Home Buying Mini-Guide-Knowing What You Want, Financing And Choosing A Real Estate Agent
When you start the process of looking for property for sale, there are several factors to consider, such as the budget you will have for a new home, the neighborhood where you want to live and the size of the home you need. It is also important to have a general idea of what you want in a home, including the number of bedrooms you want as well as if you prefer a house that is move-in ready or if you are willing to do some of the work. From the importance of using a real estate agent to help you with the search to financing options, this mini-guide will walk you through the process of buying your first home.
Make a List
Before you even consider driving around looking for property for sale or contacting a real estate agent, it is essential that you make a list of the features you want in a home, prepare a budget and know the area where you want to live. Your list should include information such as how many bedrooms you need, how many bathrooms, whether you are interested in a single level or two-story home and whether you want a basement or not.
Before contacting a real estate agent, one of the most beneficial things you can do to speed up the process of buying a home is to get pre-approved. If you are pre-approved, it will take the guesswork out of how much you can actually spend. There are several things you should be aware of when it comes to financing, including understanding the difference between split, fixed and variable loans. You should also talk with the lender about the various financing options you may qualify for, such as FHA loans, first time home buyer or VA loans. One of the most important factors to consider when you are thinking about buying a home is determining the total amount you can afford to spend as well as how much you can afford for monthly payments:
Create an Estimated Budget
To estimate what your allotment is for a monthly budget, use your current income to deduct your current expenses, including:
- Current housing costs
- Estimated utility costs
- Car and auto insurance payments
- Living expenses
- Estimated utility costs
Estimate Your Mortgage Payment
Determining what your current expenses are will make it easier to determine what you can afford for a monthly mortgage payment. The following simple formula will help to estimate what the monthly mortgage payment will be:
- The cost of the home, minus the down payment and multiplied by .008 (estimated interest rate)
- For example, the purchase price is $200,000 and you put a down payment down of $10,000, the loan amount will be $190,000.
- Multiply $190,000 X .008 = $1520, which is an estimated amount of the mortgage payment.
Once you have been pre-approved for a loan and have a good idea of what you want when searching for homes for sale, it's time to contact a realtor. It is important to choose a real estate agent that is familiar with the neighborhood you are interested in, the schools in the area and the distance from the property to things in the area, such as shopping centers. Be specific with the realtor about what you are looking for. For example, if you need a three bedroom home, do not agree to look at two bedroom homes, this will take up a considerable amount of unnecessary time for you and the realtor. You can also save time by reminding the real estate agent of the neighborhoods you are interested in and avoid touring homes in areas you aren't interested in.