Buying Your First Home? How to Get Started
Buying your first home can definitely be an intimidating process. But once you figure out how you can get started and move through the process with greater ease, you will understand exactly what needs to be done to close the deal on a perfect house. Whether you are searching for the ideal property in California, you are hoping to purchase one of the lovely Austin homes for sale in Texas, or you’re searching anywhere in between, keep reading for a few helpful tips.
Determine How Much House You Can Afford
Before you can even think about going house hunting with the help of a qualified realtor, you will need to determine just how much house you can actually afford. This will guide you and your realtor in figuring out which homes are worth looking at.
Figuring out your budget for your new house can be tough, but a general rule that you can follow involves doubling and tripling your annual income. Once you have these two numbers, you can start looking at houses within that range. Also, when it comes to calculating your mortgage, experts recommend that your monthly payment not go over 28% of your monthly income.
Don’t Forget About Other Expenses
As you work with a lender to determine how much of a mortgage you can really afford, don’t forget to factor in the other costs of being a homeowner. On top of your monthly mortgage rate, you will also be responsible for property taxes and the costs of maintaining and repairing your property, as well as homeowner’s insurance and other insurance policies, like food insurance, if necessary. You should also consider the cost of utilities and water, as well as the cost of any homeowner’s association fees if you are moving into a community.
Clean Up Your Credit Report
One of the best ways to get a higher home loan and lower mortgage rate is by cleaning up your credit report. Rather than jumping right into home buying, give yourself some time to increase your credit score. In order to do that, you have to first order your credit report and take a look at any areas where your credit could be improved. For example, if you find errors, dispute them. If you have too much monthly debt, focus on reducing it.
Find the Right Lender
When it comes to lenders who deal with mortgages, you have a lot of options to choose from, so never feel as though you have to settle. Look into the many banks and lenders in your area who are offering mortgages to first-time homebuyers. Compare their fees and their rates. Interview several different brokers and then determine which loan product is best for you. Make sure you understand everything thoroughly before signing any contracts.
By following the home buying tips above, you can be a first-time homebuyer who acts like a pro from start to finish. Before you know it, you will be moving into your dream home, and you will be able to rest assured that you can afford it.