9 Must-Do’s When Buying Your First Home
Tired of renting? Eager to scope out the market? Well hold your horses just a sec. Jumping the gun isn’t the best route to take when buying a home, especially if you are a first-time home buyer.
Below we have compiled a list of the essential steps to take before buying your first home.
1. Scope your area and check out the selling prices of comparable homes. You can go about this the old fashioned way on foot, but we suggest using a multiple listing service such as the National Association of Realtors.
2. Use our mortgage calculator to get a ballpark figure of what your monthly mortgage payment would be for the type of house you have your heart set on.
3. Calculate monthly housing costs, such as taxes, homeowner’s insurance, and HOA fees if they apply. Keep in mind that these extra payments could almost DOUBLE your mortgage payment, so be sure to factor them into your budget.
Related: 5 Benefits of Owning a New Home
4. Get an estimate of what you’ll pay in closing costs. These costs include origination fees charged by the lender, title and settlement fees, taxes and other prepaid items, such as those listed in step 3. An annual closing cost survey can give you a good idea of what this cost will look like.
5. Take a good, long look at your budget and determine how a house factors into the equation. The general recommendation is no more than 28% of your income on housing costs. Anything past 30% and you risk becoming house poor.
6. Chat with a few reputable Realtors in the area to asses the real estate climate. You will find that real estate agents can be a wealth of knowledge and resources. They can tell you if they believe prices will continue to fall or if they think they will start to rise, based off current trends in the market.
7. Determine your credit score. A low score combined with the inability to pay a substantial down payment could make it difficult for your to secure a lender. Looking at your credit early will allow you to take preventative action and look for unresolved issues. If you find mistakes, contact the credit reporting bureau and make sure they are corrected immediately.
8. Have your documents ready to show to the lender. You will want to collect pay stubs, bank account statements, W-2s, tax returns for the last two years, statements from current loans and credit lines, and names and addresses of your landlords for the past two years. It seems like a lot, but it can make a difference in an age when credit is tight.
9. Get pre-approved. This will help your bargaining position when you settle on a house you like. Start with the institution where you bank and other local credit unions. Applying to multiple lenders will increase your chances of getting a loan approved at the best rate possible.
Bill Beazley Homes specializes in building superior quality new homes at a great value. For information about new homes in Augusta, GA call Bill Beazley Homes today at 706-863-4888 or contact us here.