Page 52 - Flathead Beacon // 11.26.14

44 | NOVEMBER 26, 2014
REAL ESTATE
MONTANA LIFESTYLES
Signs That You’re Ready to Buy
By MICHELE DAWSON
Figuring out whether you’re ready to buy a house — whether you’re a renter or are aiming to move up or size down – can be a daunting task. But there are signs that will indicate whether you’re ready to take the buy- ing plunge. If you are thinking about buying, you’re not alone. So are you ready to make the move? You might be if you:
1. Are familiar with the market. If you’ve been pay- ing attention to how much houses are listed for in the neighborhoods you’re eyeing and have a realistic view of how much a house will cost you, you’re in good shape. But if you’re dreaming about that big corner house with no clue about its asking price, you may want to spend some more time be- coming familiar with the market and how much houses are going for.
2. Have the money for a down payment and closing costs. The down payment is a percentage of the value of the property. Freddie Mac says the per- centage will be determined by the type of mort- gage you select. Down payments usually range from 3 to 20 percent of the property value. Also, you may be required to have Private Mortgage In- surance (PMI or MI) if your down payment is less than 20 percent. Closing costs include points, tax- es, title insurance, financing costs and items that must be prepaid or escrowed and other settlement costs. You can expect to pay between from 2 to 7 percent of the property value. Generally, buyers will receive an estimate of these costs from your lender after you apply for a mortgage.
3. Know how much you can afford. Freddie Mac says that as a general guide, your monthly mortgage payment should be less than or equal to a per- centage of your income, usually about a quarter of your gross monthly income. Also, your income, debt and credit history go into determining how much you can borrow. As a general rule, your debt – credit card bills, car loans, housing expenses, alimony and child support – should not be more than about 30 to 40 percent of your gross income.
4. Know what additional expenses will come with owning a home. This includes homeowner’s in- surance, utility bills and maintenance costs – roofing, plumbing, heating and cooling.
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5. Have your credit in good shape and make sure your credit report is accurate. Potential lenders will view your credit history – how much debt you’ve accrued, how many accounts you have open, whether your payments are made on time, etc. – to determine whether they’ll give you a loan. You should get a report from each of the three credit reporting companies: Equifax, Ex- perian and Trans Union.
6. You haven’t made any recent major purchases, particularly a vehicle. If you do, you may have a harder time getting a loan – or it could potentially lower the amount you’ll be approved for.
Once you determine that you are ready to pur- chase a home, winter is the time to start getting seri- ous. Here are a few reasons to brave the cold and go on a house hunt:
The winter season has fewer units on the market, and sellers tend to need to move from their property. You can use that to your advantage to get a favorable
deal. Winter has fewer buyers in the market. Looking for a home in the winter can be inconvenient, and peo- ple are less likely to move. Families also tend to be on a September to June cycle because they are unwilling to move their children to a new town in the middle of the school year. Fewer buyers means less competition.
Lenders also usually have fewer loans to process and less paperwork to deal with (though this can change quickly if rates fluctuate). With lenders less hassled, you can expect a smoother process to get approved for a mortgage. But, as reported in Bankrate.com, there are exceptions to this rule, most notably in warmer parts of the country (especially Florida), ski towns, and in parts of the country where demand is so strong that it will not slacken during the winter months.
Finally, as all savvy shoppers know, after the holi- day season comes the season of bargain opportunities. This includes housing market as well.
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