Are you tired of renting and ready to strike out on your own? Are you ready undertake the adventure of buying a home? Before buying, there are a few steps you should take into consideration in order to have a smooth transition from renter to homeowner.
Get your finances under control.
Buying a house will be the single, largest purchase that will be made for the majority of people today. It represents a risk for potential moneylenders so you want to appear to be as safe of an investment as possible. Pay your bills on time, this includes everything from credit cards to rent. You want to have a favorable credit history before you begin looking at houses for sale. Don’t take out any new credit cards or finance a new vehicle. The less debt that you carry, the better the chance of securing the loan that you need. Start saving money now. You want to be able to build up as big of a down payment as possible so you can avoid pitfalls such as having to pay mortgage insurance. You will have to prove to a lender that you can afford mortgage payments, so having your finances in order will go a long way to achieving this goal.
Determine how much you can spend.
The fastest way to estimate how much money you can afford to spend when buying a home without being unreasonable is to multiply your annual salary by three or multiply it by four if you are comfortable spending a little more. If you make $60,000 a year then you should start looking at houses for sale that is between $180,000 to $240,000.
Figure out how much you can put on your downpayment.
The more you can spend on a down payment the more expensive of a house you can afford, or it could reduce the amount of your monthly mortgage payment. In order to avoid paying mortgage insurance, your best course of action will be to pay 20% of the cost of the house as your down payment. There are also many other options such as lender-paid or discounted mortgage insurance, including policies from Fannie Mae and Freddie Mac.
Start looking at real estate listings.
Get a jump on things by figuring out exactly where it is that you want to live. It will help you pinpoint a price range. In addition, you will be able to investigate the schools, public transportation, amenities, etc.
Attend open houses.
When buying a house it is essential that you get a feel for the property. The best way to do that is by visiting open houses. A walk through can let you know if this is really the place for you or not. Try to keep it to houses in your price range as you might fall in love with a property that you can’t quite afford.
Find a realtor.
You have narrowed it down to the houses that you are interested in, you have your down payment secured, and you are pre-approved. The only thing left to do now is finding a realtor to help you with buying a house. The right real estate agent will give you reliable guidance and advice when it comes to finally purchasing the property for sale.
As the saying goes, “If you fail to plan, you plan to fail.” This is especially true when investing in something which you might be spending the rest of your life. Since you are spending your hard-earned money in this, you want to be sure that this is something you can finish. So take your time and make careful consideration when buying your home. Great things take time, and that includes your home.