Things To Know When You Decide To Buy A Home

Dated: December 28 2016

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Purchasing a home is (for most) the largest investment people make.  Before you find yourself missing out on the house of your dreams, a little preparation can put you in the right position to have the house of your dreams.  Below are a few steps to consider.

1.  Understand your credit scores.  Find out what yours is and how to change it if necessary.  Even if you think your score is good enough, credit score may impact your interest rate or required down payment.  You are always better off with a better score when possible.

2.  Know your budget.  How much of a monthly payment can you afford?  If you choose to use a payment calculator online make sure that the one you use accounts for approximate property taxes and insurance.  Also understand your Debt to Income Ratio (DTI).  According to the Consumer Financial Protection Bureau, The maximum DTI is 43% of gross income.  

3.  Save for a down payment and closing costs.  There are many loan products that have different down payment requirements.  Which of these products that are at your disposal is based on a few factors or combination of factors.  It is important to understand that down payment will impact payment amount and total purchase price you can be approved for.  There are costs associated with obtaining financing that are passed on to you in the form of closing costs.  Understanding what these are can help you prepare for your closing.

4.  Get pre-approved for a loan.  Find the lender that is right for you and obtain a pre-approval letter.  This will show sellers that you are financially capable of obtaining financing for the amount needed to buy the home they are selling.  The pre-approval is not final approval.  That cannot be initiated until after there is a specific property that is to be purchased.

5.  Find an agent.  When interviewing agents consider a few things.  Does the agent exhibit industry knowledge?  Can They supply references?  How will they communicate with you?  Will they be your point of contact or will there be assistants and other team mates involved?  

6. Buy The house you like!!  

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