So, you are thinking of buying your first home. Well, you are in luck because this month I will have 4 posts which will help you to understand and survive the process of buying your first home. The process is complicated and you will be well served to find competent professionals (Realtor, Banker, Home Inspector, Lawyer) to assist you as you go.
The first step is to determine how much you can afford to spend on your new home. The answer to this question depends upon:
- how much money you have saved for the down payment,
- your income,
- your credit score,
- and mortgage interest rates.
Most bank websites include tools (calculators they are called) to help you figure out how much house you can afford. If you have questions or need assistance, call your local bank and a Mortgage Officer (often the Branch Manager) will be glad to assist you in determining how large a mortgage you would likely be able to afford.
Of course, you must have a good credit history to be approved for a mortgage. You can typically get your credit score for free online. If you are ready to start the home buying process I suggest you do your best to pay off credit card balances and delay any large credit purchases (such as a car) until after you have bought your home and are sure you can afford the added payment. Once you have a ballpark figure you can target your home search much more effectively.