There are a number of steps that should be taken BEFORE you look at homes. Taking the these steps will help make your home buying process go smoothly.
Decide what price range you want to spend on your home. You can usually afford a home that equals your gross income multiplied by 2.5. Remember to add in taxes and insurance to your principal and interest payment. Know what a comfortable monthly mortgage payment is.
Write down your ‘Needs’ for your home. List the features that you want your home to have, then put in order from ‘Most Important’ to ‘Would Be Nice’.
Narrow your desired location to 3 or 4 neighborhoods. Make sure to take schools, future expansion plans, traffic and commute, and safety all into consideration.
Look at your available funds. Do you have enough to cover earnest money, down payment and closing costs? Most loan programs will require 3.5% down-payment at closing. There are down-payment assistance programs available for first time home buyers who qualify. Be sure you ask your loan officer what may be available to you.
Take care of your credit! Make sure to obtain a copy of your credit report, complete with scores.
Get prequalified for your mortgage. Talk to Carrie Guarrero at MN Home Loan Partners to determine whether you will qualify for the mortgage amount needed for you to purchase in your desired price range. It is also important to talk about the different loan options that would fit your situation best.
Gather documents. Put together all the information that your mortgage professional has requested. This is an important piece of the prequalification process. A true prequalification cannot be issued unless you have shown documentation to verify your income, assets and debt.
Don’t forget maintenance and utility costs. Depending on your situation you may also have to incur moving costs as well.
The best thing a first time home buyer can do to prepare themselves for a home search is to attend a HomeStretch class provided numerous times and locations throughout Minnesota. The HomeStretch workshop will help prepare buyers for the realities of owning a home. It will better arm you for the wonderful enjoyment of home ownership.
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