The time has come when you decide to take the plunge to purchase your first property. It can be an intimidating process if you do not know where to start or too overwhelming that you push it off until later. We’re here to help you take those steps forward by sharing 5 tips on where to begin when starting your purchasing journey.
Check your Finances
The most important step before you begin looking at properties is to check your finances. It is important to know where you stand when it comes to your debt-to-income ratio. You can also use one of the easiest ways to calculate a homebuying budget using is the 28% rule, which dictates that your mortgage shouldn’t be more than 28% of your gross income each month. Remember, homeownership involves a variety of continuing costs, including insurance, property taxes, and repair/upkeep expenses.
Learn the Mortgage Process
The best way to learn the mortgage process is to find a step-by-step guide that explains it in greater detail. Most mortgage brokers will look into your income & job history, credit score, debt-to-income ratio, assets, and the property type you are interested in.
Get Pre-Approved Before You Start Your Search
The first step in this process to get pre-approved is to start by filling out a mortgage application and supplying your Social Security number so that the lender can do a credit check. Going through the pre-approval process with multiple lenders allows a homebuyer to shop mortgage rates and find the best deal. You can also count on a seller wanting to see a mortgage pre-approval letter and, in some cases, proof of funds to show that you, the buyer, are serious.
Research the Neighborhood You Want to Live In
Once you receive your pre-approval letter, it’s time to find the neighborhood you want to purchase in. You can work with a broker directly to see what area you are interested in. It is important to find a broker who you can trust and who will achieve your wants and needs in a property.
Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’
Finally, it is important to consider what you need in a property and what you would like in a property. Before you start your search, list all the features of a home you would like and then qualify them as ‘must-haves’, ‘should-haves’, or ‘absolute-wish list’ items. This will help keep you focused on what’s most important.