Buying A Home: A getting Started Guide

Do you currently rent your home? Maybe you have thought about buying a home and you feel as if you are just throwing your money away on rent. It’s time to get a place to call you own, home! But of course, you have a few reservations about purchasing a new home.

Sure you have questions and may be a bit nervous, those are all normal feelings after all this is an important financial decision in your life. But being educated on the home buying process will empower you to overcome those first-time home buyer jitters. 

Is buying a home is the right thing for you?

Many people are petrified of buying a home, and some of those fears are justified. As a real estate agent I hate to admit it, however, owning a home is not a perfect fit for everyone. There are some factors to keep in mind when making the decision to rent or buy.  

Renting vs. Buying – Things to consider:

Bad Credit

Ø  If your credit report is less than 620, it is a good chance that you will not receive a good rate for a loan and could potentially put you in the hands of lenders that do not have your best interest at heart.  

Ø  If you decide to pursue buying a home with bad credit, I would advise trying to raise it prior to applying for a loan.

Ø  Did you know that four (4) late payments is all it takes to make you ineligible from getting a loan?!  You can order a copy of your free credit report online. 

High Debt Ratios

Ø  When getting a loan lenders look at two ratios: front-end and back-end.  Your mortgage payment (including taxes and insurance divided by your monthly salary) is considered the front-end. The back-end factors in your monthly debt to your PITI payment before dividing the total for your salary. If after your calculations your debt ratio is 50% or higher you may not qualify for a loan. ANY lender willing to fund such a loan is NOT who you would want because you will be paying too much.

Job Instability or Relocation

Ø  How stable is your job? In 6 months, 1 year, or more will you be able to support the payments required by your loan? Things to look at in relation to your job is; Is your company laying people off? Could you be fired? Remember that unemployment is usually not sufficient enough to support a mortgage payment.

Ø  In relation to relocation, is it possible that you may be relocating in a few years? Military members should think about this prior to buying. Is this a city/town/state that you want to reside in after retirement? Are you willing to rent out your house in the event of a PCS move?  If you did purchase and had to relocate more than likely you would have to sell. When buying a house, the intent should be to at least stay for a while.

Pulling Maintenance

Ø  Every house requires upkeep, but not everyone is handy enough to tackle all the home repair projects that may but may also not have the means to support a professional to correct the issues. A good thing to keep in mind is to set aside at least 5% of the purchase price to cover any upkeep/maintenance issues that may arise when you purchase your home.

So to sum everything up, prior to getting geared up to purchase your first home you should line up your finances, put aside a down payment and do some research on the loan programs that are available for you. By researching and doing your homework you will be able to estimate how much you can afford and how much it will cost you. 

Good luck on your home search pursuit!

 

Get a jump start by searching all Homes For Sale In Fayetteville NC and Fort Bragg NC.