Pre-flight checks are lists of common safety measures pilots check off before an airplane takes off.  We think renters need a pre-flight check before they take off for house hunting.  Thus, this blog brings you a pre-flight check to use before you take off into the wild blue yonder of the real estate market

Pre-flight Check Item 1:

Part of the Pre-flight is to Avoid Buying Only Because It Is a Bargain

Be Sure You Know What You Do and Do Not Want in Your New Home

You might be relocating, downsizing, upsizing or it might have been a long time since you’ve bought a home.  Get ready for take-off.  No matter what your circumstances, you can use these four specific items to make an easy trip from house renter to house hunter to home-buyer.

Some lists will end your checks at this point instead of beginning them here. This is your first step, not your last:  Plan the type of home you want to find.  Your destination is a “home,” not just a dwelling.  Pre-plan your compromises and preferences.  And this will save problems later.  Just as you plan your itinerary, plan your new home search.

Be sure you and your partner or spouse agree on the basic requirements of the home you are going to pick out.  As we noted in a previous blog, “being financially trapped in a home you do not really like is similar to being stuck in a bad relationship.  It might be easier to get into than it is to get out of!”

Flight Note:  Flight Check Item 1 Requires You to Think in Terms of Years.

A.  Will you and your family like it and the neighborhood– for years?

B.  Are you interested in buying a particular house just because it is a good bargain? (Don’t Do This!) Chances are you will regret it later.

Pre-Flight Check Item 2:  Start “Saving” by Beefing Up Your Credit Score

Credit Scores can make a great difference in payment and interest. Be sure this item is on your Pre-flight check list.

You Can Be Calm in Your Home Search Like Our Kid Pilot if You Have Taken the Time to Beef Up Your Credit Score.

There’s no doubt about it.  Lower home payments result from a higher credit score.  John Ulzheimer, a credit expert and contributor at CreditSesame, stated, “Below 660 or 680, you’re either going to have to pay sizable fees or a higher down payment.” 

Please aim higher than the minimums.  700 to 720 might net you a good deal but it takes 750 and above to attract a really great deal.

So, part of this pre-flight routine is not only to check your scores.  But this pre-flight check requires you to resolves any issues the credit checks reveal.  Likewise, we highly suggest you stop using your credit cards for any major purchases.  

Flight-Check Item 3: Know What You Can Spend!

From the very beginning, you need to figure out what you can afford before you start hunting for the wrong house.  This means being realistic about your Debt-to-Income Ratio.

On the one hand, if you’re using FHA financing, as almost one-fifth of buyers today do, your home payment must not exceed 31 percent of your monthly income.

On the other hand, if you are interested in attaining a conventional loan, your home expense should not be more than 28 percent of your gross monthly income.

A Side-Note:  Remember that the commitment of owning a home goes beyond the mortgage payment.  With your partner or spouse, you should lay out your expenses for:

  • taxes,
  • insurance
  • current debt payments
  • and utilities.

Subtract that total from your current rent, and start saving the difference for at least 3-4 months.  This is like practicing before you actually take off and land.

After 3-4 months, you’ll have a good idea if you are estimating the right costs for your budget.  You will also understand more about finding the “fit” for your financing.  Are you ready for the final step on your pre-flight check-list?

Pre-Flight Check List Item 4:  Save Money For Your Down Payment and Closing Costs

Knowing Your Financial Limits Makes All the Difference.

Every financial case and every mortgage story is different and individual.  However, one common feature is the down payment.  So, you can count on needing 3-20 percent of the price of the house for your “ticket” to home ownership.  The best way to get this money is to save it up!

And while you are saving money, save up a little extra for closing costs.  House hunters are always a little shocked to realize the typical closing costs on a 200,000.00 home range from $2,300 to $4000.00.

Now you are actually ready to begin seriously house hunting.  Fasten your seat-belts and put your trays in the upright position.  You’re ready to take off on the most exhilarating fiscal flight of your life.  And you are just beginning…

Thank you for reading the blog at Palm State Mortgage Company and Happy Landings on the driveway of a great home!