Few decisions in life are more monumental than buying a house. It's certainly one of the biggest financial commitments you'll ever make. It's also one of the most rewarding experiences.
You'll start to build equity and watch your family flourish the moment you become a homeowner. Yet, the initial home buying process can be a bit daunting. Where does one even begin when they're about to invest thousands upon thousands of dollars?
That's why we've created an all-encompassing home buying checklist. In five broad strokes, we'll help you map out your destiny, one step at a time. From determining your budget, to getting pre-approved, to securing the home of your dreams, you're actually only a few steps away from this monumental life moment.
So, pull out your calculator, remember to remain hopeful, and dream big. Whether you buy a new or used home, your future is about to change in wonderful, new ways.
1. Determine Your Budget
Before you can take any other steps forward, you have to be clear about what you can afford. This will immediately eliminate unattainable homes from your search and keep you focused on what's right for you.
What you want to calculate here is your debt-to-income ratio. Figure out what your regular, recurring bills are and compare that to your monthly income. So, you'll need to add up all your monthly bills and divide them by your gross monthly income.
That number should be no higher than about 40%. And, remember, that's the highest you can go. If you find a home that's no higher than, say, 30% you're in an even better position. If you don't need to stretch your budget all the way to the end, it'll create a lot more wiggle room in your cost of living.
2. Start Saving
Somewhere in your budget, one of your bills should be savings. It's wise to save up for a sizable down payment. If you know what kind of house you can afford, then you can roughly estimate what a 20% down payment will look like.
Not everyone puts down a full 20%, but there are a lot of perks in doing so. It will lower your monthly mortgage payments. It will allow you to pay less in interest throughout the life of the loan. It will also exempt you from private mortgage insurance, a fee lenders charge when someone puts down less than 20%.
3. Get Pre-Approved for a Loan
Once your finances are in order, it's very wise to find a lender and get pre-approved for a loan. This will do a few different things for you.
First, it transforms potential home buyers into qualified, serious buyers; sellers will like this. It will also help you hone in on how much you're able to spend (even though you already had an idea).
You'll have a better idea of the type of loan you're going to apply for and establish a relationship with a lender that you can hopefully rely upon when the time comes for a formal application.
4. Find a Realtor
With all these proverbial ducks in a row, it's time to pound the pavement with a trusted real estate agent by your side. Realtors do so much more than scan the Internet for new listings.
First, they are professionals in finding the perfect home you are looking for using their own databases. Second, they run neighborhood comps to make sure the house you're about to put an offer on is accurately priced.
They'll be there to assist you in your journey and also help you through some of the more difficult tasks like inspections and closings. They're an all-around help with specific expertise that first-time homebuyers might not have.
5. Secure Your Dream Home
Finally, it's time to find your new home. Whether you hire a real estate agent or not, you can start your home search today. Since you already have an idea of what you can afford, you can put on those search filters and start to gain an understanding of what's out there.
You might even consider a new build. There are many perks to buying a quick, move-in ready or to-be-built home. New homes tend to have a higher resale value than used homes. They also tend to have greater energy savings and a more modern layout.
Your Home Buying Checklist
And there you have it. These are five broad steps that should be on everyone's home buying checklist. Once you're clear about your finances, you can secure the right agent and hunt down the right home.
Here at Gray Point Homes, we're in the business of bringing dream homes to life. We build high-quality, stylish new homes that are designed for the first-time homebuyer. We believe that the dream of owning a home should be attainable (and affordable) for everyone.
If you're planning to move to Austin, Dallas/Fort Worth, Houston, or San Antonio, we can help you secure your new home. Choose from any of our floor plans; choose your desired neighborhood; and let your new life unfold.
We build energy smart (and smart) homes within an affordable price range. Imagine being the first one to step onto plush, new carpets or open brand new kitchen cabinets.
Fill out the form below to get started on your new home journey. We look forward to stepping into this new chapter of life with you.