As you prepare to purchase your first home, there is nothing more valuable than organization and planning. Financially, this can be scary, but with the right team, preparation and research, it’s very manageable. Becoming a homeowner is perhaps the most important life investment for you to make. Here are some ways you can prepare for homeownership:
- Contact a Real Estate Professional. Call me today I am available for phone, in-person, and video conference consultations.
- 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.
- Figure out what you can afford. Generally, your mortgage with taxes, insurance, homeowner association dues are 43% of your monthly gross income. Calculate the costs of homeownership.
- Get preapproved. I will gladly refer you to my strategic lending partners. 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.
- Create your home wish list, then prioritize the features on your list. 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.
- Start saving. Do you have enough money saved to qualify for a mortgage and cover your 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 4 percent of the home price. 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.