Buying your first home can seem like a complex experience, because, well, it is. 

In a two-part series, you’ll get a checklist, comments and tips on buying your first home.

With interest rates where they are—4.75 percent to 5 percent—you can afford a house more now than when interest rates go up, as they are expected to do so this year. 

Let’s start at the beginning:

1. Figure out how much you can afford. Subtract your debt from your monthly income.  Then get your FICO score and credit report. (A mortgage broker can assist you with this)  
2. Think about how much you have for a down payment.  With FHA financing, you will need at least 3.5 percent down on the purchase.
3. Get pre-approved for a mortgage. Shop for not only interest rates, but also mortgage fees. An estimate of real estate taxes and homeowner’s insurance will be factored into your monthly mortgage payment. This determines your price range when searching for a home.
4. Keep in mind, real estate taxes vary from town to town and are calculated by what is called a millage rate. The assessed value of the home is multiplied by the millage rate. These rates include county, municipal and school millage. So where your millage is higher, your taxes will be proportionately higher. Here are the millage rates for the towns around us:

• Lansdale Borough:  28.1514
• Montgomery Township:  26.1414
• Towamencin Township:  28.4594
• Upper Gwynedd Township:  25.6634
• Hatfield Borough:  25.6514
• Hatfield Township:  28.6864
• North Wales Borough:  28.6524

Remember, these are applied to the tax-assessed value of the home, not the purchase price of the home.           

1. Determine what you need in a home.  Think about the location, the type (single, twin, condo, etc), the number of bedrooms and baths you desire.  You don’t want to narrow your search too much if you have a narrow price range. If you limited yourself to only Colonial-style homes, you may be passing up on some other styles that may otherwise fit your needs and lifestyle.
2. Do a little research on your target neighborhoods. What are the schools and crime rates like? What will your commute to work involve, and are there parks, shops or restaurants nearby?
3. Work with a buyer’s agent. This person is a real estate agent that represents your best interests. When you call the agent on the “for sale” sign, that agent represents the seller. When choosing an agent, it's best to work with a Realtor who is designated as such from the local Realtors association. You’ll want experience and good chemistry.

In the next series, I will get into the details of how to search for the ideal home, making an offer, and negotiating and finalizing the deal!

For more information on this topic, contact Gina Wherry, 215-256-1200, ext. 322, or visit www.scottloperteam.com.