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Buying a Home? You May Have Missed an Important Step

Shutterstock_164412314Anyone who is going through the process of buying a home knows that it can be a long and expensive process. And it’s one that you need to get right to build a solid financial future. From finding the right realtor to determining the most important factors for your next home, there are many important steps to take. Luckily, 360 Degrees of Financial Literacy and Feed the Pig are here to help. Here are four essential tips (including one many people overlook) to help you with the home-buying process:

  1. Find the right lender. There are many different types of mortgages, including fixed-rate, adjustable-rate, government-insured, conventional loans and others. The interest rate on your mortgage is based on several factors, including how much the home costs, how much money you are putting toward a down payment and the type and length of the mortgage. Make sure you consult a few reputable lenders to determine the best option for you. If you plan to get more than one quote, be sure to request these within days of each other to lessen the impact on your credit score.
  2. Search for the right home. Create a list of (reasonable) must-haves for your price-range. Is location or size of house more important to you? Do you like the neighborhood? Is it close to public transit? Does the right school district matter? Think about your home in a holistic way that takes into account the actual house and the surrounding area as well as your lifestyle. You probably won’t get everything on your list so having an understanding of needs versus wants will help speed the process.
  3. Find the right mortgage. Although it might be tempting to borrow as much as a bank will lend you, make sure this works with your budget. And the forgotten important step…
  4. Look at all living expenses. This is where first-time homebuyers sometimes get into trouble. Make sure your monthly budget accurately reflects all living expenses. Take into account not just the mortgage payment, but other items like property taxes, commuting expenses, utilities including gas, electric, and water. Be sure to take into account any immediate upgrades or repairs your new home may need, including big ticket items like kitchen and bathroom renovations, and repairs to the roof or floors.

For more information, check out this #creditchat, featuring David Lopez, CPA from the National CPA Financial Literacy Commission. Don’t forget about our calculator which figures the amount of income required to get a mortgage.

Dan Bond, Senior Manager – Communications and Consumer Education

Samantha Delgado, Manager – Communications and Consumer Education

Home image courtesy of Shutterstock


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