Budgeting Basics for First Time Home Buyers
So you are thinking about buying your first home? What an exciting time!
While I’m sure you’ve got big dreams and even bigger opinions about what you want in your dream home – there are a few steps I would like you to follow before you even step foot into a home. Being prepared every step of the way will ensure your house hunting journey is a smooth and enjoyable process!
Go to your bank or lending institution.
Lenders will use several factors when determining the loan you qualify for. One of the most important factors is your credit score. The interest rate you pay will be tied to your credit score – so having a better one means you will pay a lower interest.
Secure your Pre-Approval in Writing
If your credit score is within range, then you will want to have your pre-approval in writing. Armed with this information you know exactly how much you can afford and are in a position to start looking at houses.
Factor in your Finances
Besides finding out how much you can afford, it’s important to understand how that fits into your monthly budget. Track your income and expenses for at least six months and factor in your monthly payment, taxes, and homeowners insurance. It is recommended buyers spend no more than 28% of their income on housing costs.
Understand the up-front and additional costs
Find out how much you’re going to need to put toward the down payment. Make sure you have enough money for a deposit which you will present with any offer for a house, as well as a down payment.This can range anywhere from 10 – 20 percent of the asking price of the home. Be sure to factor in the cost of a home inspection, moving costs, lawyers fees etc.
Every step you take to make sure you are in a financially stable condition before you purchase your first home will give you a solid foundation for success. If you would like to elaborate on the above points then you are ready for my buyer’s guide. You can download your free copy here and when you are ready to find the home that fits your needs and budget, I’m only a phone call or e-mail away!