Some home buyers jump into the house buying process far sooner than they should, and other potential buyers wait longer than they really need to in order to buy their first home. It can be challenging to determine when you are ready to make this important step or when market conditions are ideal for you to do so. By following a few steps, you can more easily time your purchase appropriately.
Review Your Finances
Before you buy a new home, you need to determine how much money you can afford to put down and to use as closing costs. Remember that you should keep a rather substantial amount of funds in your accounts. Your purchase should not make you cash poor. You also need to ensure that you can afford to make your mortgage payment, pay property taxes and insurance and be ready to make any home repairs that may be needed.
Understand the Market
After you determine what your down payment amount may be and how high of a mortgage payment you can comfortably make, you should use an online loan calculator to estimate a loan amount that you can afford. You can then research some of the houses available in your price range to determine if you can afford the size and quality of home that you desire. If not, you should wait a few months or longer until you can more comfortably afford to make your purchase.
If you believe that you are financially ready to buy a home that may be desirable for you, the next step to take is to shop around for a home loan. Getting pre-qualified can help you to more confidently shop for a new home and to make a strong offer. Many sellers expect to see a pre-qualification letter at the time that you make an offer. This tells the buyer that you have the financial means to pay for the home and to follow through on your offer.
Hire a Real Estate Agent
As soon as you get pre-qualified, you are ready to hire a real estate agent. Your agent will ask you about the sales price that you are comfortable with based on your home loan prequalification. This professional may also help you to find a new home, negotiate an offer and more. Because you may work closely with your agent for several weeks or longer, it is important that you choose a professional who you are comfortable with and who you trust to guide you along the way.
A home is a major asset that you may be committed to for many years or longer. You need your home to meet all of your needs for space, style and more. You also need it to be affordable for your budget. By walking through each of these steps, you can make a wiser decision about when and how to buy your first home.