Choosing Your First Home

Buying

Finding and purchasing the right home can be exciting and terrifying for first time buyers and seasoned vets alike. From the style of the house to the location to the type of appliances, there are countless factors that can go into such a big purchase. The following short checklist outlines the most important things you should think about when you're on the hunt for a new home.

1. Define your budget:
It's never fun to fall in love with a house that you can't afford. Avoid the heartbreak by taking the time to analyze your financial situation before you begin the search. Start by reviewing your credit score, monitoring your debt and choosing an appropriate down payment. A half-hour phone call with a financial professional can help you get an accurate picture of your financial situation and the loans you are eligible for. Ask me for a few referrals who I personally trust and know can get you on the path to purchasing your next home!

Looking at your debt-to-income ratio is one of the ways that creditors establish how qualified you are for a mortgage loan. Your debt-to-income ratio is determined by taking your monthly debt (think current mortgage payments, student loans, car loans, etc.) and divide them by your gross monthly income. Ideally, you want to keep that ratio at 43% or lower. 

A key factor in getting the best mortgage rate depends on how much cash you are able to put down initially. The rule of thumb has been 20% down. Anything below the 20% may require mortgage insurance and could cost you more on the loan long term. Your mortgage professional will guide you to the right loan program that makes sense for your budget and your lifestyle!


2. Your Must-Have List:
Always search for homes that meet your "must-have" list. A must-have list encourages you to write out exactly what you need in a new home and will significantly aid in narrowing down the scope of your search. Focus your list on the high-level, pricey aspects of a home. Minor changes such as painting and smaller renovation projects can be worked on down the road, but changes that add up in time and money should be taken into consideration. Some buyers prefer a "fixer upper" so that they can build equity in their home over time. Others prefer "move-in ready", which may cost more. The old adage "know thyself" is important as you get started on your home search. So be clear on your non-negotiables and be flexible on the small stuff that can be fine-tuned after you move in. 

Here's a form that can help you focus on the right questions that will help me begin the search for your next home:

http://www.breakthroughbroker.com/img/site_specific/uploads/Buyer_Questionnaire.pdf


3. Location, Location, Location!
While the importance of location is often a no-brainer, the location of your potential new home serves multiple purposes. Location will impact your daily life and happiness as well as the current cost of the home and your home's future value.

When looking at location in terms of resell value, you want to look at a multitude of things: school districts, crime stats, and the neighborhood & community. A little research can answer most of these questions, and this website offers Market Insider, a tool to give you details on all these factors and more! Besides looking at the current stats and trends, take this information and think about what the value of the area might be in 5 or 10 years when you potentially could resell your home.

Along with the resale value, analyze the location of a home from the perspective of your well-being and happiness. Things such as your daily commute, surrounding noise, and community will greatly shape your experience in the home.

Along with this checklist, seeking guidance from a professional is always a good idea! A professional REALTOR® like me can offer a wide array of skills and expertise, from the showing of a home to the endless paperwork. You can count on me to guide you through the process and assist in your home buying decisions.

Hopefully this checklist provides you with a guide to start your journey towards the right home. When you're ready to start looking, don't hesitate to give me a call!