5 Things you should know BEFORE buying your new home
Updated: Mar 28, 2019
1) Your Budget
If you're like most people, you won't be buying a house "cash". Instead, you'll need to borrow money from the bank. I'll give you an easy trick to figure out how much 'home' you can afford!
Simply multiply your TOTAL gross household income (before taxes) by 3. For example, if you make $150K/per year combined household income ($150,000 x 3 = $450,000) you can afford a $450,000 house!
Remember, this is just an estimate! If you have little to no debt, you could possibly buy a home worth much more. To be sure, get in contact with a lender and get "pre-qualified" for a loan before you start setting up showings to your favorite homes.
2) Closing Costs
You're probably aware by now that you'll need a down-payment. That can be anywhere between 1%-20%, (or 0% down for a VA loan!) but don't forget to save some extra money for your closing costs.
Usually, closing costs will run you between 3-4% of the total purchase price. Have that ready before hand, so it doesn't catch you by surprise!
TIP: Everything is negotiable. Don't be afraid to ask the Seller to cover some/all of your closing costs!
3) Credit [FICO Score]
Do you have good, fair or poor credit?
If you know your FICO score by heart, you're already ahead of the game!
If not, no worries! Plenty of websites (and probably your bank) offer FREE credit checks nowadays.
Check your credit score. The higher it is, the better!
Remember, your credit doesn't have to be "perfect", but it's recommended you get your FICO score up to at least 600-620 before trying to get pre-qualified for a loan. Higher FICO score usually equals lower interest rates.
Have you ever searched through Zillow and found the PERFECT $2.7 million dollar home?
Do you have taste that exceeds your budget? #Same
The reality is unless you have unlimited funds, (if you do, that's awesome by the way!) you likely won't get everything on your 'wish list'.
Repeat after me: "It's going to be okay."
Let's go into these showings with the proper mindset. For that, we'll create two lists:
List 1: MUST HAVES - These are features or things you absolutely can't live without. For example: You NEED the home to be in "this location" or have a certain lot size.
List 2: NICE TO HAVE - I know you want hardwood floors and a shiny quartz counter top, but these are things you might be able to live without temporarily and add later.
Don't be afraid to ask lots of QUESTIONS, even before going out to see a property.
Here's a list of questions to help you get started:
How long has the home been on the market?
Are there any offers on the property currently?
What year was the home built?
Does it have shutters and/or impact windows?
How old is the roof?
When was the last time it was tented for termites?
What School zone is the property in?
Is the home a CBS (Concrete Block Structure) or Wood frame?
Now you're ready to get out there and take action!
I hope these 5 tips helped you gain the confidence needed to take the next step in the home buying process. Have any other questions?
Ask away! We're always happy to help.
JONNY & MARIA QUINTANA
305-801-1893 | RealtorJonny@gmail.com
Jennifer Homes Realty