Owning a home is a huge thing. Not only is it often seen as a sign of financial stability, but it also signifies responsible adulthood. Nevertheless, buying your own place can be challenging, especially if it’s your first time. After all, it is not always a guaranteed investment, and it’s a truckload of work with so many steps and requirements. Are you worried about making an expensive mistake? Are you interested in how you can shop with confidence? Here’s the process to guide first-time homebuyers like you:
Prepare your finances. Start by making sure that your finances are in order. Skip the open houses unless you have a clear idea of what you can afford realistically. Calculate your budget through your income, savings, and outstanding debts. A mortgage calculator, which is an automated tool, can help you with this estimation. Also, check your credit score and see if you can secure the right loan amount. Compare your debt to income and get your down payment ready. Most people assume that you will need at least 20 percent of the home’s price to pay upfront. Luckily, that is not always the case. In fact, most first-time homebuyers shell out less than 20 percent.
Find out the best loan option for you. Since you have worked out the funds, you are now better positioned to find a reputable lender. Discuss your options, and as soon as you land on a loan that meets your needs, get prequalified. Prequalification is crucial as it gives you an estimate of what you can borrow. It is different from a pre-approval, though, which shows you the specific loan amount that you qualify for. Additional documents may be required for evaluation and endorsement.
Shop for your dream home. Once you have an idea of what you are eligible for, you can start inspecting properties and get your offer accepted. Begin previewing properties online. To help narrow your search, have your trusted real estate agent give you only home listings that fit your financial criteria. As soon as you find the most suitable match, your agent can help you come up with a reasonable, informed offer. Once accepted, they will draft a purchase contract. It often takes a month or two to fulfill this contract, so move fast. Apply for a mortgage. Within a few days of submission, your lender will send you a home loan estimate. Study this document thoroughly. Expect extensive documentation to validate your assets and income. Don’t forget the extra costs that come along with buying a home, though. These include insurance, inspection fees, and closing costs, to name a few.
Do you need more information on your path to buying your first home? At Altmann Ayala Realty Team, we can help you fill in any gaps in your home-buying experience. We can help guide you in getting your dream house at a price that you can afford. Visit our office in San Diego, California, today, to make an appointment.