A first-time home buyers’ checklist
Buying your first home is an exciting achievement and frightening proposition at the same time. It is one of the biggest purchases you will likely ever make in your lifetime. One that will leave a lump in your throat but will make you proud and happy when you get the keys the first time!
Saving for the down payment is quite a hefty ask, and is something most first-time home buyers struggle with. Here are a few other things to consider before making that big decision.
Renting or buying?
Depending on the market, the loan rates, property taxes and more, it might not be the right time for you to purchase your first home. Use the Trulia.com rent or buy calculator to find out if buying is a sound option for you [http://www.trulia.com/rent_vs_buy/].
If you have debt, including credit cards, student loans, etc, focus your financial resources to paying down or clearing your debt altogether. As debt is a factor in securing a mortgage, the less debt you have, the more you are likely to be able to borrow from the bank, and the more they are likely to lend you as well.
Speaking of banks, when shopping around for a mortgage, banks require you to have a steady source of income to prove you’ll be able to pay off your monthly dues. So whether you’re self-employed or working for ‘The Man’ make sure you can show you’ll be able to stick to your financial commitments.
Study The Market
Take this pre-purchase time to study the market and learn about housing prices in your preferred neighborhoods. Remember, markets fluctuate and by knowing what houses (or condos) are going for and what is going in the market, you’ll be better equipped to jump when you find your ideal home.
Credit Scores Matter
Aside from your debt, lenders will also consider your credit score. A credit score can be elevated by paying off your bills (credit cards, phone, rent, etc) on time and in full. If you cannot afford your bills, you probably need to reconsider home-ownership at this time.
Budgets and Planning
Plan your budget and try to live within it. Play around with the “Affordability Calculator” on Zillow.com [http://www.zillow.com/mortgage-calculator/house-affordability/] to find out what you might be able to afford. Then practice for a few months to see if it’s reasonable or if you’ll be left house-poor. It’s great to say you own your home, but if you can’t afford anything else, it’s not much fun after that.