7 mis­takes to avoid on your way to achiev­ing the Amer­i­can Dream

GA Voice - - Metro Atlanta Living -

Spring is in the air and “For Sale” signs are mul­ti­ply­ing faster than rab­bits in an open field. It is the time of year when the hous­ing mar­ket in At­lanta heats up. Are you think­ing about buy­ing your first home? Here are sev­eral things to think about be­fore you start the process:

1. Do not find

the home of your dreams with­out get­ting qual­i­fied for a loan first. Ob­tain­ing a home loan is not as easy as it used to be. You will need to find a good lender and sub­mit an ap­pli­ca­tion in or­der to get pre-qual­i­fied for a loan. This will tell you how much you can af­ford so you look at homes in the right price range.

2. Do not bor­row

too much money even if you are qual­i­fied. Some lenders will al­low you to bor­row up to 45 per­cent of your to­tal gross in­come for a home loan. Be­cause they use the gross in­come and not the in­come you ac­tu­ally take home in your pay­check, bor­row­ing up to the max may strap your cash flow ev­ery month. You do not want to be house poor.

3. Make sure you get

in­for­ma­tion on the price of things like home­owner’s in­surance, prop­erty taxes and any home­owner’s


as­so­ci­a­tion fees. Th­ese things all add to your pay­ment and need to be fac­tored into the monthly ex­pense.

4. Own­ing a home is ex­pen­sive.

It is ideal for you to have at least three months of pay­ments avail­able in sav­ings so when a re­pair is­sue comes up, you have the funds to make the re­pair. There is no land­lord who will step in and fix things once you buy, so be pre­pared.

5. Hav­ing a mort­gage

and prop­erty taxes may al­low you to item­ize on your tax re­turns. Now that you own, make sure to keep track of things like your char­i­ta­ble con­tri­bu­tions, ad val­orem on your car, and state taxes paid. If you have enough to item­ize, you will want to make sure to take full ad­van­tage of the avail­able de­duc­tions. If you do not have a tax ac­coun­tant, now may be the time to hire one who is able to as­sist you with tax plan­ning.

6. If your sig­nif­i­cant other

is not able to be on the loan, think about the pos­si­ble ram­i­fi­ca­tions of putting their name on ti­tle be­fore you add them. If they are on the ti­tle to the home, they own half of it just like you. How­ever, they are not on the hook for the li­a­bil­ity of the mort­gage. If they leave or things end, you will owe the en­tire loan bal­ance, but they own half the as­set. It is wise to have a writ­ten agree­ment about what hap­pens in the event of a breakup. Not that you will...but things hap­pen.

7. Be flex­i­ble through­out

the process. Home buy­ing can be very stress­ful. There are many vari­ables that come into play and you will need to be pa­tient as you work through the home buy­ing process. Learn as much as you can about how the process works and who is in­volved in each trans­ac­tion be­fore you start so you are aware of the steps and re­quire­ments and feel com­fort­able with the process. A good re­al­tor and a good loan of­fi­cer should be able to give you the steps and in­form you on what to ex­pect each step of the way.

Now that you are aware of what to think about be­fore you buy, re­mem­ber to make an in­formed de­ci­sion, be ready with a pre-qual­i­fi­ca­tion and re­lax through­out the process. The end re­sult is home own­er­ship and noth­ing feels bet­ter than own­ing your own home.

Mercedes M Pasqualetti is Tax Man­ager at HLM Fi­nan­cial Group lo­cated at 160 Clair­mont Av­enue, Suite 360 in De­catur, GA 30030. www.hlmon­estop.com

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