Buying a home can be an exciting and a scary experience. With a little financial homework and pre-planning, the process can be a smooth one. Follow my 5 tips to buying a home.
- Check your credit score. A low credit score can hurt your chances for getting the best rate, or get financing at all.
- Set your budget. Analyze your assets and liabilities. Study your bank statements to see what your spending habits are and budget what you can afford comfortably, for a monthly mortgage. The rule of thumb is to aim for a home that costs about two-and-half times your gross annual salary.
- Save money. You will need to have some cash for a down payment, closing costs and other surprises. Lenders typically like to see 20% of the home’s price as a down payment. Other options are available depending on your situation.
- Get pre-approved for a loan.The best way to prove to the seller that you are a good candidate is to have a prequalified loan from a lender.
- Find a home.Make a list of your top needs. Remember, it is rare to find a house that will meet all those needs, but the best part about owning a home is that you can make it meet those needs in the long run.