Most Americans want to live the American Dream, which means for many owning your own home. With the economy stagnating and the home ownership rates at a 15 year low, the first question is, am I ready to buy NOW?
The following questions should help you clearly understand the buying process, and what you need to do to get ready. Nothing is more upsetting than finding your dream home, and then finding out that you cannot buy it. These tips should help you to avoid pitfalls.
- Go to a reputable bank or mortgage broker, and get qualified. That simply means, find out how much house you really can afford to buy.
- Ask as many questions as you need to, in order to understand the mortgage process from beginning to end. If you don’t understand something, ask again. If the mortgage lender is not happily compliant, please take your business elsewhere. Ask the lender to let you know what you haven’t asked that is important.
- Make sure you ask about all fees you will be charged, such as points on the loan, bank costs, etc.
- Make sure you have at least 8 months of reserves in the bank. Some lenders require 6 months reserves before approving a loan.
- Make sure you will be able to pay your mortgage, insurance, utilities, taxes, and daily living expenses if you unexpectedly lose your job.
- This is a great time to learn how to budget, and save for the American Dream. Are there any expenses that you could cut or lower?
- Find a good real estate attorney to represent you.
- Get your savings and retirment accounts in order. If you have several (employers) 401ks and Roth IRA’s, its worth consolidating them in fewer, more managable investments and make them work for you.
- Check your credit score and improve it if needed. One great way you could get started right now, is to call your credit card company and ask them how they can help.
- After you have been qualified, seek out a good real estate agent to help you with the buying process.
But with all the excitement, keep in mind: Do not purchase any property above your means.
We provide you with great financial tools to calculate your mortgage payments, closing costs and affordability of a property in the sidebar. If you have any questions, please contact us and we are happy to help you.
Good luck and you will be glad you did it.