A lot of people dream of owning a home and we know the decision to make your first real estate purchase is an exciting one. However, owning a home can be a huge responsibility and its important to ensure you are financially and mentally ready for this new chapter in your life.
We've put together some common questions that every home owner should ask themselves before taking this big step. Once you've answered the questions below, you'll be well on your way to finding your new home.
Owning a home definitely has its perks, like freedom to decorate and truly express your personality in a space. But first time home owners need to understand that purchasing real estate comes with a lot of obligation. It's important to be confident that you're willing to make the sacrifices needed to invest in real estate.
In addition to mortgage payments, homeowners are responsible for property taxes, repairs and maintenance. We recommend budgeting 1 to 2% of the purchase price annually for general upkeep. When looking at homes, it's also important to consider major renovations that are likely to be needed within the next several years.
Lenders take debt-to-income (DTI) ratios seriously when considering who qualifies for mortgages. Your DTI is the amount of your gross monthly income that is spent on repaying debts, like student loans, credit cards and car payments. After your home purchase, your DTI shouldn't be more than 40% of your income, and your home debt should be less than 32%. If more than 8% of your monthly income is going towards debt payment, consider working down that number prior to purchasing real estate to ensure you're approved for a higher mortgage amount.
Do you want to spend a couple hours a week maintaining your yard? Would you prefer to pay a fee to have someone else do this instead? Are you okay with restrictions on the color you can paint your house? Can you stick to a schedule for when your garbage cans are out? These types of questions will help you figure out what neighborhood is best for you. Make a list of the qualities you want in a house, as well as the qualities that are negotiable, and you will save significant time and energy in your real estate search.
Karen & Steve Hakola & Associates will work for you, to help you find the best home at the right price. When you hire us, we will do everything we can to assist you with purchasing your home. From one-on-one consultations to home evaluations, we are here for you.
Remember your objectives when viewing a potential home. Not every house you visit is right for you, but it may feel that way when you walk through. A lot of home owners make the mistake of following their impulses instead of their head. Keep your list of important home qualities in mind and evaluate each home based on how well they fit it. It may turn out that a hot tub isn't as important as that extra bathroom or great location. Your list of priorities will keep you focused and a great agent will help you privately evaluate the pros and cons of each property.
Find the Right Lender. To find the right mortgage lender it’s best to shop around. Get recommendations from your friends and family and check with the Better Business Bureau. Talk to at least three or four mortgage lenders. Ask lots of questions and make sure they have answers that satisfy you. Make sure to find someone that you are comfortable with and who makes you feel at ease.
Once you have the right mortgage lender, make sure you at least get a pre-approval. Qualifications are only a guess based on what you tell the lender and are no guarantee, whereas a pre-approval will give you a better idea of how big a loan you qualify for. The lender will actually pull your credit and get more information about you. However, you could even take it one step further by getting an actual approval before you start home shopping. That way, when you're ready to make an offer, it will make the sale go much quicker. Besides, your offer will look more appealing than other buyers since your financing is guaranteed.
Make your offer. The most exciting and nerve-racking part of real estate comes when you make an offer. We'll prepare the paperwork for you and help you understand exactly what is happening. While we hope your offer is accepted, it's important to know that a lot of home owners don't end up with the first home they want. When making an offer, you'll probably also have to write a deposit check to prove you're serious about the purchase.
Get all necessary inspections done. Once your offer has been approved, we recommend getting a home inspector right away. An inspector will check for damage, pests, shoddy craftsmanship, and signs of harmful materials like mold, lead paint and asbestos. While this is technically an optional step, it would be irresponsible to skip it. Inspections will alert you to potential problems and provide you with a full report on repairs that need to be done. We know several Orange County inspectors and would love to recommend someone to you.
Do a final walkthrough before the final signing. We will gladly accompany you on this final check to ensure that everything agreed upon has been completed.
From our first conversation to the moment you receive the keys, we can help you through every step of purchasing a house. Don't hesitate to contact Karen & Steve Hakola & Associates to learn more about our services and what we will do for you.
Contact us for more information about buying your first home!