Buying your first home should be one of the most exciting and fulfilling events of your life. But making the leap to home ownership can seem like a big financial project. Like every big project it will require due diligence before start searching for available listings.
Start saving early
Down payment, closing costs and moving expenses are major things to consider before you even start your home buying journey. The down payment amount will vary depending on the type your mortgage. Although some of the loans may require as little as 3% it will usually require that you pay mortgage insurance (PMI).
Closing costs typically range from 2% and might go up to 6% and that’s additional money you’d have to pay, on top of your down payment.
New homeowner costs won’t stop at the closing table. Buying a home also means you’ll need to cover moving-related costs. From boxes and packing equipment, and possibly hiring movers to new furnishings and immediate unexpected repairs are just a few that needs consideration.
Check how much you can afford
You should examine your income, savings and recurring debt to figure out how much house you can afford to buy. A general rule of thumb is to keep your overall debt-to-income ratio at or below 43%. To calculate your DTI, you add up all your monthly debt payments and divide them by your gross monthly income. Many online lenders offer affordability calculators and I strongly advise to try them.
Check your credit
The better your credit history, the more likely you are to receive a good interest rate on your mortgage loan. Your credit score is a huge factor when you buy a house. Mortgage lenders and banks use it when considering what loan you may qualify for. Lenders will use your credit reports and scores as important factors in determining whether you qualify for a loan, and what interest rate to offer you.
Get a preapproval letter
Apply for preapproval when you're ready to start home shopping. If you are pre-approved, your lender will provide you with a pre-approval letter on an official letterhead. This official document indicates exactly how much the lenders are willing to offer you, getting you much closer to having your financing lined up. A mortgage preapproval letter gives real estate agents and sellers confidence that you’re serious about making a purchase as well.
Find the best real estate agent
You are already at the right place. You don’t need to look further for real estate agent who shows patience and compassion for all the clients' wants, needs, and general home buying anxieties. I really think homebuying process should be an exciting experience and I specialize in helping my clients to sell and buy homes with the least amount of hassles! So if you are thinking of starting home search let’s connect!