Whether buying or building, here are some things to do prior to starting down the path to becoming a home owner. As always, there are steps to take in preparing. If you are buying or building a home it is suggested that you interview several Realtors or builders to find the one that can help you the most and you feel comfortable with.
1) Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
2) Develop your home wish list. Then, prioritize the features on your list.
3) Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4) Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs, including taxes, attorney’s fee, and transfer fees, average between 2 and 7 percent of the home price.
5) Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6) Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options, such as 30-year or 15-year fixed mortgages or ARMs, and decide what’s best for you. Ask your Realtor or builder; they will be glad to provide you a list of lenders if you do not have one.
7) Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
8) Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
9) Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10) If buying, contact a Realtor. Find an experienced Realtor who can help guide you through the process. If building, consult a builder. Look for an insured builder who can help you define the process to building a home. The builder can design and assist you with each step of the process.
In conclusion, if you know what you qualify for in the beginning, it will make your Realtor and your builder’s job a lot easier. They can work within your means. There are some great lenders out there who can assist and guide you through this whole process; ask your Realtor or builder for those especially familiar with the area you are interested in.
Information for this article was taken from http://www.realtor.org
For all your real estate and building needs or questions, call Debbie at 830-833-4249 / 713-818-6658 or debbie@ vallonerealestate.net.