Whether you are buying a home for the first time or have purchased a property before, there are always certain questions that you should be asking yourself before going ahead and buying a home. Here are the must-ask questions you’ll need to address when you are hunting for the perfect place.
As a general rule, you shouldn’t be spending more than 30% of your net monthly income on your mortgage payments. This is a general rule but at the same time everyone has their own financial situations. The answer to this question should be worked out based on your own personal circumstances.
It’s important to take a look at your monthly expenses either on your own or with your partner. Figure out exactly how much money you are spending every month and make sure that you factor in even things that are small like take-out coffees and snacks picked up at the convenience store. Then, once you have an amount for the expenses you can look at your net monthly income and see how much is left over. From that point you can figure out how much you can afford to pay for a monthly mortgage payment.
Once you have figured out the monthly mortgage payment amount that you can afford it’s time to work with a mortgage calculator to see how much you should be spending on a home. Remember to factor in the additional fees that will need to be covered such as taxes, insurance, real estate lawyer fees etc.
It’s important to get pre-qualified for a mortgage before you start a serious search for a new home. Make sure that you are qualified to get a mortgage ahead of time so that you don’t become disappointed later.
Find out what your credit score is before applying for a mortgage. You can access your credit history free of charge on the Internet and you can check and make sure that everything looks good. If you check your credit history online before putting in an application for a mortgage, you’ll have time to fix any errors that may be on it ahead of time.
Now that you know how much you can spend on a home it’s time to see what is available. Can you afford to purchase a single-family home? Maybe you can afford a townhouse or a duplex. Perhaps you need to get started in the market with a condo. When it comes to the type of home that you can purchase, a lot will depend on the budget you are working with.
The important thing to remember is you need to get your foot in the real estate door. There is always a starting point for everything. Purchase what you can afford now and as you continue to make payments and as time goes by and the value of your home starts to go up, you’ll have established equity that can be used to purchase another home in the future.
Be sure to ask yourself these questions before starting your home search. The more questions you ask yourself the more prepared you’ll be to start your search with confidence.