With mortgage interest rates still at historically low levels and with the economy continuing to gain steam, that dream you’ve had of purchasing your first home might be closer to becoming a reality. Owning a home certainly has inherent benefits, from being able to make your space your own, to being able to build equity that can improve your financial position. Before you get the keys to a new home, though, here are three preparations you should make to ensure the entire process goes smoothly.
If you are far enough along that you’re seriously considering buying a home, then you hopefully have at least a basic idea of your overall financial picture. Before you move any further, though, it’s important to dig a little deeper. Getting a complete idea of your financial situation before you begin the other steps of the process will ensure you encounter fewer surprises along the way.
Some key things to consider are your credit score, your debt-to-income ratio, and the total amount of your current assets. Each of these items will be key at some point in the process or another, so having a good idea of what they are will put you in a much more powerful position.
If, after getting a good handle of your financial situation, you’re still on track to purchase a home, it’s time to start getting the experts involved. Sure, you could shop around for mortgages on your own, but unless you or a close friend are a loan officer, you will likely end up making the wrong choice. Mortgages are complex beasts, and even if someone you know who you perceive to be in a similar financial situation was a good match for a certain mortgage, it doesn’t mean you’ll be a good match for that same mortgage.
Even small differences in credit history, current income and debt, and loan terms can drastically change what type of mortgage you’ll need. So, enlist the assistance of a mortgage service like Home Mortgage of America to help you understand not just what the best mortgages are, but what the best mortgages are for you.
If you’ve made it this far, you’ve got a much higher chance of eventually owning a home. Now, it’s time to start spelling out a wish list for your future home. Doing it any sooner than this will only result in disappointment once you realize how much you can actually afford.
Unless you are independently wealthy, you may have to lower your expectations just a bit. Not that you can’t ultimately find the beautiful home of your dreams, just that your dreams may look a little different after receiving a dose of reality. That said, lining up your needs and wants with what’s available in your price range is a great way to eliminate unrealistic possibilities, which will ultimately allow you to hone in on a few promising properties, one of which just might be “the one.”
Buying your first home can be a complicated process that can seem overwhelming at times. Don’t lose sight of the end goal, though. With the right preparation and with the right professionals standing behind you, you will be able to realize your dream of homeownership. That’s an accomplishment worth striving for.