Buying a home in this business environment can be a tough thing to do. Besides having to worry about market conditions, there are some questions you need to ask of yourself. Where should I buy a home, are homes for sale where I would like to live? How much home can I afford, and can I get approved for a loan? These considerations and others are part of a successful home buying process.
1. Is Buying a Home Right for Me?
First, you need to decide if buying a home is the right move for you. Some factors that help answer the question include how much income you have and employment status. Your potential lender is not only concerned about your quantity of income but is also about your employment history. If your income is sporadic, get your career in order before you think of buying a home.
2. Can I Afford a Home?
Second, determine if you can even afford to buy a home, and how much home you can afford. One suitable place to start this analysis is by figuring your DTI (Debt to Income) ratio. Consider also that home ownership entails many hidden costs that are not present when renting. Two of these include property taxes and homeowners insurance, which can be bundled as part of the loan, but they still have to be paid.
3. Get Preapproved.
Third, get a preapproval letter for your mortgage. When you apply for the loan (mortgage), the lender should provide a preapproval letter stating how much loan you can handle. This is not a subjective judgment based on whether the loan officer likes you are not. Preapproval usually includes questions about your assets, income, and the home you are thinking of buying. The preapproval process also includes a credit check, so you will want to have your credit in order. Realize that there are several types of loans available including conventional loans, FHA loans, VA loans, and USDA loans. You may consider consulting with Calgary Homes to learn more.
4. Find a Real Estate Agent That Works For You
Fourth, find a real estate agent that works for you and that “clicks” with you. Keep in mind that the agent you choose will represent you during this transaction. You want an agent who will consider your buying criteria, show you multiple homes for sale, and help negotiate with the seller. The agent’s job also includes helping you understand what is going on during the process and advise you on your next move.
5. Determine Your Priorities
Fifth, make a list of your priorities for your new home and share this with your realtor. These priorities must include your budget information and options for the home. Other options may include house layout, number of bedrooms, local school ratings, and whether surrounding property values are increasing or decreasing. You should rank these priorities and share them with your agent.