How to Buy a Home

For the many of you who are planning to get a mortgage or if you are a new mortgage owner, it is imperative to have things in order.

The two golden rules are making sure the costs for your mortgage, property taxes and insurance are no more than 36% of your gross income; and make sure you budget, i.e. devise a plan to keep your spending below your income over the long term.

As a homeowner, or prospective one, you can never have too much information. Check out these tips on being a successful homeowner:

·         Pay on time

Always pay your mortgage on time. It’s one of the best things you can do to maintain healthy credit. If you are concerned about your ability to pay your existing home loan, talk to your lender.

·         Learn what your payment covers

Your home payment includes payment of principal, interest, and in many cases estimated property taxes and homeowner’s insurance (collectively known as “PITI”). Plus any homeowner’s association dues or private mortgage insurance if applicable.

·         Jump start your savings

This is if you don’t have the required down payment saved, which could vary depending on the type of home loan you select and the overall price of the house you want.

·         Improve your credit score

Consulting with a credit counselor or financial advisor on your personal situation is a good method of learning how to improve your credit score.

·         Be upfront with price range and preferences

When examining your loan options, be sure to let lenders know the price range and type of home you want to buy. Rates and terms for single-family homes are often different than rates for condos or second homes.

·         Consult with your agent

Work closely with your real estate agent for the best price negotiation strategies.