Palm State Mortgage Company recognized and applauded the house hunters of spring 2016, in our report last week. We have seen ordinary people transform into house hunters for a variety of reasons.
For example, it might have been a long time since you bought moved or bought a home. You might be relocating, down-sizing or you are expanding your family. For some reason you are standing on the crossroads of house hunter and home-buyer.
No matter what your circumstances, you need to become aware of seven specific steps that will make your transition from home renter to homebuyer much easier. You will notice a Palm State theme recommending you to save some money before you choose that new house. We want your life as a home owner to save money, time and stress. One of the ways to accomplish this will be to save up some money before you ever seriously house hunt.
For some of you, the seven baby-steps in this article will be a review, and for others, you might be just beginning to realize the journey you will take to buy a home. Among the pages of our previous blogs, you are also going to find a wealth of financial information to help you on your way.
Find more helpful articles on all six of these steps within this website. We have linked them so that this article is like an index to our treasure-trove of house-hunting, home-buying tips.
Step 1: Save Time and Money by Finding a Home You Like
Some list telling you where to begin your home buying journey will make this your last step instead of your first. Palm State Mortgage Company wants clients to consider it from the very beginning. Keep in mind that you want a “home,” not just a dwelling.
Pre-plan your compromises and preferences and you will save problems, stress, time and money, later.
Be sure you and your partner or spouse like the basic requirements of home you are going to pick out. Being financially trapped into 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!
You must think in terms of a years. As you view the home, consider if you and your family will enjoy it and the surrounding area for years to come. You do not want to purchase a house just because it is a good bargain just a good bargain. Do not think about your house as one you are going to quickly sell, not in this economy!
Step 2: Start “Saving” by Beefing Up Your Credit Score
Here at Palm State Mortgage, we can pretty much assure you that the way to lower home payments I through a higher credit score. John Ulzheimer, 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.”
Likewise it has been our observation that while 580 might get you qualified, today’s market is expecting 640-660, at least.
Please aim higher than the minimums. 700 to 720 might net you a good deal but it takes 750 and above attract a really great deal.
So, Palm State Mortgage advises you to check your scores, resolve any mistakes or issues, and stop using your credit cards for a while, at least.
Step 3: Save Stress and Money–Know What To Spend!
From the very beginning, before you start hunting for the wrong house. you need to figure out how much you can afford to spend on housing.
Hint: “If you’re using FHA financing, as almost one-fifth of buyers get FHA-insured loans, your home payment can’t exceed 31 percent of your monthly income.”
You must figure out a realistic debt-to-income ratio. For example, if you are going for a conventional loan, your home expense should not be more than 28 percent of your gross monthly income.
Remember that the commitment of owning a home goes beyond the mortgage payment. Consider your expenses for taxes, insurance and utilities. Subtract that total from your current rent, and start saving the difference for at least 3-4 months. Then you’ll have a good idea if you are estimating the right costs for your budget and the right fit for your financing, —which brings us to Our Step Four, which also demands you to start a savings plan.
Step 4: Save For Your Down Payment and Closing Costs
Every financial case is different, but you generally need 3 to 20 percent of the price of a home for the down payment. The best way to get this money is to save it up!
Likewise, save some money for your closing costs. For example, the closing costs on a 200,000.00 home will typically be between $2,300 and $4000.00!
Next week, we will bring you Part II of our 2-Part Palm State Mortgage Company Series on Save Stress: 7 Home Buyer’s Steps.
Remember, taking care to follow these steps will save you money, time and stress!
A Special Palm State Wish For You,
and all the Moms and Grandmothers!
Meanwhile, let us be among the first to wish you and your family…
…A Very Happy Mother’s Day, full of special memories and family time!