By Paul Adede
Buying your first home is an ultimate measure of success and one of the biggest financial steps that you will ever make. It is therefore crucial to take this decision seriously and this involves taking time to prepare yourself in every aspect. Here are some of the basic steps to follow;
Establishing if you are Ready to Buy a Home
The very first step is to determine if you are ready to buy a home. Establishing your readiness begins with getting out of debts and engaging in consistent saving. Home ownership is a lot more expensive than renting when purchasing. You may be under pressure to buy a home from family or friends, but you should take your time and wait for the right time when you have substantial savings or adequate cash flow that can enable you secure a home loan. If you are not sure you can afford a home, try sticking to a budget with what you expect your home payment will be and put the extra money in savings. This can build your confidence and your savings so you can move forward with the home purchase.
Find Best Payment Options and Loan Types
For aspiring home owners who don’t have enough cash to buy a house upfront, then it is important that after determining your readiness to buy a home you begin to shop for a loan. You should first get prequalified and preapproved for credit when considering mortgage financing. It is advisable that you contact at least three different financial institutions and get one with suitable terms. When it comes to mortgage you may be surprised at the different loan types and payment options available. If you are seeking over 80% financing, then usually a fixed rate of 15-20 years loan is the best option. This can help you lock in a low rate. You should be careful when you make your loan choice to avoid hurting yourself financially with the wrong choice. A down payment can help you avoid falling into financial constrains associated with loan payment.
Be Honest about what You can Afford
It is crucial that you determine a home worth how much that you can actually afford. A good rule of thumb is to keep your mortgage along with your taxes and insurance between 25 and 30% of your income. Financial experts advise that your home cost be limited to two and a half times your annual salary. If you spend too much on your mortgage you may not be able to meet your daily obligations let alone save for retirement. A smaller house is worth the peace of mind. If you are carrying debts then you should keep your house payments on the lower end of that amount.
Find a Good Realtor
Once you have determined how much you can really spend and are pre-approved, you should find a good realtor. Your realtor should listen to your wants and needs carefully. Most realtors may make recommendations and explain the market and payment terms to help you find a home that suits your needs and that perfectly fits your budget. Superior Homes has one of the best realtors and offers a variety of homes with different budget range.