Ten To-Do’s to Prepare for Home Ownership

Decide what you think you can afford.

Generally, you can afford a home equal in value to between two and three times your gross income, but that is just a very general guideline. There are many online calculators which can assist you with establishing a ballpark and the you can get a more specific idea of your target price range by contacting us or a Charlottesville are mortgage lender in order to…

Determine your mortgage qualifications.

How large of mortgage do you qualify for? Also, do your research and explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you. A capable lender will help you establish
– how much you qualify to borrow
– what the expenses associated with borrowing will be
-what your monthly payment will be and ultimately,
– how much you WANT to borrow in order to feel comfortable with your monthly payment and debt load (which may be less than you qualify for).

Get your credit in order.

Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments. You can learn more about Mortgages, Finance and Credit here.

Save, Save, Save.

Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price. You can learn more by reading our post How Much Cash Do I Need to Buy a Home.

Weigh other sources of help with a down payment.

Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you may be able to use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.

Calculate the costs of homeownership.

This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

Get pre-approved.

Organize all the documentation a lender will need to pre-approve you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements. You can learn more about working with a lender here.

Develop your home wish list.

Then, prioritize the features on your list.

Select where you think you want to live, but stay open minded!

Compile a list of three or four neighborhoods iyou’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.  Having said that, please think of this list as a starting point only: when we work together, we will encourage you to remain open minded about location because there may be appealing neighborhoods which you have not yet considered or which offer you a better value than those you have targeted!

Contact us to discuss the home buying process and how we can work together.

The Front Porch Team can help guide you through the process and may this an enjoyable undertaking, so call/text us at 434.260.0425 to set up a phone call, meeting or zoom or just click here to get in touch.

Some post content courtesy of Realtor Mag