Buying a home is undoubtedly one of the most meaningful decisions of your life. If you find yourself heading towards this milestone, you’ll probably be extremely excited but apprehensive at the same time. It can be challenging to stay prepared when you have so many things to consider. You might have tons of different questions in your mind, and we’re here to help you with all that. Follow our checklist below for a smooth process to buying your own house.
Check your DTI
Your DTI is your debt to income ratio and shows mortgage lenders if you can afford the house you’re planning to buy. Most of us can’t afford to buy a new house upfront, so we have to take loans. Typically, your DTI shouldn’t exceed 36-43%, and this means that the maximum amount of your income going towards debt repayment shouldn’t be more than 43%.
Save up for the down payment.
Even if you’re opting for a loan on your new house, you still need to pay a down payment which can be a significant amount. Furthermore, the higher the down payment you pay, the lesser you’ll have to give every month in terms of mortgage repayments. So, start saving up and consider how you can free up some additional funds for a down payment of at least 20%.
Find loan programs and get approved.
Once you’ve covered the steps mentioned above, you can start the actual buying process. The first step is to find a loan program by doing your research. Doing extensive research means you can find the best payment rates with low interest. After you’ve found the best loan option, provide your mortgage lender with your financial information so that you can get approved and start the buying process.
Consider your needs
Buying a house isn’t as simple as strolling into a neighborhood and picking out the prettiest home. Instead, you need to consider how much space you need, the distance of the location from your work or school, to name a few. Consider how much you’re willing to spend, as well as how long you want to stay in that house for, and communicate your needs to an agent.
Hire a real estate agent
Buying a home on your own, especially the first time around can be a daunting process. You might not know which factors you need to assess when inspecting a house. This can make it easy for sellers to scam you and get you to pay a much higher price than the home is worth. Make sure you work with a trusted agent who can help you find the best buy in your budget. Once you’ve found your dream home, pay the deposit and prepare to move in!
Conclusion
First time home buyers have to start preparing months in advance and have to consider a wide range of factors. This helpful checklist will let you get your priorities in order so that you can get every task done in time and buy your dream house fast.