Your Home Buying Checklist
1. Determine How Much Home You Can Afford
Start by determining a budget. By identifying a realistic budget, you will have a firm understanding of your price range. One way this helps can be getting reapproval. Getting preapproval early on can help you out what your buying budget is and help you set realistic goals.
Here are some ways to determine how much home you can truly afford:
Calculate your Debt to Income Reatio. Your debt to income ratio is your monthly expenses versus your monthly cash intake. This includes all the bills you have to pay, divided by your gross monthly income.
When you consider your debts, include any recurring bills that you pay on a monthly basis as student loans, car payments, child support payments – anything that you pay on a monthly basis.
To secure a qualified mortgage from most lenders, your DTI should be no higher than 43%. But remember, that’s the “outside” number you can spend – and it doesn’t mean that you necessarily should.
Building a budget will allow you to find your dream home with no extra financial stress.
2. Save For A Down Payment
It is important to make a significant down payment. Making a good sized down payment can save you money in a few different ways including:
A down payment of 20% or more will exempt you from private mortgage insurance (PMI). The cost of PMI coverage is determined on a number of different risk factors, such as your DTI and credit score.
A larger down payment often results in a lower interest rate because it decrease your lender’s risk.
The bigger the initial payment , the less interest a borrower will pay over the life of the loan.
A larger down payment decreases your monthly payments.
3. Find A Real Estate Agent You Can Trust
Finding the right real estate agent is essential.
Real Estate agents help you find potential homes, provide expert knowledge on the real estate market in your given area and can help guide you with many steps throughout the home buying process.
Real estate agents can help provide guidance on a variety of different things including:
Sizing up the pros and cons of homes
Advice on pricing
Knowledge about neighborhoods
The mortgage and preapproval process
Negotiations
The inspection process
Paperwork and the closing process
At Lenox Realty LLC, we help our customers and clients through the steps of buying a home. We are always looking out for your best interest and try to make it as stress free as possible.
4. Get A Mortgage Preapproval And Choose A Lender
Shopping for mortgage lenders can provide many benefits during the home buying process. Getting reapproval on your loan can show the buyer that you will be able to buy the house if you make an offer.
It is often best to ask a variety of lenders to see what loans they offer. This allows you to find the best loan for you!
5. Find The Perfect Home For You
For some home buyers, finding their dream house can be exhausting.
Looking online is a great place to start so you can understand your non negotiable for your dream home. Another great way is driving around the area you are looking to buy in and check out any houses that are listed for sale.
Real estate agents can narrow your search by using MLS to provide with you with timely and accurate information.
6. Making A Purchase Offer
Helping you make a smart purchase offer on the right home is where your real estate agent will shine. Make sure to consult with them when deciding how much to offer for a particular home.
Consulting with your real estate agent is critical when deciding how much to offer for a particular home or property.
Real estate agents can give advice on the housing market, the length of time the property has been on the market and if there are existing offers on the house.
7. Scheduling a Home Inspection
Hiring somebody to preform home inspection is critical when buying a house. Home inspectors can reveal problems that are not apparent to the eye, or that you might not have seen.
Getting a home inspection can help you avoid future problems with the house and sometimes can help you negotiate the purchase price of the house.
Often real estate agents can provide a list of trusted inspectors for you to choose from.
Buying a your dream home involves many steps. Our agents at Lenox Realty are here to help you and give guidance every step of the way. Contact us today at 970-580-7261 to work with our dedicated agents to find your dream home!
Read the in depth reference article from Rocket Mortgage.