Being ready to buy a home means more than just being tired of living in a loud apartment complex or an expensive rental home or your parents’ basement. Being ready to buy a home means having your finances in order before you even think about looking for homes for sale Flower Mound TX. Money and mortgages are the boring side of house hunting but if you don’t worry about them first, you may never get to the exciting part. What should you do before you start your home search?
1. Boost your credit score. Our credit scores follow us everywhere, especially into home buying. If your credit score is in the high 500s, you may qualify for a home loan but you’ll have to make a higher down payment and your monthly mortgage payments will be higher. Credit scores in the mid-600s are better and scores in the 700s are the best. As your credit score goes up, your interest rate goes down. Check your credit reports to make sure everything is accurate and up-to-date as far as payments and balances go. And stop applying for new credit at least a year before your start your home search.
2. Decide how much house you can afford. Your house payment and related expenses like taxes and insurance shouldn’t exceed 28 to 31 percent of your monthly income. There are many websites online that will help you calculate mortgage payments so that you know the maximum you should pay for a new home to achieve the monthly mortgage payment you can afford. Once you have a top number, don’t go over.
3. Save money for the down payment. Almost every kind of loan, excluding VA home loans, require a down payment. These usually range from 3.5 percent to 20 percent of the cost of the home. Also remember closing costs can average in the $2,000 to $4,000 range depending on the cost of the house. Budget for this as well; don’t count on the seller paying your closing costs.
4. Get pre-approved for a mortgage. Before you look at homes for sale Flower Mound TX, go to your bank or a mortgage lender and get pre-approval for a mortgage. Once you’ve gone through the process, you’ll know exactly how big a mortgage loan you qualify for so that you won’t have to waste time touring homes you can’t afford. Also, if financing is in place at the beginning of the home search process, the closing will move more quickly and be more painless.
5. Remember your after-purchase expenses. In addition to saving money for a down payment and closing costs, consider keeping a nest egg for home expenses. When you become a homeowner, you take on the responsibility for paying for plumbing problems, termites, a new roof and every other expense that can crop up. Just because you can afford the monthly mortgage payment doesn’t mean you can’t be sunk by big, maintenance costs down the line.
Buying a new home a big responsibility. Make sure you have your finances in order before you fall in love with a home. When you’re ready to look at homes for sale Flower Mound TX, call Sean May Homes at 972-457-3002 to get started. And visit http://seanmayhomes.com to learn more about the home-buying process.