A home is the most expensive purchase many people will make in their lifetime.
- Where do you start?
- What do you need to do?
- How much cash will you need?
- What kind of mortgage can you afford?
Purchasing a home can be a bit overwhelming if you haven’t done it before. Most people cannot just whip out a credit card and charge a house. It’s also not like buying a new car at the dealership where you’re done in a few hours. Home purchases (no matter what the purchase price) are involved transactions that require a bit of homework before jumping into.
Where is the best place to start? Talk to a trusted mortgage lender. Most new home builders have an established relationship with a mortgage lender who understands the process of buying these homes. A good mortgage lender will be able to take a look at your debt-to-income ratio as it currently stands and tell you how big of a loan you could qualify for. If the initial loan amount you are given is not high enough for the area you are looking in or the type of property you want to own, then you know you need to either increase your income or decrease your debt.
If you already know that you will have to work on your credit score as well, ask your mortgage lender if they have referrals to credit repair counselors you can speak with.
Mortgage lenders are the best source for information about available loan programs. They will be able to give breakdowns on monthly mortgage payments (including taxes and insurance) and estimates on down payments needed. A good lender is the best resource to help begin to prepare for purchasing a home.
Create a budget. Owning a home is not the same as renting a home. Instead of relying on a landlord or property management company to fix certain issues homeowners need to plan to tackle unexpected costs as well as general maintenance. These costs may include: replacing appliances, water, sewer, trash, lawn care, pool upkeep, replacing the HVAC or the roof. Remember, when you purchase a new home there is a home warranty in place to address several of these expenses.
Taking a look at real expenses will help in deciding how much of your monthly budget you are comfortable spending on a mortgage payment.
Arming yourself with knowledge and creating a sustainable plan will not only greatly assist in attaining the dream of owning a home but it can also help eliminate some of the stress associated with making a large purchase. Both of these will allow you to enjoy your home for years to come.