Had it with rentals and roommates and think it's about time you took advantage of low mortgage rates and became a first-time homebuyer? To make that happen, just follow this simple step-by-step plan.
1. Check the selling prices of comparable homes in your area
Do a quick search of actual multiple listing service, or MLS, listings in your area on a number of websites, including the National Association of Realtors.
2. Find out what your total monthly housing cost would be,
Include taxes and home insurance in your cost. In some areas, what you'll pay for your taxes and insurance escrow can almost double your mortgage payment.
To get an idea of what insurance will cost you, pick a property in the area where you want to live and make a call to an insurance agent for an estimate. You won't be obligated to buy the policy, but you'll have a good idea of what you'll pay if you decide to buy. To estimate what you'll pay in taxes, check your property appraiser's website. Just remember that exemptions and the intricacies of local tax law can create differences between what a homeowner is currently paying and what you can expect to pay as a new homeowner.
3. Find out how much you'll likely pay in closing costs.
The upfront cost of settling on your home shouldn't be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items like homeowners insurance or homeowners association fees.
4. Look at your budget and determine how a house fits into it.
Fannie Mae recommends that buyers spend no more than 28 percent of their income on housing. Push past 30 percent and you risk becoming house-poor.
5. Talk to reputable Realtors in your area about the real estate climate.
Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon?
6.Look at the big picture.
While buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there's no landlord to turn to, and these costs can quickly drain your bank account.
7. Prepare for the hunt
If the numbers make sense for you, making these additional moves at the very beginning of the purchase process can save you time, money and aggravation.
8. Examine your credit.
Blemished credit or the inability to make a substantial down payment can put the kibosh on your homeownership plans. That's why it pays to look at your creditworthiness early in the homebuying process. Get your free annual credit report and examine it for errors and unresolved issues. If you find mistakes, contact the credit reporting bureau to make sure they are corrected. It's also a good idea to get your FICO credit score, which will cost you a small fee.
9. Get your docs in a row.
Collect pay stubs, bank account statements, W-2s, tax returns for the past two years, statements from current loans and credit lines, and names and addresses of your landlords for the past two years. Have all of that paperwork ready for the lender. It may seem like a lot, but in this age of tight credit, don't be surprised if your lender wants a lot of documentation.
10. Find lenders and get preapproved.
Getting preapproved for a mortgage helps you bargain from a position of strength when you are house hunting. The institution where you bank and a local credit union are good places to start your search. Applying to multiple lenders in the same month helps increase your chances of getting a loan approved at the best rate possible without dinging your credit score too much.
11. If at first you don't succeed, try, try ... the government?
If you can't find a bank willing to lend to you — and in the current tight credit market, it's possible you won't — consider getting an FHA loan. The Federal Housing Administration has a program that insures the mortgages of many first-time homebuyers. As a result of this guarantee, lenders who might otherwise feel queasy about your qualifications will be more inclined to lend to you. As a bonus, the FHA requires a down payment of only 3.5 percent from first-time homebuyers.
Trust eXp Realty and our team of real estate agents to help you find homes for sale or to sell your current home. We recognize the level of service that the mobile consumer demands. You have information. You have dreams. We possess experience, integrity, and innovation. Together we create leverage to make your dreams a reality.
Curb appeal sets the stage for prospective buyers, it can be their fi
"I would like to thank Kris Morin and her mother Rosemary Hunt Economou
for their superior assistance in selling my condo. They were both highly knowledgeable, professional, friendly, and attentive to my needs. They went the "extra mile" to help me in every way possible. To my amazement, my condo sold just a few days after I listed it with them. I am extremely happy that I chose both of them as my realtors. It was truly a marvelous experience! I would strongly recommend them to any one needing to sell or buy a home. Kris and Rosemary, from the bottom of my heart, many, many thanks, again! "