Use an online mortgage calculator to get an idea of what your monthly mortgage payment would be if you bought today. This can be a helpful first step if you are trying to determine if buying a house is the right option for you, and financially feasible. In areas like Denver, you might actually find out your monthly mortgage payment will be cheaper than your current rent!
Look at your budget and determine how buying a house fits into it. I recommend that buyers spend NO MORE than 28% of their income on housing. More than that, and you risk becoming house-poor. Right now, in Denver, renters who live and work in the Metro Area, are spending over 30% of their pre-tax income on rent. Another example of why buying might be a better option than renting if you find yourself in that category.
Calculate what your monthly housing cost would be. There is more to your monthly housing cost that simply your mortgage. You will also need to take into account taxes, home insurance, and utilities. Taxes and insurance can sometimes be a yearly cost, but it is smart to put away a monthly amount towards the larger payment to avoid surprises and monetary shortage.
Find out how much you’ll be paying in closing costs. When buying a home, you must take into account the upfront cost of settling on your home. Closing costs include origination fees (charged by the lender), title and settlement fees paid at closing, as well as taxes and other prepaid items like homeowner’s association fees or insurance. Talk with your Realtor about what the average closing cost is for your price point.
Look at the big picture. Consider if you are ready for the other expenses and effort that come with home ownership. While buying a house is a great way to build wealth, owning a home can be expensive and labor-intensive. Unexpected costs can come up that including cost for new appliances, roof repairs, and plumbing issues that come up. There is no landlord to turn to with home ownership, and these costs can quickly drain your bank account. Side note: have your Realtor negotiate a 1 or 2 year home warranty.
Find a GREAT REALTOR. As a buyer it is vital that you have a Realtor working with you as a buyer’s agent for a few reasons. The first is that we can give you information about the current real estate climate; are housing prices going up? Will one area build equity faster than another? Etc. The second is that to see the inside of a home that is on the market, you will either need to find out if/when they are having an open house, or have a licensed Realtor show you the property. One mistake people make when wanting to see the inside of a home, is calling the listing agent (the name/number on the sign in the yard). While this will undoubtedly get you access to the home, this agent is not looking out for your best interests. If you see it and decide you want to make an offer, they will simply ask you want you want to offer and write the paperwork. They will not negotiate for you because their primary interest is getting the seller a good deal…. not you. Bottom line: if you want to save time and money, call a reputable Realtor, and have them represent you as a buyer.
Get your docs in a row. Gather pay stubs, bank account statements, W-2s, tax returns for the past two years, current loan statements and credit lines, and names and addresses of your landlord(s) for the past two years. Having all this paperwork ready for your lender will save you TONS of time and expedite the process of getting preapproved.
Find lenders and get preapproved. In order to make an offer on a house, you will need to provide a preapproval letter. Ask your Realtor who their preferred lenders are and shop around for who can get you the best rate (and offers the best service). This will also determine what price ranges you can look in. You’d hate to be looking and falling in love with homes you can’t afford.
Author:Jason Peck Phone: 720-446-6301 Dated: February 21st 2017 Views: 738 About Jason: ...
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