First Time Homebuyer? Here’s what you need to know.

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.

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 dept 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. (Bankrate has a good one that we use with our members.)

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

Don’t let the intimidating process of buying a home 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.