1. Determine Your Financial Health
Before you begin your home search and you fall in love with that dream home, you need to assess your financial health. You can review this by determining your monthly income & expenses, your overall savings, determining your credit score, and calculating your Debt-To-Income Ratio. Once you have an idea of these numbers you should develop a budget to give you a understanding of your your affordability range. If you’re not sure about these things, DON’T WORRY, we can help you determine them, BUT FIRST YOU’LL NEED TO GET PRE-APPROVED (see #2)
A good rule of thumb when starting out, is to budget for a home that is 30% of your monthly gross income. Which means you need to consider these housing costs: principal, interest taxes, homeowners insurance and potentially HOA costs. These will vary for each house you research and it’s important to note that purchase price is just one factor that determines these expenses – location, neighborhood, and local market are others that can vary those expenses.
To help determine your costs, check out our industry leading Mortgage Calculator so you can calculate accurately what your monthly payment will be for each home that meets your goals. PLUS IT’S FREE!
2. How Much Can You Afford?
Before you start shopping, it’s important to get an idea of how much you can afford. We often see our First-Time Home Buyers overestimate and even underestimate what they can qualify for and afford. This makes a huge difference when you are home shopping, so make sure to get Pre-Qualified/Pre-Approved Today!
3. What type of home best suits your needs?
You have many options when purchasing your first home you can go with a single-family home, a townhome, a condo and this is just the starting point. Each option you choose has its pros and cons, so we recommend putting together a list of your must haves vs. your wants. This is also a great time to get a Realtor involved. They are the professionals and will be able to guide you on your decisions and offer their expertise to help narrow down your selections. If you don’t already have a Realtor in mind, we have a tight network of experienced Realtors that we can recommend to you.
Once you complete all three steps you are off to the races, but the adventure has just begun. The journey can be complicating, and you may be nervous, so we want to ensure that you are in good hands. Whether you do business with us or not, you can always reach out to us for advice, we are happy to help!
Before you go, make sure to check out these MUST HAVE documents we created for our First Time Home Buyer clients below.
