  This insurance premium will go down as your equity increases.  Once the principal on your home loan is less than 80% of your home’s value, you can have the PMI eliminated.  Of course, if you are able to put at least 20% down on your Twin Lakes home purchase, you won’t have to worry about PMI at all.

Closing costs are also things that tend to be overlooked by first time home buyers when buying a Lake of the Ozarks/Truman Lake home These costs include loan processing fees, title fees, fees to record the deed, etc).  These costs vary, so make sure you receive your Good Faith Estimate you are legally entitled to from your lending company.  Typically, you can expect to pay around 2-3% of the price of the home for closing costs.

Home inspections and appraisals are also necessary and, typically, paid by the buyer.  Sometimes, the seller may have already had an inspection done recently.  But it would be wise to have your own inspector look at the property to compare the findings.  You don’t want any nasty surprises when you move into your new home.

Property taxes are an unavoidable part of homeownership.  These are what help fund the local government and schools.  These costs also vary depending on where you live.  Taxes can either be paid in one lump sum annually or divided up into 12 payments and added onto your monthly mortgage payment.  Many homeowners find it easier to pay in monthly payments throughout the year rather than try to come up with the entire sum at one time.

Finally, all lenders require you to carry homeowner’s insurance on your Lake of the Ozarks/Twin Lakes home for as long as you own it.  The cost for this insurance is dependent on a variety of factors, including the size of your home and lot, age of the home and which company you use.  Get quotes from several different insurance companies before settling on one.

While saving is great, it takes more than a downpayment to buy a home.  Keep these expenses in mind when deciding whether you can afford that Twin Lakes home or not.  When you’re ready to start looking for your dream home in the Twin Lakes area, please feel free to contact us.

Crist & Sharon Fanning, Your Link to the Lake Lifestyle

The Who, What, Where, When and Why of Buying a Home

The Who, What, Where, When and Why of Buying a HomeBuying a home, even in the Lake of the Ozarks/Truman Lake area, can be a big financial decision for anyone.  That is why it shouldn’t be taken lightly.  Smart home buyers consider the who, what where, when and why of buying a home before they even start looking.

Who should I use to represent me?  Finding the right Twin Lakes real estate agent is important.  You want someone who has knowledge of the area as well as experience in local real estate sales partnered with great negotiation skills to get you the best deal possible on your dream Twin Lakes home.  Make sure to personally interview several agents in the area so you can make sure their personality meshes well with yours.  You want to be comfortable knowing that they will be representing you, especially since you will be working closely with them over the next few months.

What can I afford?  Don’t confuse what you qualify for in a home loan with what you can comfortably afford.  Just because a loan company says that they will approve a loan for up to $500,000 doesn’t necessarily mean that you want to shoulder that much of a mortgage payment.  A good rule of thumb is to not spend more than two to three years’ gross household income on a home.  For example, if your household income is $100,000 per year, you should be looking at Twin Lakes homes in the $200,000-$300,000 range.  Most financial experts agree that your total debt load (including payments on your mortgage, car, student loan and credit cards) shouldn’t equal more than 41% of your total monthly income.

Where do I want to live?  Your lifestyle will strongly dictate the answer to this question.  Do you want to live close to work so your commute is less?  Are you interested in living in the hustle and bustle of the city or does the idea of winding down at the end of the night in your beautiful Twin Lakes home sound perfect?  Do you want a smaller townhome/condo style of home so you don’t have to worry about yard work or do you need lots of outdoor space to roam around in?

When do I want to move?  The sooner you begin your Twin Lakes home search, the better, no matter what time frame you are looking at.  Creating a plan will help make the home purchase process go much smoother.

Why should I buy now?  Interest rates have remained at historically low levels (hovering around 4%) for months now and prices on Twin Lakes homes have never been better.  But that won’t last for long!  Feel free to contact us so we can help you with the who, what, where, when and why of buying your Lake of the Ozarks/Truman Lake home now!

Crist & Sharon Fanning, Your Link to the Lake Lifestyle

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