If you want to buy a house this year and you don’t know where to start I would say start with looking at your credit score and report then call a Realtor®. A Realtor® can guide you through the process by having a buyer consultation with you. During your buyer consultation your Realtor® will discuss the home buying process and advise you about what you can expect.
· When you first apply for a mortgage, banks and mortgage companies will be looking at your credit history to see how you’ve handled credit in the past and currently. If you take a look at your credit report you will get a good idea of whether you have incorrect information and you will know your credit score.
· I would also say take a look at a mortgage calculator so you can estimate the amount that you want your mortgage payments to be. This will give you a good idea of the amount of the mortgage you can afford. Once you’ve done that you are ready to speak with a mortgage lender. Your Realtor can refer you to a mortgage lender.
· Hopefully you’ve saved some money which you will use towards your home purchase. How much money? You need a minimum of 3.5% of the purchase price for your down payment with FHA. You will need about $450 for the appraisal of your new home, you will need about $350 for your home inspection and you will also need another 1-2% for closing cost. I will negotiate with the seller to pay closing cost, but you want to be prepared if there are fees the lender requires you to pay.
· I normally tell my clients to save 6-10% of the amount they want the purchase price to be. You may not need that much, but it’s best to be prepared, after you’ve found your dream home you don’t want anything preventing you from purchasing it. Some of the costs associated with homeownership are property taxes, homeowners insurance, HOA fees, and utilities.
I know all of that sounds like a lot, but you don’t want to miss out on the great deals to be had. If you don’t buy now you may never buy, interest rates are low and so are the prices of homes. These conditions will not last forever, why wait?