Although buying a new home is a big step, it can be the realization of a long-held dream and the beginning of a whole new life. But it can also be, and sometimes is, a big disappointment and/or a decision you regret for many years. Still, if you do the right first things first, buying your first home is more likely to be an exciting adventure and new life chapter. So be sure to check out these 5 things to do before buying your first home in Floresville.
1. Determine What You Can Actually Afford
The first thing you should do before buying your first home in Floresville is to sit down, put pencil to paper, and figure out how much home you can actually afford. One of the biggest and most common mistakes first-time buyers make is buying more than they can afford. You never want to be house poor. That is a way to add stress to your life.
Real estate pros recommend that you spend “no more than about 30% of your take-home pay on housing. Keep in mind that this 30% encompasses more than just the sticker price of the home: It should include all related costs, like mortgage interest, taxes, insurance, maintenance and any renovations you might want to make.”
Another good tactic in determining affordability is to use the same guideline mortgage lenders use to assess your borrowing capacity: the 28/36 rule. This rule “says that you should spend no more than 28% of your gross monthly income on housing costs and no more than 36% on total debt, which includes housing and other debt like student loans or car loans.”
If you’re not sure about all the “hidden costs” involved in buying your first home in Floresville – what they are and how much they are – talk to your local real estate agent. Your Floresville agent can help you out with such things as property taxes and maintenance costs. To find out more about this, call (210) 216-7722.
2. Work on Your Credit
After figuring out what you can afford, your next step is to get your credit in as good a shape as possible. Getting a mortgage requires a fairly decent credit score, so check your credits reports now – keeping a sharp eye out for any errors. There is a website called MyFico.com which really helps more than the advertised ones such as Credit Karma and Credit Sesame. A mortgage credit score is not the same as your regular credit score and MyFico has that score plus simulators to show you how to get to the score you want.
If your credit score isn’t what it needs to be, there are a few things you can do to improve it (at least a few points) pretty quickly, according to financial experts. “A fast way to improve your score by a few points is to pay down credit card balances and stop using them for two months before you apply for a mortgage. Also, you’ll want to avoid applying for credit (for example, a new credit card or car loan) until after you’ve closed on your new home.”
Keep in mind, too, that making significant improvements in your score can take six months or more. So one of the best things you can do before buying your first home in Floresville is to start working on your credit score as soon as possible. MyFico may be able to get you there faster as their suggestions really affect your credit score. But you do have to have the ability to do some of them. One client paid down a credit card by $7,000 and his score went up 40 points. Now that is a lot of cash to have on hand but even small strides helps because you know where to do those strides if you follow MyFico. MY FICO
3. Save for Down Payment and Other Costs
The down payment – typically 3.5% to 20% of the purchase price – is often the highest hurdle for first-time homebuyers. But keep in mind that there are other substantial upfront costs. First-time buyers often woefully underestimate how much cash they need to have on hand to cover all these expenses, such as closing costs and loan fees. Closing costs can be close to 3% of your amount also. While it is not fees but items such as pre paids, it is still money one needs to buy a home. (Note: sometimes sellers can help with those costs)
So start saving now – or sooner. But do make sure that wherever you invest the money you’re saving, it is available when you need it.“[T]he greatest risk,” financial experts warn, “is not having your money available when you’re ready to buy a house.”
4. Get Pre-Approved
Getting pre-approved is a very smart thing to do before buying your first home in Floresville. You will know exactly how much you can borrow and, as a result, can narrow house hunting to homes within your price range. You will also be perceived as a serious buyer and will have more negotiating leverage.
Pre-approval “analyzes your creditworthiness, tells you how much you can borrow from your lender and, ultimately, can make the difference between winning a bid or not. In hot markets, mortgage pre-approval is almost required for a seller to take your offer seriously . . . That’s because it spells out exactly how much a lender has agreed to loan you, thus assuring the seller that you’re both willing and able.”
5. Check Out the Neighborhood
One of the important things buyers often fail to do before buying their first home in Floresville is checking out the neighborhood. Don’t fall so in love with a house that you buy in a neighborhood that isn’t a good fit. For you are buying into the neighborhood as well as the house.
The pros recommend spending some time in the neighborhood – both at night and during the day – to find out if it’s right for you. “After all, the neighborhood could have a completely different feel at night. . . Are there really big street lights that create this light pollution that creates a weird feel for the house in the neighborhood? Is there suspicious activity in the evening that you might run across that you don’t see during the day? It doesn’t hurt to spend 48 to 72 hours there before you actually commit to buying.”
Finally, there’s just one more thing to do before buying your first home in Floresville. And that is to consult your local real estate agent. Your Floresville agent will know the local market well and can help you make the right purchasing decision. Find out today how our experienced agents can assist you in buying that first home. Just send us a message or give us a call at (210) 216-7722.