When preparing to buy a home, it’s important for buyers to work with a real estate professional who can advise the best possible strategies for getting a mortgage and finding an affordable home. This partnership can make the real estate sales process go a lot more smoothly.
Perhaps the most important part of getting into the housing market for the first time is to do as much homework as possible before diving in. That means first determining what homes in a given area are selling for, and what that cost would mean in terms of monthly mortgage payments, mortgage insurance, homeowners insurance, property taxes and so on. Closing costs should also be considered.
A Strong Financial Profile
Buyers not only need to have savings available to make a sizable down payment, but have the ability to afford the long-term cost of a home on an ongoing basis. Having a strong credit score will not only result in a good rating and unlock mortgage availability, but will also bring down mortgage rates (and thus the cost of a home.)
Additionally, larger down payments will reduce the principal of the loan. When buyers combine a high down payment (preferably in excess of 20 percent) along with good credit, they may position themselves to save tens of thousands of dollars over the life of their loans.
Keep in Mind
When trying to determine how much home buyers can afford, they should try to remember a few basic rules of thumb about housing costs. Generally speaking, experts advise that a mortgage payment should not cost more than one quarter of one’s monthly income. While there may be a little bit of wiggle room here, this is a good anchor point at which to set expectations for affordability.
Of course, some home buyers may have their sights set on properties that are more expensive than they can currently afford, especially with the way prices are rising in today’s market. This simply means they will need to put in more work to improve their credit score (to get a better rate) or put more into savings (to increase the size of a down payment).
Working with a real estate professional will help buyers truly understand what they should be looking for in the market and how they can best approach their home-buying efforts.
Interested in becoming pre-approved for a mortgage loan? Start with Sibcy Cline Mortgage Services.
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