Buying Your First Home
Buying your first home can seem like a daunting task; saving up for one can be an even scarier process. How will you cut back on your everyday expenses? How in the world will you manage to save when you’re already living financially lean? Where do you start?
Here are a few steps you need to take in order to be ready to find and purchase your first home:
- Decide if you’re ready to own a home. Spending X amount of money on rent every month is hard to do when there’s no ownership or equity behind it, but also be aware that with ownership comes additional expenses like repairs, taxes, insurance, etc. It’s smart to work on getting out of any current debt before embarking on new mortgage debt.
- Get preapproved. Being preapproved for a loan will help you to look within your price range. Be prepared with a proof of income and assets, employment verification and other documentation (such as driver’s license and Social Security number) when you consult with a lender.
- Start shopping. Find a financial institution that offers plenty of options – low rates, bi-weekly payments, no prepayment penalty, adjustable and flexible rate options and specialized options (such as Wisconsin Housing and Economic Development Authority [WHEDA] and other first-time home buyer programs), just to name a few. Knowledge is power; knowing your choices gives you the power to make smart decisions.
- Determine how much you can actually afford. Make sure you can make your other financial obligations while taking on a mortgage. A good rule of thumb is to keep your mortgage, taxes and insurance payment between 25-30 percent of your income.
- Find a great realtor. You shouldn’t have to go through the search alone; work with someone who listens to your needs and takes the time to weed through the homes that wouldn’t be the right fit. Using a realtor to narrow down your choices will save you time and headaches.
- Inspect, inspect, inspect! Hire a professional who will be able to examine the entire home to look for hidden problems. You never want to sign on the dotted line for a costly situation (hello, attic full of asbestos!) that could’ve been avoided.
- One last step – escrow. Escrow is a process that provides for a fair and equitable transfer of property from one person to another. The escrow holder is a third party who makes sure everything is in order before you close, including documents, money and other necessary information.
Now move in and celebrate! You’ve just embarked on one of the biggest purchases of your life; you should be very proud of your accomplishment.
Ready for step 2? Contact a Mortgage Lender!
920-882-4770 920-882-4771