Thinking about buying a house but not sure where to start? Getting into your own home is a big step, but if you follow some trusted guidance you can make the process much easier and step over the threshold into your new home that much sooner.
1. Make A Budget
Now is the time to make a budget if you do not already have one. Don’t forget to include your household expenses when considering how much house you can afford.
2. Determine What You Can Afford
A common rule of thumb is that your monthly mortgage, taxes, and insurance should not be more than 35% of your income for the month.
3. Check Your Credit Score
Home loan lenders use your credit score when they set your interest rate and borrowing limit. Credit scores range from 300-850. Home loan lenders like scores that are above 740, but may accept lower scores. Correcting credit report errors early in the process will help your credit score and could make the home loan process easier.
4. Get Prequalified by a Lender
Getting prequalified can be helpful, but your lending might prequalify you for more than you calculated in step 2. Make sure to stick to your budget so that you do not buy something you cannot afford in the long run.
5. Explore Where You Want To Buy
It can be helpful to explore the area where you want to buy so that you can see what different neighborhoods offer. Consider making a list of the traits you want in a neighborhood to help narrow your search.
6. Find A Real Estate Agent
Your real estate agent can help you find a home that is perfect for your needs and budget. If you don’t know a real estate agent, ask your friends or family for a referral.
7. Select The Right Home For You
While there can be many pressures during the home buying process, make sure that the home you select will meet your budget goals and is the right home for you.
Having trouble calculating how much you will need to borrow to purchase a home? There are many mortgage calculators online that can help you, even if you have a limited amount of information to start.