Tips for Park City Property Buyers
Before you start looking for a home you should ask yourself a few questions.
Where do you want to live? Do you want to be close to schools, shopping, or work? Do you want to be near golf, skiing, parks, and other recreational facilities?
What kind of house would you like (need)? Are you looking for a particular style?
How many bedrooms and bathrooms do you want? Do you want a yard?
Are you looking for a house or condominium? Weigh the costs of HOA fees versus house upkeep and repair. Keep in mind that CC&R's exist for houses as well as condominiums.
We suggest making a list of the features you feel are most important in a home and rank them by level of importance. If you are purchasing the home with any other people, make sure that you work-out one list that works for all of the involved parties.
How much house can you afford (see below for an example)? Have you consulted a Real Estate Agent or mortgage lender to determine the size of the mortgage you would qualify for?
Here are a few tips to help you get organized:
Pull a credit report on yourself and make sure the information is accurate. If you find any errors, take steps to correct them immediately.
Browse through real estate advertisements in the newspaper and Homes magazines. This will give you a good feel for the types of homes that are on the market and what they cost. Ask your YouInparkCity.com agent about the homes you see and about what has recently sold around them. This is a much better indicator of their value than asking price. Visit open houses on the weekend. It doesn't cost anything to look, and looking at a few different homes might give you some ideas for things you'd like in a house but haven't considered. If you meet an agent at the open houses, tell them you are working with a YouInParkCity.com - Keller Williams Park City Real Estate agent.
Start saving money; you'll need to have cash on hand for a down payment and closing costs. Don't incur any additional debt. Pay down your credit cards - and don't apply for any new ones. Don't make any major purchases on credit - buy the furniture or car later.
Contact us early in your search process; your YouInParkCity.com Realtor can help you determine how much you can afford, and we can provide you with information on homes and neighborhoods that may interest you. We will also help you complete and understand all of the necessary forms when it comes time to make an offer and make sure that your best interests are preserved.
How much house can you afford?
Simply put, you can afford a house that costs as much as the largest monthly mortgage payment you qualify for. A quick way to estimate the size of mortgage you qualify for is to take your gross monthly income (that's before taxes and other deductions) and multiply it by .28. This works out to just over 1/4 of your gross income.
Mortgage companies use something called qualifying ratios to determine how much they'll lend you. Most mortgage companies use either a 28/36 ratio or a 25/33 ratio. The first number in each pair is the percentage of your gross income that the lender would consider acceptable as a monthly mortgage payment (i.e. if you make $3,000 per month, 28% of that is $840 per month).
The second number in each pair is used when all debt payments are considered, not just the mortgage. (i.e. if you make $3,000 per month, but also have a $250 a month car payment, 36% of $3,000 is $1,080, minus the $250 car payment equals $830).
As you can see, in this example the numbers work out to be almost the same. Obviously if you have more debt you would qualify for less.