Buying your first home is a big step in life. It requires a lot of preparation and planning. Consulting an experienced realtor can really help you achieve this important goal, but here are some basic steps to prepare you and your family for success.
1. Fix your credit. Nothing will grind your quest for owning a new home to a screeching halt faster than a bad credit score. You'll want to have your score professionally checked at least six months or more before you plan to buy a home. Some common factors that affect scores are you debt/income ratio, the amount of credit card debt you carry, and missed payments on bills. It is always possible to salvage a bad credit score, but give yourself a lot of time to prepare in this area.
2. Prepare for your down payment. The more you are able to put down for a home, the better position you will be. It used to be normal to put 20% down on a new home. With the current economic situation it is possible to put as little as 3 to 5% down, but this is not ideal. You'll have a higher monthly payment and won't have any options for selling or leaving the home without taking a loss.
3. Figure out how much of a house you can afford. You need to come to your realtor with some realistic ideas and goals for your first home. No more than 30 to 45% of your monthly income should be going toward your mortgage, and that’s if you’re a disciplined spender. So even if you qualify for more, do the math and be honest about what you and your family can handle.
4. Hunt for a house. Ok, so you're ready to start looking. Make sure you have a letter showing proof of funds. You really need to be working with an experienced realtor, but without the letter most won't take you seriously. There are so many complications that can occur if you try to do the transaction yourself, so get some representation and go find your dream home.
Larry Porter, Associate Broker, CRS, GRI, e-Pro, Military Relocation Professional, USN Retired
Lori Porter, ABR, GRI, MRP, HRRA Circle of Excellence Gold Award, HRRA Longevity Award
Office 757-479-3424 Cellular 757-291-3424
The Real Estate Group, LLC
1112-F Eden Way N
Chesapeake, VA 23320