Home Buying in Rochester, NY | CCCS of Rochester
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First time home buyer

If you are considering buying a home for the first time, the process and the expenses may seem intimidating. With careful planning, research, and some help from well-chosen professionals the process of buying your first house and the experience of being a first time home owner can be very rewarding.

Advantages of home ownership

There are many advantages to buying a home and they range from personal to practical. For most of us, buying a house is one of the biggest investments we will ever make, and real estate can be a good investment if the value of the property increases over time. As a homeowner, you probably will have more living space and you will have the freedom to renovate and redecorate as you please. If your house is in good shape and you get a fixed rate mortgage, you can have stable monthly costs compared to the variable costs of renting. With a fixed rate mortgage, your monthly payments will remain the same over the life of your loan. If you stay in your house for several years and make timely mortgage payments, you will build equity in your home and improve your credit score.

Disadvantages of home ownership

Owning a home can be a lot more expensive than anticipated. To qualify for a mortgage, you have to purchase homeowner's insurance and you are obligated to pay property taxes. If you buy an older home that has been neglected, the purchase price might be affordable, but the maintenance, repair, and monthly utility bills can be very expensive. If you can't afford to pay someone else to do the work, you will have to take the time to do it yourself.

Home ownership is a commitment. You can't just pack up and leave. It can take several months to sell your house or rent it out. If you are unable to make your mortgage payments for any reason, the lending institution can foreclose and take away your rights of ownership. As a homeowner, you are exposed to the ups and downs of the real estate market. If the supply of existing homes is greater than the demand, the value of your home can decline.

Determining how much you can afford

Before you begin shopping for a home, you need to get a good idea of what you can afford. There is a common rule-of-thumb that says you can afford a house that costs up to two and one-half times your annual gross (pre-tax) income. Following the rule, if your household income is $80,000, you can afford buy a home priced at $200,000. Of course there are other factors that influence your buying power such as how much other debt you have and your credit report and credit score, but this rule-of-thumb gives you a rough estimate.

Qualifying for a mortgage

Lenders evaluate your financial position by reviewing your income, existing debt level, and credit history. They look at your credit report and your credit score and evaluate your ability and likelihood to pay. If your mortgage application is turned-down, the lender will explain why.

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