Buying a home for the first time is an exciting, yet challenging process. There are so many hoops to jump through and for some, it may be too much to handle. You can keep this experience positive and buy the house of your dreams by keeping in mind this buying guide.
Evaluate Assets and Liabilities
To see if purchasing a home is even possible, you must first look at your financial portfolio and assess your assets and liabilities. Calculate how much money you and your spouse are bringing in each month. Compare this number with liabilities, such as the mortgage, car payments, bills, and daily essentials.
If you have more than enough money left over after subtracting the liabilities from the monthly incomes, then you probably can afford the home. If you're still hesitant, talk to a financial adviser. They can organize your finances so that they're much easier to analyze. If you don't make enough, they'll let you know upfront to avoid putting your family in a financial burden.
Many first-time home buyers make the mistake of shopping for houses that are simply out of their budget. Instead of wasting your time, go ahead and get pre-qualified. There are plenty of financial institutions you can work with to see exactly how much of a home you can afford.
All that's required is some basic information, and then you'll find out within minutes what type of mortgage options are available to you. Knowing these figures helps narrow down your list of houses. It also gives you more negotiating power when working with the seller, as they know you're serious about their property.
Assess the Down Payment Options
The down payment is often the figure that most home buyers fear, as they may not make enough money to put 10%-20% down. If you're in a similar position, you need to think about down payment options months, possibly years, before purchasing a home.
You could either start saving by establishing a strict budget, or you can seek help from other financial institutions. First-time home buyer's programs, for example, are available through some bank branches. They essentially let you purchase a home with very little down, often less than 10%. VA lending programs are also available if you served in the military.
There may seem like a lot of obstacles in the way of securing your dream home. Don't get discouraged, though, because you can make your home ownership dreams a reality if you carefully consider your finances and start planning today.