Home ownership is part of the American dream. Buying a home is the biggest financial investment of most people’s lives. So how do you ensure that you’ve planned and prepared for the purchase of a home..… be it your first or one of many? Follow these steps to help you through the process.
Find the Right Home
Part of the excitement of looking at homes is the variety available. You can tour new and resale houses. You can tour houses in communities or houses with acreage. When you pull up to the curb of a potential house, what’s your first impression? Does it speak to you? Does it look warm and inviting? Within 3 seconds of entering the house, you will know whether it feels right. You begin to arrange furniture in the spaces. All of the other homes you’ve been looking at no longer appeal to you. This is home.
Save for a Down Payment and Calculate What You Can Afford
Saving up a down payment to buy your first house can seem like a pretty daunting task. The first step in saving up your down payment is to pin down the amount you can responsibly spend on a house. A good figure is a monthly payment no more than 28% of your monthly income. Online mortgage calculators can help determine what purchase price will equate to this monthly payment amount. Once you know your estimate purchase price amount, set a savings plan to achieve 20% of the purchase price to prevent PMI in your monthly payment.
Compare Mortgage Lenders & Get Pre-Qualified
You want to find a mortgage lender that does more than just give a good interest rate. Insist on professionals who listen to your needs and will guide you through the process. And banks aren’t the only ones lending money. Also check credit unions, mortgage bankers, and savings and loans.
Taking the time to get a mortgage pre-approval letter before you start looking at houses is important. It can give you an edge over other buyers who might be interested in the same house you want to bid on. It does that by presenting the seller with verification that a lender has evaluated your finances and confirmed the amount of house you can afford.
By being prepared, buyers can enter into the real estate market informed and ready to find their home sweet home or home away from home!