Buying Your First Home
So, you think you want to own instead of rent? Here are the great reasons why and the next steps. Wonder about any of these points? Let's talk.
As a home-owner, you are able to deduct the interest you pay on your mortgage, your property taxes, and some of the costs involved in buying a home.
When you make your mortgage payments, you are building the equity (ownership interest) in your home. When you make rent payments, you'll never see that money again.
Real estate has historically been an appreciating asset. And, your equity is like savings in the bank. When you sell, you can take a gain on your income tax (up to a certain amount - IRS details here)
Besides all that compelling evidence, home ownership provides stability, freedom, and some predictability. Stability, making lasting relationships in one neighborhood for you and your family. Freedom, it's your home to decorate as you please and enjoy as you want. And, predictability, your mortgage payment is at a fixed rate but rent will always go up! Here's a calculator that can help you compare the costs between renting and owning: https://5172752356.mortgage-application.net/Calculators/RentVown.aspx
Find out what you can afford.
Your credit score is a crucial piece (but not the only piece) of information that lenders use to determine what you can debt you can afford. You need to check your credit with all three credit major credit bureaus (check with your state - you can look this up for free once per year in most states). Building your credit score will make your payments less.
Conventional estimates are that you should plan on your home debt to be 30-50% of your net income (after taxes).
And, don't forget that down-payment. Every bit you can save toward a down payment lowers your monthly payment and also the interest you pay over time. There are low-down payment options out there if building up a cash lump for the new house is hard to come by.
Start the hunt.
Once you know you're credit-ready, get with a loan officer to get pre-approved (I've got some great folks to point you to - just let me know). Armed with a preapproval, start looking for what you think you would like in the areas you want to search. You can save a lot of running and spinning of wheels by researching online to narrow down the features you like or don't like. Your time with your agent will be much more productive (although, agents are very adept at helping you determine what your needs and wants are).
Find an agent that meets your needs. Work with a reputable company and ask questions to help determine compatibility (how do they communicate, how often, will they help you search for your home, etc.)
There's a lot more to this process but this is a start. Are you ready?