Buying your own home is one of the largest purchases you’ll ever make. What should you do to get ready? There’s five easy steps to Ellenton home ownership.
The key to a successful home purchase is making your choice through your finances, not your emotions. This takes research and patience. Here are five easy steps to Ellenton home ownership.
Easy Steps to Ellenton Home Ownership
1. How Much Can You Afford?
You should look at your finances to determine how much you can afford to spend. Look at your income, assets and debt. You aren’t looking for a percentage the lender says you can afford, you are looking at what you can really afford. If your lender says you can spend $1,200 a month, but you know you are struggling with a rental of $1,000 a month, you know that you can’t afford anything above $1,000..
You should also consider the down payment and closing costs. Lenders usually want a 5% to 20% down payment.
Don’t overlook other expenses, like property taxes and homeowners insurance. Your total interest, principal, taxes and insurance payment shouldn’t exceed 28 percent of your gross monthly income. Your total monthly debt, including your mortgage, autos, student loans and credit cards, should be lower than 36% of your gross income.
You don’t have to have an offer on a house in mind before you apply for a mortgage. You’ll want to be pre-approved when you are looking for a home. It will give you the security of knowing that you have funding and the buyer knows you mean business.
2. Look for what you want.
Spend the time to find the home you want. Find a professional REALTOR® that can help you with your home search. Start by checking out neighborhoods you like and then look for available homes in the area. Consider schools, parks, commuting times, and public transportation availability.
When choosing between homes, look at the size, number of bedrooms and baths, design and amenities. Decide what your “must haves” are and what the “nice to haves” are. For example, you might be willing to trade a large kitchen for a swimming pool.
3. Negotiate for the right price.
Once you have the funding in place and have found a nice home, make an offer. Your realtor will help you in submitting your purchase contract. Of course, this will include the offer price and any contingencies, such as home inspection and appraisal.
The seller will either accept your offer, reject it or make a counter-offer. Negotiations can go back and forth until both parties are satisfied. Don’t get caught up in having to get the home and loose sight of how much you can afford. You don’t want to pay more for the home than it is worth.
4. Pick out of mortgage.
As you know, there are many types of mortgages to choose from. The basic two are fixed rate and adjustable rate. Fixed-rate mortgages have interest and monthly payments that remain the same throughout the life of the mortgage, which is usually 30 years or less.
Adjustable-rate mortgages are also called ARMs. They come with a lower initial rate than fixed rate mortgages, but the rate and payment amount can move up and down with the financial index. This can happen as often as twice a year.
5. Close on your home.
The closing, or settlement, is the point at which you finalize the transaction. You walk in with a check and out with your keys and the property’s title. You can expect to pay between 2% and 5% of the purchase price towards closing costs. These costs include fees, services and points paid.
Finally …
After closing, you can settle in to your home and enjoy all of your hard work. Five easy steps to Ellenton home ownership and the house you dreamed of is yours. I’ll be happy to help you with your search. Just get in touch with me and we can discuss what Ellenton has to offer you.