Purchasing a Home
With so much uncertainty in the real estate market these days, you want to know you’re making the right choice for your family and finances as you buy a new home. As a responsible homebuyer in today’s market you also need to make sure you have a solid plan in place for financing a new home to avoid the financial hardship and heartbreak of foreclosure. Being prepared financially now will help ensure a successful financial future down the road.
Consolidated Credit Solutions offers basic step-by-step advice for getting ready to buy a home. If you still have questions or want to discussing financing a home with a housing professional, give us a call at 1-800-990-9838 or find more information through our pre-purchase housing counseling.
Step 1: Check your credit
You need to check your credit report, as your credit rating largely determines the interest rate you can qualify for on your mortgage. This, in turn, determines how much you will pay each month on your mortgage. Make sure to review your credit report carefully and dispute any discrepancies with the credit bureaus to ensure your credit is in order.
Step 2: Assess your finances
Taking a general assessment of your finances allows you to determine if you’re ready financially to purchase a home. As you’re getting ready to buy a home, consider that you will need money for the following:
- Down payment – keep in mind, the larger your down payment, the better the terms you can usually get on your mortgage contract
- Closing costs
- Mortgage service fees
- Inspection fees
- Moving expenses
- Homeowners association fees
- Maintenance and/or renovation costs on your new home
- Potential increase in utilities and public services
Step 3: Create your homebuyer budget
If you haven’t started saving for the costs listed above, it’s essential to create a budget that ensures your finances are ready to buy a home. Assess your monthly spending and put any extra money you have each month aside for financing a new home. You may even want to put the money in a different account to ensure you don’t spend what you’ve saved.
Step 4: Make sure you can afford your new mortgage
As you start looking and begin the purchasing process, make sure not to buy beyond your means. You can use a mortgage calculator to help determine the terms you want to negotiate on your mortgage contract. Once you find the home you want and begin the purchase process, use the mortgage calculator again to verify you can afford your monthly mortgage payments.
Pre-Purchase Housing Counseling
Before you buy a new home, why not talk to a housing expert to make sure you’re ready for what’s to come? Learn about pre-purchase housing counseling and how it can help ensure you make the right choice on your new investment. With the right advice from a HUD-certified housing counselor and little planning, you can get your dream home without risking your financial future to do it.