Purchasing a home can be a little intimidating for some people whether it’s your first home or not. The best way to relieve that anxiety is to be confident you’re purchasing the best home at a price you can afford with the most favorable financing. These seven steps will help you make smart decisions about your biggest purchase.
1. Decide how much home you can afford.
Generally, you can afford a home priced two to three times your gross income. Remember to consider costs every homeowner must cover: property taxes, insurance, maintenance, utilities, and community association fees, if applicable.
2. Develop your home wish list.
Be honest about which features you must have and which you’d like to have. Handicap accessibility for an aging parent or special needs child is a must. Granite counter-tops and stainless steel appliances are in the bonus category. Come up with your top five must-haves and top five wants to help you focus your search and make a logical, rather than emotional, choice when home shopping.
3. Select where you want to live.
Make a list of your top five community priorities, such as commute time, schools, and recreational facilities. Ask Howie Boeve to help you identify three to four target neighborhoods based on your priorities.
4. Start saving.
Have you saved enough money to qualify for a mortgage and
cover your down payment? Ideally, you should have 20% of the purchase price set
aside for a down payment, but some lenders allow as little as 5% down. A small down
payment preserves your savings for emergencies.
5. Ask about all the costs before you sign.
A down payment is just one home buying cost. Howie Boeve can tell you what other costs buyers commonly pay in your area — including home inspections, attorneys’ fees, and transfer fees of 2% to 7% of the home price. Tally up the extras you’ll also want to buy after you move-in, such as window coverings and patio furniture for your new yard.
6. Get your credit in order.
A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. The minimum credit score you can have to qualify for a loan depends on many factors, including the size of your down payment. Talk to Howie Boeve or a lender about your particular circumstance.
7. Get prequalified.
Meet with a lender to get a prequalification letter that says how much house you’re qualified to buy.
Make sure to check Howie Boeve and Associates post tomorrow for what we recommend that you get together prior to meeting with your lender.
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Article Source: buyandsell.houselogic.com