"What do I do first?" This is the question most often asked of me in real estate, both verbally and non-verbally. If a buyer does not come right out and say it for reasons of ego and pride, their body language of discomfort screams the question at me. With a wink and a smile my answers is always this "You've already taken the first step....you've found a good Realtor to guide you though the process."
The second step is to determine your "Purchasing Power" by contacting a reliable and reputable lender. Several factors come into play when determining your purchasing power. These include your credit score, your debt to income ratio, and current interest rates. Your interest rate will have a lot to do with your credit score.
If you have a really good credit score and your debt to income ratio is not to high you can get a really good interest rate at around 5% or possibly lower. For the last 3 or 4 months interest rates have been a record lows. This means you may be able to afford a better and/or bigger house than what your would have a year ago or even 6 months ago when interest rates fluctuated in the 6% range (which is historically still a good rate compared to the early 80's which had 18-20 percent interest on homes).
The graph below demonstrates this concept and may be utilized to understand how to make interest rates work for you when buying a home.
(Graph provided by Doug Holmes)
If you are in the Charleston SC area and are interested in buying a home, give me a call. I'll sit down with you and explain the step by step process of buying and how I can help you most home for the least amount of money. Best of all, my services are at no cost to you.
Michael Johnson
843-817-5299
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