I am addressing this post directly to those who have not as yet acquired their own home...and have the desire! One of the most important aspects in the home buying process is the DESIRE to achieve the American Dream of home ownership! If you have this goal then let's discuss some ideas!
Perhaps you're renting presently...do you have a good rental history...do you make your rental payments on time or early...that's good...because lenders consider your creditworthiness when deciding whether to approve your mortgage. Have you saved any money to be used for a down payment and reserves...do you operate within a budget...if your budget is pretty tight and your monthly debt is somewhat high, can you eliminate a car payment, payoff a student loan, or reduce your monthly credit payments.
These are some things to consider.
Are you still single and living at home with your parents...take advantage of a good thing and sock away on a regular basis a set amount each paycheck! Start building 'good credit'...when purchasing items on credit such as TV's, sound systems, computer equipment, etc. be sure to make your payments on time, even early...and try to make more than just the minimum payment...try to payoff each item purchased on credit within a short period of time...accelerate the payment of as much revolving debt as possible.
These are just some tips to establish financial responsibility before setting out to purchase your first home!
Become familiar with the financial components of owning your own home. Don't be afraid to start small in a starter home, then grow into something larger in a few years. Over the years real estate has been a good hedge against inflation...values usually outpacing inflation...even in this current market where property values are sliding in some areas, over the long term real estate will usually work for you!
Experiment with figuring mortgage payments...there are generally four components to a mortgage payment...they are PRINCIPAL, INTEREST, TAXES, & INSURANCE (PITI).
PRINCIPAL...is the amount of mortgage your starting out with.
INTEREST...is the rate that the lender is charging on the amount you're borrowing.
TAXES...are the total annual real estate taxes on the property divided by 12.
INSURANCE...is the monthly amount needed to purchase homeowners insurance...for fire & casualty.
Add these 4 components together and you have your mortgage payment per month.
Of course this is an over simplification of the real estate buying process. I am including some links to mortgage calculators and a 'primer' on home buying presented by ALTA the American Land Title association. Please make liberal use of these free tools.
Just a word to the wise: The value of a good real estate Professional is vastly underestimated by many homebuyers...search around for an agent you trust and feel comfortable with and stick with that agent! Whatever you do, be sure YOU select the SERVICE PROVIDER of YOUR CHOICE...You have that right!!! Don't give it up!
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