If you are ready to get out of the rental market and own a home of your own, you probably researching houses, tips, and advice. However, most people go straight to searching for homes rather than understanding the process. I want all of my homebuyers to be well aware of the process so they feel comfortable and confident.
Here are 10 must dues for all first-time homebuyers.
#1. Find out exactly how much your total monthly housing cost will be.
This is more than just the mortgage; that monthly payment covers insurance, taxes, principal and interest so it's important to understand the total payment rather than just the mortgage payment. Plus, if you have rented for years you'll need to put some money aside for repairs because now it is all you.
#2. Talk to your lender about closing costs.
This is the upfront cost of actually buying the house. This will include all escrow and title fees, access taxes and any prorated fees throughout the year. This is usually about $2500-$10,000 depending on the price of the home. This can be built into the cost of the home as well but it's important to know these fees before you get started.
#3. Take a really good look at your budget.
Affordable housing means that no more than 30% of your income is spent on housing costs. Fannie Mae and Freddie Mac recommends that buyers spend no more than 28% of their income on housing. You might get a great house but if you become "house poor" you may never leave the house again.
This is not the time to give someone a break or use an amateur just because you happen to know them or that there related. You're talking about hundreds of thousands of dollars here and you want to make sure that your money and your transaction is done correctly.
#5. Take a step back about where you want to be in five years.
This is the time to look at the big picture. Do you want to live in the same home for at least five years? About the area the schools, conveniences and commute times. Think everything through to make an informed decision.
#6. If the numbers make sense prepare for the search.
This is a great time to get out there and look at homes because interest rates are still low and there's a lot of inventory in certain areas around the country.
You don't want any surprises when you're sitting down with a lender so it's important to know your credit history, report and score ahead of time. Correct any mistakes and make sure everything is the way it should be.
#8. Collect all your documents.
Lenders will need pay stubs, W-2s, tax returns and bank statements for the past two years. They need to make sure that your income can support a mortgage payment.
#9. Find a great lender and get preapproved.
Shop around for lenders. You might be surprised at how different the fees and costs are from one mortgage broker to another. Your bank may have a mortgage lender on hand but they can only offer you their own rates. Mortgage officers from general mortgage providers have access to hundreds of different loans and programs and may be able to get you a better deal long-term.
There are still ways to buy a home with zero down but it does take creative financing and down payment assistance programs. Talk to your lender about the options that you may have and ways to get assistance in buying for zero down.
If you have more questions please contact me. I work throughout the Columbus Ohio real estate market would love to help you find a home and a mortgage to fit your needs and budget. Come visit me on Linkedin
As a certified Realtor® for the top-rated Columbus Realty Firm - Vision Realty, with 32 years of dedicated real estate experience, I can help buyers, sellers, investors, short sale sellers and more find, sell or invest in the right property, at the right price, at the right time. Contact me anytime for updates and information on the Columbus OH Real Estate market.