First rule of home buying club...(Call Me)
It's been a little to long since my last post but I've been busy working with buyers and they certainly got my juices flowing for the things you need to know before you take the plunge into home ownership! If you are a first timer the home buying process can seem daunting! It doesn't have to be. The Most important thing to be when buying a home in my opinion is educated..and not the HGTV kind of educated. Don't get me wrong...I LOVE HGTV, but more for the same reason people love real house wives of "whatever" county or wrestling. It gives you an opportunity to watch something that is silly & mundane. It's not at all realistic, especially in this market.
First things first, (Call Me) Then get real about your finances!
Check your credit (freecreditreport.com) <---- go there, sign up, be informed or better yet call a loan officer. This is the most important thing you can do for multiple reasons, even if you are not buying for another 6 months.
1.) If you have an unexpected flag on your report it could take a bit more work on your part to get your credit in order before a lender is willing to qualify you for a mortgage.
2.) It shows a potential seller you are serious if you are already prequalified and most times a letter is expected to accompany any offer you may write. If you were a seller would you want a random person traipsing thru your home not even knowing if you can afford that home..? I think not. Besides, it never fails, I take you out to look at homes and you fall love with something but can't get the letter just yet and you lose the house to another buyer. This is heartbreaking for you and me as an agent. So I require everyone to be prequalified before we even look at the first house. It's just the right thing to do.
3.) How much you qualify for and how much you can afford are two different things! Even though banks are up against stricter regulations when qualifying buyers, you still often qualify for more than you can realistically afford. You have to remember it cost more than a mortgage payment to maintain a home. This is were the term "house poor" comes into play and you don't want to be in that position. The "professional" rule of thumb is your mortgage payment shouldn't be more than 28% of your yearly income. For example: If you have a yearly income of 60,000 your payment should be $1400(28%) but I think it should be more like $1000 which is 20%. Only you know your real spending habits so don't ignore that. Lenders don't factor in those daily latte's or vacations and such. Plus it will cost you at least 1% of the sales price a year just to maintain your home on top of monthly utilities. Be smart, Be realistic, Be house happy!
Stay tuned for more experts tips for buyers