Are you ready to stop throwing away your money on rent and buy into the American dream of owning a home?
Though owning a home sounds nice, it’s a big financial commitment too. If you’re ready to be king or queen of your own domain, then here are some tips to simplify house buying in 2020.
Get Pre-Approved First
Why get the pre-approval before you find a home? Well, most sellers want this document to consider an offer. A pre-approval speeds up the process for you and the seller. You’re not committing to a 30-year loan or a specific type of mortgage at this point; you’re just seeing what you can afford.
Most people think they know how much they can afford each month when it comes to a mortgage, but there are many other things to consider. For starters, you must add in taxes, insurance, and upkeep to the monthly payment. Rule of thumb is that your home should be no more than 28 percent of your gross income.
Use a Realtor
Even though you’re not selling a home, you need to enlist the help of a realtor. A realtor can assist you in finding the perfect abode, and they have inside information on properties that aren’t even on the market yet. Their wealth of knowledge doesn’t cost you a penny as the buyer.
Be Realistic in Your Search
It’s easy to fall in love with a home and go over your budget significantly. Lenders don’t often factor into your affordability equation, all those little things you pay that aren’t considered necessities. So even though the amount they say you can afford looks good on paper, only you know what you truly can pay each month. It’s better to have a home that costs less that allows you to travel still and have fun than one that straps you financially.
Select the Right Mortgage
It might be worth waiting to qualify for that 30-year fixed interest rate. Too many people get into a situation with a variable that might make your payment un-affordable down the road. Make sure you review all the mortgage programs available to you and make an informed decision.
In conclusion, always remember that when making such a significant commitment as buying a home, it’s worth taking your time. You don’t want to rush into something that you may regret later. However, all the effort is worth it as there’s nothing better than a place to call your own.
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