Updated March 7, 2019
With proper preparation, your first-time home buying experience can be a lot less stressful, and even easy, by following these helpful tips:
- Establish a Budget
Before you begin your quest for the perfect home, make sure you answer the question, “how much house can I afford?” Take a good look at your finances by evaluating your current debt to income ratio and carefully consider how financing a home will impact your budget. New to budgeting? Get some helpful tips and apps to start budgeting and saving more.
- Get Your Finances in Order
Your credit history will play a key role in securing the most attractive mortgage terms and even help determine if it’s the right time for home buying. When preparing to buy a home, it is a good idea to make sure your credit gets the attention it deserves. Take advantage of free credit reports to identify and correct any errors. By staying on top of your credit, you could increase your qualified loan amount, lower your closing costs, and secure more affordable rates, which will award you with lower monthly payments.
- First-Time Homebuyer Tip
When considering buying a home for the first time, keep in mind the additional purchases you will need to make to maintain your new home. Some of these purchases could include paint, new flooring, furniture, landscaping, outdoor patio furniture and more.
- What Can You Afford?
Be sure you know how much home you can afford before you start searching for your new home. Advia’s trusted partner Mortgage Center will evaluate all your debts and consider your full financial situation when pre-approving you for a mortgage. A key factor is how much income you bring in versus how much you will pay out each month.
Your housing expense, which includes your mortgage payment (principal and interest), property taxes, PMI (private mortgage insurance), homeowner’s association dues, and homeowner’s insurance, should generally not exceed 28% to 33% of your total monthly gross income.
All debt (including car payments, credit card payments, student loans, child support, your mortgage payment, etc.) should not exceed 36% to 43% of your total monthly gross income.
Curious on how much you can borrow from a lender? Check out our Mortgage Calculator.
- Get Pre-Approved
In today’s competitive housing market, homes are being snatched up quickly, compelling savvy buyers to get pre-approved for a Mortgage Loan prior to house hunting. Simply provide your Mortgage Center Loan Originator with relevant information pertaining to your jobs, assets, and debts and they will determine how much financing you’re pre-approved to receive. Following pre-approval, you will receive a letter from Mortgage Center which will let sellers know that you are a serious and qualified buyer, a distinct edge over competing buyers who are not pre-approved.
Although being pre-approved will provide you with a great deal of leverage in this competitive market, be advised that you will still need to go through the underwriting process for certified loan approval if your offer is accepted.
At Advia, we’re committed to being your financial partner for life. From buying your first home to building your dream home or downsizing to tiny living, we have the financing you need.
Information provided by Mortgage Center. We do business in accordance with the Federal Fair Housing Law and Equal Credit Opportunity Act. NMLS #401863 All loans subject to credit approval. Some products/services may vary based on geographical region. Mortgage Center is an Equal Housing Opportunity Lenders. All loans are subject to approval. Mortgage Center NMLS #282701. Federally insured by NCUA.