Buying a home is a fantastic and rewarding enterprise, and most people cannot wait for the opportunity to stake their claim on their perfect home. It would be disingenuous to proclaim that buying a home is easy for everyone, or that there aren’t a lot of ups and downs that could occur at any point during the process.
For many buyers, purchasing a new home is relatively painless, but that tends to come from previous experience navigating the waters of buying real estate. Often first-time buyers have a harder time figuring out the steps, procedures, and pathways to homeownership, but that doesn’t have to be the case for everyone.
When it comes to your first home, there are a lot of exciting things to look forward to, and that should include the buying process itself. Half of the battle that first-time homeowners face is not understanding what it takes to complete a home purchase, often discovering their options along the way.
To make a home purchase process move smoothly, you first need to do some hard work to put yourself on the path to homeownership. Follow these eight tips to become a no-nonsense, house-finding pro in no time at all.
Get Your Credit in Order
A lot of people are confident that their credit is great without ever taking the time to check their credit score. It is imperative that you not let the first time you hear your credit score be when you are sitting down with a potential mortgage lender. Establishing your credit viability early on, and making any necessary adjustments to build a better credit score, is a critical step in simplifying the home buying process.
Find Your Down Payment Number
You may not know exactly how much money you will need to put down as a down payment on a house, but you should have some idea of what that number will mean to your future financial standing. Your down payment amount not only affects your home buying budget but also how well your family’s budget will do after you buy a home.
Balancing your bank account is easy when you have substantial savings, but what happens when you drop a significant portion of your hard-earned cash on a down payment? Deciding how much you can reasonably afford for a down payment goes beyond what you have set aside. Your overall budget will need to adjust and reflect that home deposit, so make sure that it is a number you can live with.
Calculate Your Monthly Home Costs
Before you start the search for the home of your dreams, you need to be realistic about how much you can afford the month to month. Financial professionals recommend that a healthy home budget should maintain a house payment of 25% of your total monthly income, and certainly no more than 30%.
Remember that this number should include your monthly taxes and insurance costs as well as your mortgage payment. When you meet with a potential mortgage lender, have this number in mind, and be sure to let them know that it is your maximum price point when negotiating rates.