Mastering the Art of Buying a Home

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Feb. 20 (Bloomberg) –- In today’s “The Paybook,” Town Residential West Village, NYC Sales Director Kristin Thomas discusses tips on how to save for a home and the hidden costs you should look out for when making your purchase. She speaks to Carol Massar on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

Newsroom that you have to make sure you have a job and steady income.

That is number one.

But there are a lot of costs that go into buying a house, aren't there?

More so than most buyers are even aware of.

It is really important to get a clear understanding on how to break off -- costs down.

Things like the closing cost -- the closing cost, typically lenders look for 20% to 30% of the purchase price of the home.

Then you have your closing cost, and that can run anywhere from 2.5% of the home purchase all the way to upwards of six percent -- 6%. and banks want to see you have money left over afterwards.

Not that you will be house-poor, as they call it.

There are three components.

The last component is post-closing costs.

You want to have between six months to upwards of two years of carrying cost for your loan in the bank after you close.

That is something banks look for.

You have to really have a team together to do this.

Most people can't do it on their own.

What do you need as part of your team?

That is where we come in.

The first part of your team, you want to interview a few real estate agents and find when you feel comfortable with.

That is a really good place to start.

The second component of your team is your real estate attorney.

The third part is your mortgage bank or mortgage broker.

It is really important that your team works together.

It is important to form that team in the beginning.

The process will be a lot smoother throughout the entire time.

A lot of people also get preapproval from their mortgage banker or broker.

Good idea, in general?

In this market is a must.

I recommend doing that before you even go see your first property.

You want to work with your mortgage banker, mortgage broker, to get that proof.

Your real estate broker can guide you.

You see a lot more people doing a 15-year or 12-year when they buy their house.

Any advice?

It is a really good question.

There are two typical types of loans.

The 30 year fixed-rate mortgage, where your payments are fixed for the entire term.

Then you have your adjustable year -- adjustable rate mortgage, also known as the arm , where payments are fixed for 5, 7, or 10 years.

Those are a little riskier because if you are not worried about selling in that term or refinancing or even paying down the loan, your rate can go up after that term.

The 30-year fixed is the more conservative route.

But if you move into or three years, that might make sense for you.

The good thing about arm's is the monthly payments are lower.

Thank you so much.

Coming up next, we will meet the

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