Buying your new home is a serious venture. It can be a stressful and emotional task. Particularly if you're a first-time home buyer dipping a toe into real estate for the very first time. Between mortgage rates, property taxes, negotiating with sellers, and closing the deal, it's easy to feel overwhelmed. There's so much at stake! Your home is not just a house, it is a serious investment, and your future.
When buying a home – you’re bound to have many questions. For example, "What's the first step of the home buying process?", "How much money will I need to afford the monthly payments?" and "How long does it take to purchase a home?".
Below you will find some information that may be useful in your home buying process. Please feel free to reach out to me with any additional questions you may have.
Before you start home buying, you should seek a pre-approval letter from a lender for a home loan. This is where you meet with a loan officer, ideally a few at various mortgage companies or credit unions. Each mortgage lender will scrutinize your financial background—such as your debte-to-income ratio and assets—and use this info to determine whether they're willing to loan you money, and what size monthly payment you can realistically afford. Let the lender know how much you are wiling to pay a month with mortgage, property taxes and home owners insurance. This will help you target homes in your price range. And that's good, since a purchase price that's beyond your financial reach will make you sweat your mortgage payment and puts you at risk of defaulting on your loan.
As a buyer, keep in mind that mortgage pre-approval is different from mortgage pre-qualification. Being Pre-qualify you're undergoing a much simpler process that can give you a ballpark figure of what you can afford to borrow, but with no promise from the lender. Getting pre-approved is more intense since you'll have to provide more paperwork, but it's worth the trouble since it guarantees you're creditworthy and can truly buy a home.
Before you meet with a lender, one step as a buyers you can do, to give yourself a better understanding of what you can afford as a monthly mortgage payment is to plug your information into an online home affordability calculator. This will calculate the maximum amount you can afford as a monthly payment.