Buying their first house is a goal of many young adults. Much like with other major accomplishments, planning can make the process go more smoothly. These three tips can help you find the right house at a price you can afford.
- Get Your Finances in Order
A first house is a big purchase, so you’ll want to take steps to get your finances in order before moving ahead with house shopping.
- Save for a downpayment:Having at least 20% of the purchase price in hand will help you secure the best rates and avoid private mortgage insurance.
- Pay off debt:Less debt is definitely better. Banks look at the ratio of your debt to income when calculating whether to offer a mortgage and at what rate. Plus, the fewer payments you have, the more resources you have to put toward your mortgage.
- Clear up your credit report:Even small mistakes or commissions on a credit report can significantly impact your credit score. Request a free copy from the major bureaus and check it for accuracy.
- Decide How much You Can Afford
Armed with a clear financial picture, build a comprehensive budget. Once you determine what payments you are comfortable with, you will also get an idea of how much house you can afford.
- Find the Perfect House
Now you are ready to start searching for that perfect house and neighborhood. School quality, taxes, transportation options, and proximity to work and entertainment venues will affect where you choose to look. When you schedule viewings, take detailed notes and pictures (if the current owners agree), so you can compare them on your own time. It will help remove pressure and give you a more objective view. Once you are ready to make an offer, schedule structural and pest inspections Clemmons NC to avoid any surprises after the purchase is finalized.
By planning ahead, you can make the process of buying a first home easier and ensure you find the right home for your needs.