House buying can be incredibly fun. It can also be a bit stressful.  Here’s the good news: you have us.  And we’re nerds about this stuff, so you’re in good hands.  That said, here’s a quick and easy checklist to get your head in the game of being a first-time homebuyer.

1. Figure out what you can afford.   

We know, it’s not as fun as picking out paint colors, but when it comes to a mortgage, it’s the only place to start.  The experts (us, and others) say you should aim for a 36% debt to income ratio.  To calculate, add up your monthly loan obligations and divide by your gross monthly income.

#protip:  If that last sentence induces math paralysis, come see us, we can help.  (Math nerds, remember?)

2. Save for your down payment.

Ugh, we KNOW.  But once you’ve got a realistic goal, evaluate your budget and set up a savings plan. (We’ve got a sweet tool for this.)  You’ll need at least 3% down so your lender knows you’ve got some skin in the game.

#protip: A down payment of 20% will eliminate personal mortgage insurance (PMI) and save you a load of cash. 

3.  Build your credit.

Ugh AGAIN. But if you want a good rate (from anyone, not just us), you’ve got to build it.  Responsibly utilizing a checking or savings account and paying bills on time (every month, no exceptions) can put you on the fast track.

#protip:  Once your debt payments start to shrink, set up an auto-deposit of your extra cash straight into a savings account that will help that money grow, baby, grow. 

4.  Calculate your mortgage payment.

Figure out the purchase price you can afford using a mortgage calculator.

#protip:  Don’t forget to factor in PMI if your loan amount will exceed 80% of the home’s value.  (Again, use our mortgage calculators, or we can help you calculate this pretty accurately.)

Don’t let the intimidating process of being a first-time homebuyer keep you from achieving your goal – you got this! Follow these tips, stop by for a visit, and we’ll help you step by step.