The cost of real estate financing is often greater than the original purchase price of a home (after including interest and closing costs). Because financing is so important, buyers should have as much information as possible regarding mortgage options and costs.
For first-time buyers and repeat buyers alike, the decision to make an offer on a home is both exciting and a little scary. If your offer is accepted, the place you’ve chosen will be your home for the next several years. Not only should you feel emotionally satisfied by your choice, but you should also feel financially comfortable that you’re buying a home that you can afford and that you feel confident will hold onto its value or hopefully increase in value over the years.
A quick search on realtor.com will bring up thousands of homes for sale. Educating yourself on your local market and working with an experienced Realtor can help you narrow your priorities and make an informed decision about which home to choose.
Start With Your Budget
Before you begin your house search you should have a preapproval letter in hand from a lender and an idea of your comfort level with a prospective house payment. You and your Realtor can begin to search for homes for sale that fit your budget, but keep in mind that you don’t necessarily want to spend up to the maximum amount you can borrow. On the other hand, you can consider going slightly above your preferred price range as long as the monthly payment is still affordable or if you have extra cash to make a bigger down payment.
There’s nothing more frustrating than falling in love with a home and then discovering you can’t afford to buy it.
Consulting with a mortgage lender is the first step you should undertake in the home buying process. Almost all first-time buyers need a mortgage to finance their home purchase, so get prepared before you look.
When you’re armed with the knowledge of what you can afford, it focuses your search and allows you to make a move when you find a home you love.