Each Step Puts You Closer to Closing Day
Like all good things, the right house is worth waiting for. The process of getting from dream house to family home takes time, and there are many steps you have to take if you want to do it right. Here are some important tips from StorageLookup.com to follow along the path to homeownership.
Know What Your Credit Looks Like
Your credit score can mean the difference between buying a home and continuing to lease. Ideally, you want to have a number of at least 600, although your credit score can go up to 850. Usually, the higher your credit score, the lower your interest rate.
Decide How Much You Can Realistically Afford
Another number that you’ll need to have a handle on is your monthly income. This is because you have to determine—as your lenders will—your debt-to-income (DTI) ratio. In an ideal situation, your monthly mortgage is no more than 36% of your incoming cash. You’ll also need to think about your down payment. You can use an affordability calculator to get an estimate on how much you can expect to pay for your mortgage each month. Keep in mind, however, that it’s usually best to err on the side of a lower payment so that you don’t wind up having a place to live but not enough money to enjoy life.
Down Payments and Interest Rates
When it’s time to get a mortgage, you’ll need to think about how much you can afford as a down payment. Although around 7 percent is the average these days, you’ll get better interest rates if you can pay more (repeat buyers, for example, tend to put down 16 percent). If you have good credit, research conventional loan requirements. Conventional loans typically have lower interest rates and give buyers a wide range of down payment options.
Determine If You Want an Existing Home or a Brand-New One
Now, decide if you want to purchase an existing home or have one built. Your budget is going to play a major role in this decision. If you decide to have a house built, you should anticipate forking out between $155,000 and $416,250, though this could ultimately end up being much more depending on the features you want and the materials you use. So, it’s important to take a very close look at your budget to determine which option makes the most sense.
Choose Your Home Inspector and Agent Wisely
When it’s time to get serious about buying a house, don’t go it alone. Spend some time getting reviews and references on real agents. Don’t settle for the first that you find, and take your time to make sure they understand the local housing market.
List Your Priorities
When you are ready, narrow things down by making a list of your priorities. For example, if you currently have one child with plans on another in the next five years, you probably want to stick with homes with enough bedrooms for everyone. Similarly, if privacy is important, make sure your agent is aware of this so they don’t take you to congested neighborhoods.
Begin Your Search
If you have a computer or smartphone, you can start looking at available houses right now. The top five real estate sites are Zillow, Trulia, Yahoo! Homes, Realtor, and Redfin, or simply keep an eye on exclusive listings with your realtor. When you find what you’re looking for, talk to your real estate agent about the type of offer you should make. In some markets, you may be able to offer much less than the asking price; in more competitive areas, however, you may pay more than the original price tag.
Wait for the Inspection and Appraisal
The home inspection and appraisal can change the amount you pay for the home. They can also help you get out of the contract if the house is in bad shape or worth much less than the agreed-upon amount. Always work with expert home inspection services. They’ll provide a thorough and methodical inspection so you’ll have peace of mind when purchasing your new home.
Finally, It’s Time to Close
At the end of your journey is closing day. This is when the home you’ve been waiting for for the last five to eight weeks becomes yours. You’ve invested your heart, soul, and savings into this day, and now you can move in and truly call it your own.
It’s important to protect your home that you’ve worked so hard to get, and a simple way to do that is with the benefits of a home warranty. A home warranty can spare you the stress of high repair costs and save you money to care for other aspects of your home.
Buying your home is an adventure, one that will likely include some ups and downs. However, with some careful planning and help from professionals, you can locate the house of your dreams at a price you can comfortably afford.
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