Tag Archives: home buyer

Homeowner Costs People Forget About

Are you thinking about taking the big step of becoming a homeowner? Purchasing your first house is a significant and exciting change, but it can be easy to get caught up in the excitement and forget about certain costs. If you want to make sure you have all of your financial bases covered before owning a house, keep reading!

Lawn Upkeep

The cost of maintaining a lawn is one people often underestimate. Whether you hire someone to keep your lawn looking fresh or decide to do it yourself, it will cost some money. Besides needing a lawn mower for cutting your grass, keep in mind things like pest control, weed killer, fertilizer and landscape. Some other equipment needed in lawn upkeep includes a hose, sprinkler, rake, weed wacker, trimmers and much more.

Keeping it Clean

Keeping a house clean is much more challenging and costly than cleaning a small apartment. Many families not only add onto their collection of cleaning supplies, but usually double almost all of the supplies they own. It may sound unnecessary, but once you have to start making trips up and down stairs to clean different levels of the house, you might want to double your supplies, too.

Property Taxes

One of the biggest payment differences between paying rent for an apartment and paying a house mortgage is property tax. It’s important to figure this out beforehand and add it to your estimated monthly payment so you know what to expect. To get a general idea of how much you’d be spending in property taxes, use an online property tax estimator.

Immediate Renovations

After buying a house, it’s normal to want to turn that house into a home. Homeowners are constantly looking for things to improve, like redoing the kitchen cabinets, fixing the deck, changing the wall colors, finding a new floor you love… the list goes on. Keep in mind when house hunting what you’d want to change about the houses you look at and add this to the list when considering your expenses.

Time

This one seems obvious, and although this particular cost won’t be coming out of your pocket, it’s a very important component to consider. Owning a house means doing everything yourself – something you didn’t always have to do while living in an apartment. Keeping up with maintenance, dealing with pest control and tending to the lawn are some of the many time-consuming things that come with being a homeowner.

Now that you’ve considered some of the unexpected costs of owning a house, you’re able to make a more informed decision on if taking this step is the right choice for you right now. We offer mortgages that will help your homeowner journey become a little smoother.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

8 Surprising Costs of Buying a Home You Need to Budget For

Buying your first home is so exciting. It can also be a little nerve wracking the first time around if you don’t have any guidance. Here’s what you should know about the home buying process before, so you aren’t shocked by the expenses that come along.

The Appraisal

An appraisal is when you have a home expert come and determine the value of a home. They have no stake in the outcome of their conclusion, so you can expect an honest answer. You will want to be sure to have an appraisal completed to ensure that you are not paying more for the home than what it is worth. This can cost upwards of $600 and should be factored into your budget.

Home Inspections

Some get appraisals and home inspections confused. They are both important, but the home inspections are more tailored to your needs and may help to answer some of your questions about the conditions of the home. By getting an inspection, you are able to have a better understanding of the home’s condition. This can cost an average of $300.

Closing Costs

Sometimes, you may be able to convince the seller to pay the closing costs. Yet this isn’t something that should be relied on. Closing costs cost an average of 2-5% of the value of the home’s purchase price. It includes costs such as loan fees, taxes and title searches.

Homeowner’s Insurance

If you’ve rented prior to this, you may be new to fire insurance or more commonly known as homeowner’s insurance. It differs from rental insurance, as that covers your liability and personal items, while homeowner’s insurance also covers the physical structure of a home. The average cost for this is $1,500 a year.

Home Maintenance

The nice part of renting is that you aren’t responsible for home maintenance. Surprisingly, many are unprepared for the maintenance that comes with home ownership and how this can create additional expenses. You are going to need to buy basic items like a lawnmower, snow blower and a leaf blower.

Cleaning

If the prior owners hadn’t cleaned, you may have an additional expense of getting the carpets cleaned before you move in. Carpets should be professionally cleaned once a year, so if they haven’t been cleaned immediately prior to your move in, you may want to schedule a cleaning. This can cost $300 for a 1,500 square foot space.

Homeowners Association Fees

A homeowner’s association is a part of an organization that enforces rules and regulations for your property. They charge a fee for the upkeep of the property in addition to shared services among the community. These are typically due at closing, but you should be aware that the average HOA fees increase by 5% each year.

The Big Move

Often forgotten or not factored, is the move itself. Moving is an expensive business, especially if it’s across state lines. You will need to figure in the costs of movers, moving materials and transportation. These usually cost an average of $3,000.

Budgeting for these costs will allow you to have a correct price in mind when house hunting. Our team offers great insight into our mortgage products. Discover more today!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

NMLS #407724

4 Ways to Stay Within Your Budget When Buying a Home

The weather is beautiful and homes are popping up for sale everywhere! If you’re on the hunt for your next house, it’s important not to bust your budget. Luckily, we’ve compiled some great ways that can help you stay within your budget when buying a home.

Have 20% Saved for the Down Payment

While you don’t need 20% saved in order to actually buy a home, there are plenty of benefits that come along with it. In total, you’ll pay less for your home since you’re avoiding interest being applied to a higher cost. You’ll also potentially get a lower mortgage loan interest rate because making a higher down payment is a sign that you’re stable financially, and thus are a good credit risk. Finally, this can help you avoid paying private mortgage insurance.

In 2016, the average home down payment was 11% according to the National Association of Realtors. Younger home buyers ages 35 and under, who usually have lower incomes than people in their 40’s and 50’s, put down 8% on average for home down payments in the same time period. If you can’t afford 20%, it’s okay – but try to work your way towards that goal!

Raise Your Credit Score

The balance on your credit cards vs the credit limit is called your credit utilization ratio. This ratio accounts for 30% of your overall FICO score. By paying off your cards, your credit score will raise and allow for a better loan. It’s also important to know that new accounts and hard inquiries make up 10% of your credit score. When you open a new account, your credit score will drop for a couple months. When you know you’re going to be applying for a mortgage in the near future, it’s best to hold off on buying that new car or applying for a different credit card.

Earn More Money

There are plenty of ways to earn more cash! If you want to stay within your budget, finding ways to add more savings to the pile can help with that goal. You can take money from your IRA without the 10% early withdrawal penalty when you use the money for a home. There are also other solutions that won’t take from your retirement savings, such as getting a second job or hunting for a new job that will pay more. If none of those options work for you, try hosting a garage sale or selling some lightly used items you don’t need online. You could also find ways to use your talents on the weekends or after work, like being a photographer for weddings and senior photos on the side!

Utilize First-Time Buyer Programs

Exploring local and national first-time home buyer assistance programs is an important step in the journey to homeownership. See what’s available to you to know what your options are.

We believe these top tips will advance your home buying skills and help your budget. If you’re looking for a place to put your savings for your new home, we’re here to help. We also have all the home loan options you’ve been searching for and are happy to talk to you about the next steps!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

NMLS# 407727

7 House Buying Tips to Save Money

It’s finally house hunting season and you could not be more excited to get the ball rolling on your big purchase! Before you hit the road or the search bar, take these 7 tips into consideration.

1. Know Your Limits

Before signing the papers or falling in love with the first home you see be realistic about what is in your budget. We recommend spending no more than 25 percent of your monthly income on the mortgage. When you know what this number is, be sure to stick with homes in that price range. Don’t even go into homes that are going to be proportionately out of that limit, or you may kick yourself later as you feel straddled with a home you can’t afford.

2. Be Realistic About Fixer Uppers

While they are fun to watch on TV, if you don’t have the skillset to actually fix homes, a house that needs a lot of TLC is likely not for you. Many see a low price on a home and jump on it, thinking the work needed will be minimal and easy. When it comes to home improvement, no fix is simple and this is even more true if you are a newbie to the renovation game. Often people do not realize the time commitment and additional cost that come with dramatic improvements.

3. Provide a Strong Down Payment

The more you are able to give for a down payment, the greater equity you will already have in the home in addition to a lower monthly payment. This will save you money on interest in the long run.

4. De-clutter the Current Space

It’s time to spring clean your “extras.” We all have things sitting around our home that go untouched and unneeded. Start selling these items at a local thrift store or posting them for sale online. This will help to make your move easier and be a helpful way to start saving for the down payment!

5. Take Your Time When Shopping

Don’t let the desire to get out of your current living space cloud the judgement of the purchase. Take your time studying each home and realize that this is one of the most important big purchases you will make in your lifetime. It needs to be a thoughtful, decisive purchase.

6. Eliminate Other Debts

Get a great deal on the mortgage by making sure your credit score is in tip-top shape. A large purchase with a loan or credit card right before you buy a home will certainly have an impact on your mortgage rate. Boost your credit score by paying down the debt you have and stay away from any other purchases until after the home is in your possession.

7. Conduct a Personal Roof to Basement Inspection

Know the property backwards and forwards before signing the dotted line. This means hiring a trusted inspector and having a contractor come to confirm the findings. After this, there is still a final step. You need to conduct a thorough inspection to ensure that you know exactly what you are in for. This is a great checks and balances system to confirm that you are getting a fair deal that won’t end up costing you thousands in repairs later.

Be smart with your finances and don’t spend all your money on a “dream home.” We’re here to help you know how much house you can afford, while offering mortgage solutions to fit your needs.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

NMLS #407724

4 Steps to Buying a Home That Won’t Bust Your Budget

It’s that time of year when you’re likely to see ‘for sale’ signs on every block. Maybe you already have your eye on one and go out of your way to drive past it on your way home from work. Before you leap into purchasing a home, be sure to take these four steps before signing the bottom line.

1. Understand Your Monthly Expenses

Alarmingly, many Americans don’t have a true understanding about what money they have coming out each month. This can be a dangerous territory to get into, as it’s likely that there are a significant portion of the expenses that may be unnecessary. Take the time to have an understanding of what each of your monthly expenses are and if any can be cut or lessened. Maybe there’s a subscription you’ve forgotten about or haven’t realized how much money you are putting towards name-brand groceries each month.

2. Know What You Can Afford

Once you have your expenses broken down, you will have more of an idea of what you have coming out. Next, you should understand what you have coming in. Account for each person’s income contribution for the home. Subtract your monthly expenses from the after-tax amount and you will have an idea of what you can afford. You may want to consider meeting with a mortgage specialist to have a robust account of what homes could be in your price range.

3. Understand Home Buying Expenses

Being a homeowner comes with many responsibilities that sometimes can’t be accounted for. From broken pipes or a leak to a busted HVAC, the costs can be overwhelming at a moment’s notice. It’s important to understand the expenses that may come out of home ownership. Even if there isn’t something breaking, you have the responsibility of additional upkeep.

4. Set a Goal

Once you have a complete understanding of where you are and where you might be, you can set a goal. If the house you want is out of your price range, make it a goal to be able to afford a home like this. Take a look at what expenses can be cut in addition to how you can make additional income to get you to your goal within a reasonable time frame.

Don’t strap yourself into a payment that won’t fit your lifestyle. Allow us to help you purchase your dream home with a mortgage from Peoples Bank & Trust!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

NMLS# 407724

5 Best-Kept Secrets for Buying a Home

Buying a home may be a common practice for the average American, but it is not a simple one. This is especially true if you are new to the game and have yet to learn the ins and outs of the process. No need to worry, we have plenty of experience from our years in the home buying business and are willing to share the best-kept secrets on the market!

1. Start Today

If buying a new home seems far into your future, that means you are in the perfect position to prepare. Often, many have dreams of a new home but don’t start planning practically for how to get there. Maybe you haven’t bought that new home yet because you’re not financially ready for the investment. However, that doesn’t mean you don’t have a way to prepare. With a home purchase, you will have closing costs and a down payment. Start saving for this now! Imagine how much quicker you can get not only to your goal of home ownership, but having the ability to purchase the home you want without the down payment and closing costs being an inhibition. Additionally, the more you’re able to put down up front, the less your monthly payment will be!

2. Don’t Go Big

The saying, “go big or go home,” doesn’t apply to the purchase of your home. The big, shiny house on the block may catch your eye, but may not be the house for you. Often, people see a big home and instinctively want it to be their own. Yet, this may not always be the best choice. Large homes can be difficult to resell, as the market for them is different. Not to mention, you’ll have additional utility and upkeep costs that come with increased square footage. You have a greater chance of profiting off of a smaller home when it comes time to sell than a large one.

3. Go Shopping

For the open houses that you see as you drive around town – go to them! Become familiar with a variety of homes and their details. What are they pricing homes at in the neighborhood? What is the structure like? Ask as many questions as you can, and expose yourself to a home you may have not considered before. You may be surprised by what you like!

4. The Secret Bid

Know your limits and stick to them. There are many that buy more house than they can truly afford. This is why it’s important to not fall in love with the home until everything is signed. Meet with an inspector and make a fair offer, but realize that this is likely not going to be accepted in round one. At the same time, it’s important to not automatically shoot too low, as it may offend the seller which can set a rigid precedent for any future bids. Do your research on the property and the neighborhood before deciding on the first bid.

5. Negotiate, Negotiate, Negotiate

This is where the communication gets tricky and scares the newbies. Haggling might not be a common practice in our culture, but this is the time to be bold. Don’t hesitate on going back and forth on an offer. This is a normal process and it makes you a smart buyer.

When looking to buy a home, Peoples Bank & Trust offers options suitable for your financial needs. Contact us today for more info.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

NMLS #407724

So You’ve Bought Your First Home: Savings 101

Congratulations! You’ve taken a big step in your financial future by purchasing your first home. As a new homeowner, you may be worried about the chunk of change you just spent, and your bank account may be looking a little slim right now. Luckily, Peoples Bank & Trust is here with a few simple saving solutions to help your funds increase.

Slow Your Spending

As you have just made a big dent in your savings, now is the time to slow down on your purchasing behavior. Be sure to be aware of your spending habits. Don’t go shop for an extra pair of shoes or dine out multiple times a week, as that can add up in a hurry!

Revamp Your Emergency Fund

A bigger house means bigger emergency expenses. Put a little extra money here and there into your emergency fund to save up for problems such as needing a new roof, replacing a broken appliance or common plumbing issues. Being prepared means your bank account will take less of a hit since you have your emergency fund to fall back on.

Stretch Your Grocery Dollars

Eating out can cost you a fortune! According to the Bureau of Labor Statistics, the average household spends an average of $3,008 per year on dining out. Instead, find discount grocery stores such as ALDI in order to meet your budget. Setting a budget and only buying items you truly need will help stretch your money. Finding recipes for casseroles, soups and other large portion meals will help save money by creating leftovers for you to bring as lunch every day to work.

Don’t Buy New Furniture

Even though you’re excited and want to decorate your new home to the extreme, try to wait. Slowing down and taking the time to find second hand stores, garage sales and so on will help save you hundreds to thousands of dollars on furniture. It’s easy to do a little digging and find store-quality items.

Clean Out the Closet

As you’re already packing to move into your new home, now is the time to get rid of items you no longer need. Facebook Marketplace, Ebay and other online platforms allow you to easily sell items to others all over the world! Not only are you freeing up space in your new home, you’re making a few extra bucks along the way!

Being a homeowner is an exciting new journey, but keeping up with your finances can be a little hectic. These tips will help you put a few more dollars in your bank account while enjoying the joys of your new home!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

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