Home Buying Tips
Buying a home can be an exciting and stressful endeavor. Especially for a first-time buyer who isn’t sure how to navigate their way through the real estate market. According to a recent study by the National Association of Realtors, 32% of home buyers in 2015 were first-time home buyers around the age of 30. The market is filled with first-time buyers, and there are steps you can take to stay prepared and ahead of the curve.
Know Your Credit Score
Make sure you are in control of your credit score and your monthly budget so you know what you can spend. Lenders will use your credit history and potential to decide the terms of your mortgage. You can get a free credit assessment and any other advice by contacting a loan officer.
Find Out How Much You Can Afford
Calculate the maximum amount you can afford. Add up all your monthly debt so you can see how much of your income goes toward covering those costs. This is known as the back-end ratio. Most lenders look for a back-end ratio that is under 43%. Lenders will also want to see if you have a steady source of income and how much debt you have before determining the loan amount. Click Here for some great tools to assist you in calculating your costs
Understand the home buying process
Buying a home is one of the most important decisions you can make, so you’ll want to know what’s involved from start to finish. Your broker real estate agent can explain all the specific details about shopping for a home, but it’s good to have a basic idea of how it works.
Get pre-qualified
Find a Home… Search through listings, find an agent, or through networking. Then make an offer on the home. This can involve some negotiation, and then you will make a deposit. This is called earnest money because you are promising to buy the house unless there are any serious complications. Once you have placed the earnest money deposit, the house is off the market for the most part. Have the home inspected to make sure everything is on the up and up. If there are any major problems, you may cancel your offer at this time or renegotiate.
The Mortgage Process…You need a trusted company and advisor to walk you through this. Some companies do not have the right experience to help you navigate through the process. Make sure to do your research before you decide. Check reviews and also determine how long they have been in business. These are very important things to look at.
Build Up Your Savings
This goes without saying, but saving up your money can be very beneficial during the home buying process. You can make a larger down payment, fund improvement projects or repairs, or to pad your financial profile.
Also, visit The Housing Hour to learn more about all things home and mortgage related, there you’ll find a wealth of information and helpful tips.
