How to acheieve owning a home
Buying your first home can seem like a daunting process. From mortgage rates to taxes to closing costs, there’s certainly a lot to consider. And because your new home will likely be the biggest investment of your life, it’s crucial that you educate yourself about the process before you get started.
The more you know about the home buying process, the more likely you’ll be to get the home of your dreams at a price you can afford. That’s why we’ve put together these six tips for helping you achieve your goal of home ownership.
Know what you want
When purchasing a residential property, you’ll have several options to consider. These include traditional single-family homes, condos, townhouses, and more. Each type of property has its benefits and drawbacks, so before you move forward in the home buying process, make sure you pin down which property type will best suit your needs.
Know where you want
Just like properties have their pros and cons, so do neighborhoods. Before you start checking out homes, decide where you want to live and focus your efforts on that area.
Talk to the bank
Preparing to get a mortgage in advance of your actual purchase will be super important. Before you start looking at houses you should have a discussion with your lender. The lender will be able to give you an honest assessment of what your finances look like, how much house you can afford and what your rates will be. You want to know all of this – what it will really cost you – before you start looking at homes you can’t actually afford. Find out what your monthly payment will be at different amounts and determine what your personal limits are as well. Depending on your credit, the lender may be willing to give you far more than you need. Once you know the time is right to buy a home make sure you get pre-approved by a lender. Make sure you understand the difference between getting pre-approved and pre-qualified for a mortgage. Without a doubt you will want to get pre-approved as a pre-qualification letter is not worth much. A savvy REALTOR® representing a homeowner will pick up on this right away. If you are competing with other buyers and are not financially prepared, you could lose out on your dream home!
Find out what you can afford
Use an online mortgage calculator to see what your monthly mortgage payments would be if you bought a home today.
Look at total monthly costs
Mortgage payments are only part of the equation. Before you buy, you’ll want to figure out what your total monthly housing cost will be, including insurance, taxes and association dues. To get an idea of insurance costs, pick a property, then call a local insurance agent and ask for an estimate.
Figure out closing costs
It’s important not to overlook the upfront cost of closing on your home. Closing costs include lender origination fees, taxes, title and settlement fees, as well as prepaid items like homeowner association fees and insurance.