There is no place like home. For Americans, buying a home is an exceeding popular way to lock in your housing costs while simultaneously creating wealth in the long-term. More people own a home than are invested in retirement plans or stocks and bonds combined. So now that you’ve decided to join the ranks of the homeowner, there are some important tips to help you get to your goal.
Credit and Qualifying for a Mortgage
Most buyers require a mortgage for their home purchase. Even if you can afford to pay cash for the home you want, it doesn’t always make sense to do so. Mortgage rates have been hanging around at historic lows for a number of years now and will do so for a while longer. The government allows for deductions on mortgage interest, as well as some costs associated with a purchase so a mortgage is a sensible way to purchase. The key to getting a great mortgage is to make sure your credit is as strong as possible. A good mortgage professional can give you tips to help you achieve your mortgage goals tailored to your personal circumstances. Choosing the right mortgage person is key. They should be able to explain their process and what you can expect in a way you understand. If you don’t understand, ask questions. If they don’t want to answer your questions, find a different mortgage professional.
Budget and Down Payment
Now that you have made sure you can get the best possible terms on the mortgage, it is time to find out exactly how much home you can afford. First, you should know what size down payment you can afford to put toward the purchase and what the anticipated additional costs of the purchase will be for inspections (escrow fees, etc). Next, there is a ratio known as DTI, this is your debt-to-income ratio. Most banks prefer that your debts, which are all of your loans and credit cards as well as the anticipated mortgage, be below 43% of your gross income. This will ultimately let you settle on the anticipated price range of the home you will search for. Once again, a capable and attentive mortgage professional can guide you through this process.
If you are already familiar with the area you are planning on buying in, this can be a fairly simple process. But if you are moving out of area or want to be sure to get the most for your dollar in a neighborhood, there are a few important criteria to consider.
Parks and shopping within a close proximity tend to be a boon for value. Also, regardless of whether you have school age children, the quality of the schools that service a neighborhood can drive up values as well. Then consider your lifestyle. Do you need freeway access close by? Do you need to be walking distance to a Starbucks? Are there neighborhood groups or organizations you are interested in, or want close by? By prioritizing your wants and needs, you can come up with neighborhoods that best suit you. Once you have the neighborhood, then it is time to find a home.
The Right Home for You
This part often seems obvious, but after you look at a house or two, or ten, or hundred, often you can feel overwhelmed and lose track of what you really want. So before you get out there, have an idea of what you really want. The number of bedrooms and baths are important. A yard for a dog maybe. If you cook, the size of your kitchen and stove, as well as their arrangement could be important. A fireplace can be nice, three of them could be better. Make a list of what is important to you and take it with you when you go to look at places. Check the boxes on the items each home has, sometimes it is tough to remember all the details of a home after you leave. By doing this you can find the home that will work the best for you in the long run rather than the one you liked the best that day.
The Right Agent for you
While going through this process, it is important to have a professional to assist you that are looking out for your best interests. A great realtor can help supply you with the information you need to make the best choices and will keep you informed about all your options, so that you can know what will work the best for you. At the Buss McKinley Group, we are dedicated to providing the highest level of service possible to our clients. If you have more questions about what a great realtor can do for you, please contact our team.
Written by Nelson Buss