Investment Consulting

Monday, February 24, 2014

Buying Process - Here Are Few Things To Considerere

Buying Process - Here Are Few Things To Considerere


Buying a home may be a great option and a good long-term investment, but only if you’re ready for the financial commitment and responsibility of home ownership. Buying a house is the largest financial investment you will probably make, so you want to make sure you’ve done your homework and are prepared to take that next step.




What can I afford?

You’ll first need to determine what’s affordable. Keep in mind, when you’re buying a home, you’ll have upfront costs—down payment, closing costs—and you’ll need to be prepared for these expenses. We’ll go through more details in the Qualify for a Mortgage section and you can use our Mortgage Calculator to help estimate what you can afford.

Where do I want to live?

It’s helpful to narrow down your search to the key neighborhoods where you want to live. Keep in mind, you may need to expand your search (based on what’s affordable for the area), but it helps to have a starting point. If you have children, check the available school options in your area.


Buying Process - Here Are Few Things To Considerere


What do I want/need?

Make sure you have a good idea of what you’re looking for in a new home and prioritize accordingly. There are many quality and affordable homes—from townhomes and condominiums to single-family or multi-family homes—so make sure you conduct a thorough search. You may not be able to get everything on your wish list, but knowing what your requirements are before you get started will make your search easier.

What do I need to start?

Before you get serious with your search, you’ll want to find a real estate agent and get your financing in order. We’ll go through these steps in detail, but it’s a good idea to start gathering your financial records (Pay Stubs, W2s, Bank Statements, etc.) and have them ready. Have a co-borrower? Their information will be required, too.

How much do I need to put down?

Most lenders prefer a down payment of 20%. However, that’s not always feasible for every homeowner. Check with your lender about mortgage programs that may allow for lower down payments. For example, the Federal Housing Administration (FHA) requires as little as 3.5% down. One important thing to note, if you do not make a down payment of at least 20%, you may need to pay what’s called Mortgage Insurance each month until you reach 20% equity in the home.

What about my credit?

You should take a look at your credit report before you start the homebuying process. This is the time to clean up any past issues and make sure there are no inaccuracies or mistakes. To qualify for a mortgage, you’ll need to meet the lender’s credit qualifications (which may vary by lender but you typically need a minimum credit score of 620). If you’re not in that range, you may need to spend time rebuilding your credit or come up with a larger down payment (i.e., 10% vs. 3.5%).

Share This