Owning a home is a great way to build an investment and see
return on all the “rent” you’re already paying month to month. Right now,
interest rates are STILL at an all-time low. If you’re mortgage ready, take
advantage of this and get yourself a good deal!
1. Look at your budget and determine how a
house fits into it. Fannie Mae recommends that buyers spend no more than 28
percent of their income on housing costs. If you pay more than 30 percent of
your gross monthly income to put a roof over your head, you are living ABOVE your
means. The term “HOUSE POOR” will have real meaning.
Keep in mind: Owning a home is not like renting – you are the landlord.
When it breaks, you fix it. EXPECT unexpected costs. When new appliances, roof
repairs and plumbing problems pop up; these costs can drain your bank account.
2. Go to a bank or lender to get
pre-qualified. This initial step allows you to assess any goals or needs you
may have regarding your mortgage with your lender. From here, you can learn about
your various mortgage options and the type that might be best suited to your
situation.
Keep in mind: Being
pre-qualified is NOT the same as pre-approved. It is strongly advised that
those seeking homeownership do not house hunt until they are pre-approved,
which is much more extensive.
3. Find a realtor once you are
pre-approved and set on what you can afford. Meet with a few agents, to find
one you feel confident with. An agent who is a member of the National
Association of Realtors is a good sign as they adhere to a strict ethics code.
Keep in mind: A good real estate agent can help guard
against any pitfalls you may encounter during the process, so choose wisely.
4. Know and understand the various
mortgage products available to you. Factor in closing costs you can afford.
This will help you choose the best mortgage program for you. As a first time
homebuyer, options may be available to you, such as low interest programs and
down payment assistance.
Keep in mind: If you plan to
move within five to 10 years, an adjustable-rate mortgage (AMR) could be
beneficial. However, if plans change and you stay in your home for longer, you
may be stuck with payments you can’t afford.
5. Try to hold off on big purchases or any
decisions that could affect your credit once you’ve signed a contract and a
closing date is set. Typically, lenders pull credit right before closing to
make sure nothing has changed with your financial situation.
Keep in mind: If you feel
over-stressed, lost, or uncomfortable with the homebuying process or any part
of it, don’t be afraid to ask for help. The Homeownership Resource Center, a
division of Family Services, Inc., not only offers help and guidance, but piece
of mind.
To
learn more about the workshops and individual appointments we provide with our
licensed homebuyer coaches, contact us at 843.735.7862 or info@fsisc.org.
Written by: Revena Dawson, Home Purchase/Credit Advisor, & Sarah Cornwall, Marketing Rescources, at Family Services, Inc.
Written by: Revena Dawson, Home Purchase/Credit Advisor, & Sarah Cornwall, Marketing Rescources, at Family Services, Inc.
