Maronda Homes News

Common Questions From First Time Home Buyers: Part 1

With the improving housing market, many first time home buyers are starting to ask themselves if they should buy a home rather than continue to pay rent. Here are some of the questions:

Why should I buy rather than rent? Rather then writing a check and watching your money disappear into thin air as a housing cost, wouldn’t it be nice if you got some of that money back at the end of the year? As a homeowner, that is exactly what happens. You can deduct the cost of your mortgage loan interest from your federal and some state taxes. You can also deduct property taxes as well. In the beginning, most of your mortgage payments are comprised of interest, so in the early years of owning a home you have the largest deductions.

How much money will I have to come up with to buy a home? This depends on several factors which include the type of loan you qualify for, the cost of the house, and what if any seller concessions are being offered. Sometimes home builders will offer closing cost assistance. However it’s best to consult with a loan officer though. There are three different cost associated with purchasing. You’ll need:

  1. An Earnest Money Deposit – This is the amount that accompanies the initial contract on the home. This is necessary in order to prove you are willing to complete a contract if it is accepted.
  2. Down Payment – This is the amount you need to pay when you go to the closing. This will be determined by the percentage required by your loan type. This amount includes whatever was initially put down for the Earnest Money Deposit.
  3. Closing Cost – these are costs associated with the processing of the paperwork and can vary. On average you can expect these costs to be 3-4% of the purchase price. However when you apply for your loan you should receive an estimate from you lender so that you will not be caught off guard by the amount.


How do I know if I can afford a home? Work with a lender and look at your debt to income ratio, credit score, and other factors to see what kind of loan you can qualify for and how much you qualify for in order to purchase. You can work with your local credit union, your bank, a savings and loan, or a private mortgage company. Maronda Homes does offer a full-service lender, FBC Mortgage, LLC. They work closely with us to find financing solutions for you – the Maronda home buyer – and help you afford the home of your dreams!

What other monthly costs are associated with buying a new home? While of course mortgage is part of the monthly puzzle, you will also have property taxes and insurance to consider in your monthly payment. Often though this is put into escrow with your overall payment and taken care of for you. If your utilities were covered in your previous rent, also take into account the possibility of paying water, sewage, trash removal, electricity, and or gas. You may also have homeowner association (HOA) dues, or condo fees. Don’t let this sound daunting as some of the utilities may be incorporated into you HOA.

Don’t forget to follow up with next weeks segment were we will have more details on mortgages and home ownership. And as always you can follow us on Facebook and Twitter.