Posted on: 15 May 2020
Starting the home buying process can give you yearning for a home that is not practical. That's why it helps to follow these tips for finding a starter home that will work for you.
Create Your Budget First
As tempting as it may be to start looking at houses, know that you need to first have a budget before you start looking. If not, you could end up wasting a bunch of time looking at homes that you cannot afford. Visit a local mortgage lender to get pre-approved for a loan in order to do this. The lender will let you know how big of a loan you will be approved for in order to guide your budget.
Should your price range be close to what the maximum loan value will be? Not necessarily. This is just to let you know the theoretical max that a lender will give you for a mortgage. You should use that number as the price ceiling for homes that you look at, knowing that homes priced above that price are simply not possible.
It will take a bit of math to figure out your budget, but it is really simple to do. Use the current interest rates to calculate the mortgage at different price ranges, and then determine the average cost per month for property taxes in areas you are looking at. This will tell you what your monthly obligation would be for the cost of the home at various price points. Compare this against your current income to determine what your budget should be. Ideally, no more than 30% of your income should go towards housing costs.
Create A List Of Wants And Needs
It is understandable to want your dream home for your very first home, but it is not practical if you are working within your budget. It helps to create a list of wants and needs that you can use to evaluate a house, which will help determine which feature are important and which ones are not.
For example, many people put a garage as a need when looking for a home. However, you may list an attached garage as a want, and a detached garage as a need. Having two bathrooms may be a need, but a master suite is a want. This list will help you keep your expectation in check when you start browsing various homes and need to decide if you want to make an offer or not.Share