Common Questions From First Time Buyers
Why should I buy, instead of rent?
Answer: There's more to owning a home than personal satisfaction. You can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes, too. Since interest will compose nearly all of your monthly payment, for over half the number of years you'll be paying your mortgage, this adds up to hefty savings at the end of each year. And you're also allowed to deduct the property taxes you pay as a homeowner. If you rent, you write your monthly check and it's gone forever. Another financial plus in owning a home is the possibility its value will go up through the years.
Should I use a real estate broker? How do I find one?
Answer: Using a real estate broker is a very good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you'll want to know about a neighborhood you may be considering. With immediate access to homes as soon as they're put on the market, the broker can save you hours of wasted driving-around time. When it's time to make an offer on a home, the broker can point out ways to structure your deal to save you money. He or she will explain the advantages and disadvantages of different types of mortgages, guide you through the paperwork, and be there to hold your hand and answer last-minute questions when you sign the final papers at closing. And you don't have to pay the broker anything! The payment comes from the home seller - not from the buyer.
How much money will I need to come up with?
Answer: That depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house.
When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies.
The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price.
Closing costs - which you will pay at settlement - average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise.
Remember - many of your moving expenses are tax deductible, so hang on to your receipts. Call the Internal Revenue Service and request "Tax Information On Moving Expenses" to find out which moving expenses you can deduct.
One Month Before Moving
- Pick up a Change-of-Address Kit from the Post Office and fill out for:
- Insurance companies
- Credit card companies
- Magazines and newspapers - to cancel local newspaper delivery
- Doctors, dentists and other providers - to transfer drug prescriptions
- Past employer - for W2 forms
For full service moves:
- Get written estimates from several moving companies
- Will the movers pack for you?
- What items won't they move?
- Get appraisals of high-value items in case of future claims
- Videotape your home and its contents for future reference in case of future claims
For do-it-yourself moves
- Make arrangements for truck rental and moving help, and buy packing supplies:
- Packing and masking tape
Two Weeks Before Moving
- Pack your vital documents in one place:
Passports, Military records, Mortgage records, Marriage license, Birth certificates, Vehicle titles, Stock certificates, Insurance papers, Bank
records, School records, Medical records
- Make arrangements to disconnect your utilities. Get refunds for any deposits made. Have meters read. Give new address for them to send their final bill: Cable - return box if necessary, Electric, Gas, Fuel, Telephone, Water
- Make arrangements to connect utilities to your New Home.
- Make arrangements for cleaning your old home.
- Inquire about your new Florida's auto licensing procedure and auto insurance rates.
- Check with your insurance company about transferring coverage to your New Home.
- Arrange to have a sitter watch your children away from the house on moving day.
One Week Before Moving
- Dispose of any flammable items: lawn mower gas, snow blower gas, paint aerosol cans
- Plan what goes in the car with you: Toys and games for kids, Special breakable items or collections, Important documents and records, Change of clothes and toiletries for your first day, Vacuum cleaner - if you want to clean right away, Toilet paper, First aid kit, Food kit with bottled water, cereal, bananas
- Make travel arrangements for your pets and plants.
- Purchase moving insurance if you have valuable antiques and collections.
- Have your car tuned up, oil changed and ready for the trip.
The Day Before Moving
- Defrost, clean and air out your refrigerator.
- Clean your stove.
- Make sure you have payment ready for the mover - they will not unpack without a check.
- Check your moving company's payment policies.
- Purchase traveler's checks for other possible expenses.
- Pack your former town's phone book for future correspondence.
- Get a simple breakfast ready for the next morning.
- Pick up ice and beverages for moving day.
- Take down curtains and curtain rods.
- Get a good night's sleep!
- Strip your beds.
- Moving company - will they disassemble the beds? Show movers around. Make sure your possessions to be moved are inventoried with them.
- Get all keys together. Put in a safe spot.
- Make sure moving van driver has correct address, phone number and directions.
- Confirm delivery date with movers.
- Check all rooms one last time.
- Remember closets and cupboards, basement and garage!
- Make sure all windows and doors are locked.
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