Resolve to Become a Homeowner
As we approach the end of the year and move into the next, most people take this opportunity to do more than just swap out their cat meme calendar for one featuring the bird of the month. Many are looking back over what happened this past year and setting goals for themselves for 2019. If you are considering becoming a homeowner anytime soon, why not take steps to make that goal a reality? There are some things to consider and steps to take to be a confident first-time home buyer, lets look at a few:
Make sure you can afford a mortgage payment.
For most cities in our area, a mortgage payment is comparable (or sometimes less) than the cost of renting. Having an idea of how much you can afford to spend a month on your housing will be important when meeting with your mortgage banker. Knowing your budget will help set the range of home prices when you start house hunting.
Be sure you plan to stay in your city.
You don’t have to be committed to the area for decades but you certainly would want to stay in your house for a while; five to seven years is the minimum recommended length to live in a house so you are able to build up equity, making it a better investment than if you sold the house after just a couple of years.
Build and understand your credit history.
Many first-time home buyers, don’t have a lot of credit established, don’t fully understand how credit impacts the loan approval, or both. There are many factors found on your credit report that help create your credit score, though some are weighted more heavily than others. While our mortgage bankers are not credit counselors, they can give you an idea of where your credit needs to be approved for a mortgage and help you identify the areas for improvement.
Establish a savings.
Be aware that the down payment is not going to be the only money you will need to obtain a mortgage. There are costs associated with processing the loan and ensuring the home is a good investment; these costs are the home buyer’s responsibility. The costs are not outrageous, but they certainly can add up and if you aren’t prepared for them it can be shocking. The best way to prepare yourself is to have the conversation with your mortgage banker and determine your “out of pocket” expenses including the down payment on the house.