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Love, Money & Your First House

Love, Money & Your First House


Not to burst your champagne bubble, but home ownership is a major expense - and it takes careful consideration to make the best decision. No surprise, this starts with a discussion about money.

"There's nothing so seemingly unromantic as setting up a budget, but that's the reality," said Amy Jo Lauber, president of Lauber Financial Planning in West Seneca. Before you commit to buying a house, take a realistic look at your financial situation. Lauber said a good place to start is your outstanding debts. She said couples should begin by saying, "Here are our expenditures, how do we meet these?" Don't be discouraged if buying a house right away isn't in your budget; Lauber said you can take control by tackling outstanding debts first.

"There are a lot of young people who can't buy a house because they have too many student loans," she said. Work on paying those down and banking whatever you can towards a down payment. A good rule of thumb, Lauber said, "is 20 percent down on a house that is no more than three times the annual salary for one spouse. This is a conservative and do-able model."

For couples ready to take the plunge, the next step is an open conversation. "Determine what you as a couple, really want and need. You will learn a lot about each other when you start discussing location, condition and prices of houses," said realtor Terri Campbell, licensed realty agent for Realty USA. The next step is to seek advice and input from people you trust; that includes your family, friends who've already bought homes, and a real estate agent who can work with you.

"Research and interview realtors who represent buyers in your target area. There is a difference in levels of expertise and service among local real estate agents," said Campbell. Link up with someone who understands your needs, budget and future plans."

The next step is to get your money in place. Campbell suggests that you secure the services of a reputable mortgage broker. There are a variety of options for financing, and the broker will help you gain a deeper understanding of the intricacies behind a mortgage loan. "A 'preapproval' letter will inform you and your real estate agent about which properties are possible for you to purchase," Campbell said. Keep an eye on mortgage rates: when rates are higher, you're better advised to make a larger down payment. Lower rates mean you could put aside some cash for home improvements or furnishings.

Once you start looking at houses, said Elizabeth Stablewski, licensed associate real estate broker and leader of the Elizabeth Stablewski Team for Nothnagle Relators in Orchard Park, it's important to keep an open mind. Your mind's eye may see you in a spacious '70's-vintage split level in the suburbs, but your budget may put you in a Cape Cod on the city line. Even when you clearly articulate what you want to see, your realtor may offer other suggestions. "There may be things that don't jump out at you, and while you don't have to like what we show you, there may be a reason for it," said Stablewski.

And remember, it's your first home: you may only be there between five to seven years. "This is where you're building your equity and realistically, it's probably not the last house you're buying," said Stablewski. Keep location in mind, too: if you want to be closer to work or family or the places where you socialize, this may dictate your choices.

It's important to be realistic, too. If you grew up watching "This Old House" on PBS and still watch the do-it-yourself programs on HGTV, but have never picked up a hammer, you might want to steer clear of fixer-uppers. On the other hand, if you're somewhat handy and willing to be on call, invest in a duplex where your tenant's rent helps cover your mortgage payments. Or if extra responsibilities don't fit your lifestyle right now, consider a condominium where there's relatively no maintenance.

Before you commit to the house, bring along a trusted friend or family member (with a good eye for details) to take a look. Realtors call this "the in-law factor," said Campbell. "They may view it with less emotion." Be prepared if this new set or eyes encourages you to move ahead with this purchase, or walk away. And, Campbell said, "Depend on your realtor to keep you focused on your ultimate goal."

Once you're in your new place, you'll want to furnish it. Lauber said that, "feathering your nest" adds expenses, and if one spouse is a spender and the other isn't, "this can get old really quick." Plan a reasonable budget for what you need right away and what can wait. Then, respect your budget boundaries and your spouse's tolerance, too.

For more information on finding the house that's right for you in WNY, head to!

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