I know how excited you are to buy your first or next home. So I’m sure you’eve already started looking online at available listings, but before you start planning where you’re going to put your furniture … you have a few steps you need to take first. In a competitive market, you have to be ready to make an offer but you cannot until you can show that you’re a viable and serious potential buyer.
So first, before you even begin looking at homes, you need to decide how much house you can afford. This is where the 28/36 Rule of Debt Ratio is going to come into play to qualify for a mortgage. The what? The 28/36 rule states that a household should spend no more than 28% of its gross monthly income on total housing expenses, and no more than 36% on all debt, including housing-related expenses and other recurring debt service.
The 28/36 rule measures borrowers’ ability to afford their mortgages based on their households’ gross monthly income, monthly housing-related payments, and all other monthly debt payments. Here is an Affordability Calculator to estimate how much home you can afford
BE TAKEN SERIOUSLY
If you want to be taken seriously when making an offer, working with an real estate agent, or even looking at homes, you must get prequalified, or even preapproved. To begin this process, interview and choose a mortgage bank or broker you feel comfortable with. After you’ve selected your lender, you will need to provide financial information, such as proof of income, savings and investments you have, and how much money you have to put down. After they review this information and run a credit check, they will tell you how much they can lend you, thus how much home you can afford … and which homes you should be looking at.
Why is this vital, especially in today’s market? Sellers will be less inclined to consider your offer, regardless of the amount you are offering to pay if you haven’t proven you can even obtain financing. If you found your dream home, you may lose the chance to make an offer, if you have to take the time to get prequalified or preapproved first.
Hire a Realtor®
TRUST & CARE
For most people, a home is your greatest financial asset so it’s imperative the purchase of your home be handled with honesty, care and confidence. Find an agent who you ‘click’ with, who listens to you and endeavors to understand your particular real estate needs.
Get started by scheduling a meeting, ask questions and determine their approach to represent you in your home search. Your realtor will select home listings that fit your wishlist, provide access to homes for sale for you to tour, offer knowledge of the current market and provide comparables so you can negotiate a fair offer, represent you in the negotiation process, guide you in the steps that follow and handle the volumes of paperwork to get ready for your closing.
I would love the opportunity to work with you, so please contact me for a time to meet at your home or for coffee.
Begin your Search
FIND YOUR DREAM HOME
Okay, now the fun begins … to begin searching for your new home. There are an abundance of online tools to view available listings, with the ability to create an account so you can save listings you’re interested in and be notified when a new listing in your search criteria becomes available. LBAR.com is a great resource that shows local listings and saves your preferences.
Now that you know how much home you can afford, you can begin your wishlist of criteria you need and want for your new home. Determine number of bedrooms, baths, square footage, lot size, location and amenities you hope to find in your price range. This list will be valuable to your realtor so they can help your home search, as they will tap into additional resources to find a home that meets your needs.
When looking at homes, keep an open mind and use your imagination. Determine what items on your wishlist can be either sacrificed or if you can afford to make needed upgrades. To avoid buyers remorse, determine which homes may just need a fresh coat of paint and some TLC and which will need major repairs and renovations. A home inspection will be imperative as well.
When your dream home has been found, with the help of your realtor negotiate a fair offer based on the value of comparable homes in the same neighborhood.
“A house is made of bricks and beams, a home is made of love and dreams.``