When you are ready to make your first home purchase there are many decisions you will need to make. The first thing you will want to do is to hire a realtor and decide what type of home you are looking for. Every home type has advantages and disadvantges that you need to be aware of before you decide to purchase.
You have the option of buying a single family home, a duplex or even a triplex or quadplex. The easiest to get approved for is a single family home. A single family home will usually provide the best financing options to you, although if you plan on living in one unit of a 2 unit home the financing is usually pretty similar. The advantage of living in a single family home is that you own the home and it stands alone, by itself. With a 2, 3 or 4 unit home you will have other people living directly next to you and attached to your home. However, you will be making rental income from the multi-unit home that will help to make your mortgage payment. A multi-unit home though will usually have rate bumps for not being a single family home and the qualifying criteria is usually a little more strict.
There are also many homes such as condominiums or condos that have the added advantage of maintenance being taken care of for you. Mowning the lawn anad or snow removal are examples of some of the perks of owning this type of property. There are usually monthly or annual fees associated with these types of dwellings, but you are paying for services rendered in most cases.
Although buying a new home may seem like an American Dream or romantic venture, the reality is that the house you can afford depends on your current income and debt obligations. You must be able to pay your mortgage, satisfy all your current debt, and still have money left over each month to put in the bank. When you consider all these issues, you may find you will actually be shopping for a lower-priced house than the anticipated dream home.
A great benefit to owning a duplex is that when you buy a new home and move out your duplex your unit is now a rental and helps pay the mortgage for that property. It is a great strategy to let the rent pay your mortgage payments while the property builds equity.
Co-Op, or cooperative, is a common type of residence in New York & New Jersey, and in certain parts of Connecticut, California and Florida. Obtaining a mortgage for a CoOp is easier today than ever, however your Co-op board may mandate that you make a larger downpayment than you may be qualified for to obtain board approval.