by Alisa Aragon-Lloyd, as published in “The New Home and Condo Guide”, February 06th 2021.
For many people, there is a sense of pride and freedom when they become homeowners, which can’t be matched by renting. When you own your own home, you are not restricted by your landlord’s rules, and your mortgage payments are going towards building equity.
Buying a home is a big step. Here are some things to consider in advance.
- How long do you plan to live there? The transaction costs of buying a house that you have to take into consideration include legal fees, appraisals (if required), inspection fees, moving expenses, etc. If you don’t plan to live in your new home for at least 3-5 years, you may not gain enough equity to make selling worthwhile. In that case, you are probably better off not buying in the first place.
- How much house you need? Buying a cheaper, smaller house can end up costing you extra if you have to sell right away due to a growing family. On the other hand, buying more house than you need incurs extra maintenance, energy and tax costs.
- What is your credit rating? The higher your credit score, the lower your mortgage rate will be and the more you will qualify for. If needed, spend some time working on improving your credit. Check your credit report and correct any errors, don’t apply for any new credit, stay well below credit limits and pay your bills on time.
- Remember closing costs. While you are saving your down payment, save for closing costs too. The lender will require you to have at least 1.5% of the purchase price for closing costs.
- Test out what you can afford. Talk to a Mortgage Expert to analyze your situation in advance. We will give you an idea on how much house and monthly payments you can afford. To test how comfortable those payments will be, start saving that amount every month (less what you are paying now in rent). Not only will that simulate ownership, it also helps you save for a down payment!
- Get pre-approved. This is really the first step in the home buying process. Talk to a Mortgage Expert to get pre-approve for a mortgage. We have access to multiple lenders, options and will only use one credit report. The pre-approval tell you exactly how much you can spend before you start looking for your new home. There is no cost to use our services, yet we find better options for you.
- Use a Real Estate Agent. Using a Real Estate Agent can help you focus your search, find the right home, save time and protect your interests. There`s no cost to the buyer to use their services.
A Mortgage Expert can help you navigate through the mortgage process and help you find the best mortgage for your individual needs.