After weeks of browsing the homes for sale in St. Charles
, imagine finding the house of your dreams. When purchasing a home, there are obvious details of the sale to consider, such as down payments, making an offer, and closing costs. However, the home itself has financial information that should be considered when purchasing the property.
One of the first steps of real estate finance is knowing how to find and understand financial information connected to the property; this provides a comprehensive overview of costs that may not show up on the average listing. With this information, you, as the buyer, can be confident in your decision to invest in St. Charles real estate
What is financial information?
When thinking of financial information regarding real estate, we often consider personal finances first, such as getting pre-approved and preparing for a down payment. However, the house itself comes with financial information.
There are monthly expenses to consider as well, widely referred to as PITI (Principle, Interest, Taxes, and Insurance). The principle is the amount you owe as the down payment. Interest is the percentage showing how much your monthly fee will be to the lender as you pay off your loan. Taxes are what is owed to local and state governments regarding property costs. Insurance is the homeowner's insurance that can be required by mortgage lenders and is based on the value of the home, the neighborhood, whether it is agricultural land, and other factors.
The other financial information buyers must consider can be connected or predicted by the home's history and extenuating fees that are separate from the core cost of the home. Here are some examples:
Property tax history
Each county and state have their property tax. When looking at a property, search for information on the tax percentage in that area. Charting the history of the home's tax rates can provide an overview of the area, the cost, and the final price.
This is like the birth certificate and resume of the house. Knowing the history of what was paid in the past and the effect renovations, updates, or neighborhood improvements had on any potential price increases can aid you as a potential owner. Of course, national economic factors will always impact the price history.
Home Owners Association (HOA) fees
Not every home will be a part of a Home Owners Association. However, given that St. Charles contains nearly 85 HOAs, there is a high probability your home will be under one. HOAs offer amazing benefits, such as landscaping and winter maintenance which includes salting, shoveling, and defrosting. The downside is these benefits are done for a fee.
If you are not a part of an HOA, the monthly maintenance cost will fall on you as the individual homeowner to look after your property. This can come in the form of finding a landscaper to cut your lawn and care for your property, like trimming hedges or bushes, planting flowers or hedges, and weeding. Seasonal needs must also be considered, such as raking up leaves and protecting fruit trees or gardens from frost. Illinois winters are not always friendly, with some residents needing to rent a snow plow, buy salt to melt ice on sidewalks and driveways, and defrost external piping to prevent damage.
How do you find the relevant information?
First and foremost, utilize public records. The National Mortgage Servicing Association, National Association of Realtors, Kane County Property Tax Inquiry, Illinois Department of Revenue, and the City of St. Charles all provide public information regarding property information. This level of documentation allows you, as the buyer, to have a history of the information required to make an educated decision. There are other reliable resources available to help locate public information on the area, providing detailed documentation which can impact your mortgage, offer, contingencies, and affordability. Many of the websites listed above will let you find statistics on not only property taxes, appraisal rates, mortgage rates, and local taxes but also details on the house, such as previous owners closing costs and other details.
Partner with an experienced real estate agent
If you truly want to do a deep dive into the property, connect with a reliable real estate agent
. Public records can only take you so far, and in the end, learning how to apply the information and the next steps can become overwhelming. Therefore, having an experienced professional to provide even more context about the property through the help of realtor databases and expertise to break down each piece relieves some of the burdens.
Using an agent allows you to gain knowledge from a professional who is familiar with the area as well as the property. As a result, you can ask detailed questions and get detailed answers, especially if you are unfamiliar with the area. A realtor can also aid in organizing a comprehensive financial plan allowing you to apply all the information for a reliable estimate.
The financial information regarding your property can take many different forms and have varying impacts on your final decision to invest in a property. Considering PITI, the core monthly expense of principle, interest, taxes, and insurance do not include a homeowners association, monthly maintenance, or tax and price history. However, each can have repercussions. Through the use of public records, searches, and websites, make a comprehensive list of what each cost would be for the specific property and take into account that mortgage payments that makeup PITI should not exceed 28% of your gross take-home pay, determining whether you want a home under an HOA and what monthly maintenance you are willing to invest. In the end, look at the information to budget your basic criteria for financial wellness better.
An invaluable aid that cannot be overlooked is an experienced real estate agent. With care, patience, and expertise, practicing agents will inform and educate, making you confident in your property choice. Contact The Sarah Leonard Team
to begin the search for the perfect St. Charles home.