1. How to Buy Your Own Home
Lori Hubbell, Better Homes and Gardens Real Estate

2. Buying a house can be challenging, but it is worth the effort!
Here are some good reasons to buy a house:
Owning your home keeps money in your pocket, not a landlord’s pocket.
Some monthly rent payments are more expensive than owning.
Owning your own home gives you something to pass on to your children.
You can design and decorate your own home to suit your needs.

3. Should I rent or buy? Consider the options based on your income and lifestyle.
Owning a home is not for everyone.
Owning a home requires regular maintenance and expenses can occur without warning.
YOU will have to make or pay for repairs, lawn care, and snow removal.
Furnace/AC, roof, plumbing, electrical, painting…

4. Repairs and Maintenance
When you own the house, there is no landlord to call for help with repairs.
Set money aside for unexpected repairs or damage
Take classes on home maintenance
Use Google and Youtube to learn more
Check online reviews for trusted repair companies

5. Who can help me?
First time home buyers should hire a realtor to help with the process. Realtors get paid after you purchase a home. Their payment is part of the transaction, not a separate payment.
Realtors…
Provide guidance to both sellers and buyers to purchase property for the right price under the best terms
Help determine your home needs and financial abilities
Prepare necessary paperwork
Set up appointments and go with you to tour houses
Realtors will point out good and bad things about houses so you can make an informed decision

6. The Language of Home Buying
There are many words in the process of home buying you may not have heard before – even if you are a native English speaker!
Mortgage: A mortgage is a loan in which property or real estate is used as collateral. The borrower enters into an agreement with the lender (usually a bank) wherein the borrower (you) receives cash upfront then makes payments over a set time span until the lender is paid back in full.
Interest: Interest is the amount the bank has earned and charges for the use of the money it has lent.

7. Credit Score
Credit score is based upon income versus debt, number of credit cards with high balances, and unpaid or late bills. This is why it is very important to pay all of your bills on time. A perfect credit score is 800. You need at least a 660 to get a mortgage loan. Banks prefer scores between

8. Pre-Approval
Pre-approval is the first step of home buying. You must get pre-approved by a bank or mortgage lender to buy a house – before you find a house you want to buy. Approval depends upon your income, debt, and credit score. You need to provide 2 years of tax returns and 60 days worth of current paystubs. This pre-approval will tell you what price range of homes you should look at. Never buy a home if you cannot afford the monthly payments and still have enough money to save for future repairs.

9. Earnest Deposit
Once you find a home you want to make an offer on, your realtor will write up a contract with your intent to purchase and terms. The realtor presents the contract to the person selling the house along with your earnest deposit. An earnest deposit is a check for at least $1, to show that you are serious (or “earnest”) about buying the house. This is your first payment on the house. It will come off the balance due at closing. If the contract falls through due to financing, you will get this money back.
01/01/2017
1000
One thousand dollars
Deposit
John Smith

10. Escrow: The time period of days passing between when your offer is accepted and you close on your home. Closing: This is when all the papers are signed, the house is signed over to you, you get the keys, and can move in.

11. Monthly Mortgage Payments
Your first payment will be due one month after closing.
Most mortgages are for 30 years, but there are 20 and 15 year mortgages too.
The shorter the mortgage period, the higher the monthly payment.
It is best to start with a 30 year mortgage and pay extra when you are able.
Making even one extra mortgage payment per year can help you pay off your mortgage in half the time and save you thousands of dollars in interest payments.

12. Monthly Payment Breakdown
Principal: The amount of money you borrow from a lender. Interest: The amount of money you pay on the money you borrow from the lender (currently 3.5%-4.75% depending on length of loan and credit score). Taxes: County taxes levied on your property. You will pay 1/12th of the yearly taxes on each monthly mortgage payment. Insurance: You must keep hazard insurance on your house to protect it from loss like fire, storms, and flooding. You can expect to pay about $1, per year. You will pay 1/12 of your yearly premium on each monthly mortgage payment.

13. Example of a Monthly Payment
$500 Principal + $300 Interest + $150 Taxes + $85 Insurance = $1,035 Total Payment
Set up automatic payments through your bank so that you never forget!

14. Enjoy your new home!