Home Ownership
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Gustavo L. Vila serves as a real estate broker with William Raveis Real Estate in Yorktown Heights, New York. In this role, Gustavo L. Vila works with both sellers and buyers of homes.
Financial assessment and planning may not be the most exciting part of purchasing a home, but they are among the most crucial steps of the process. Experts suggest that it is unwise to spend more than 35 percent of one’s net income on housing costs, including utilities and insurance. A savvy home buyer would calculate this number and then confine his or her search to properties that fell within this limit.
Buyers must also ensure that they have sufficient cash reserves for a down payment, which can be up to 20 percent of the home’s purchase price. This does not include closing costs, which may amount to three to five percent of the purchase price. Some buyers attempt to reduce the amount of time it takes to save up this amount by investing in volatile stocks, though it is important to remember that this may mean losing the original invested amount and having to start over.
While saving up the required funds, a savvy buyer will also check his or her credit to ensure that the report is free of errors and that the score is good. Those with less attractive scores can often improve them by paying down credit card balances and sending all bill payments on time in the period leading up to a mortgage application. Experts also suggest that potential home buyers avoid applying for other lines of credit if they intend to seek out a mortgage, as any such applications can reduce one’s credit score and impact the buyer’s qualification for a home loan.
Gustavo L. Vila (New York) 