Buying a house is a big deal. It’s not a decision that should be taken lightly, and it can take what feels like a lifetime to finally close on your dream home. I daydream about our future home and where we will settle down, but I have made a few decisions that helped lay the foundation for our home buying future!
Tips for First-Time Homebuyers
Buy what you can afford. Don’t go crazy with your budget even if you want to! Stick to your price range. A rule of thumb is to look at houses that are about 2.5 times your annual salary.
Make sure your salary can afford a mortgage. Ideally your housing payment shouldn’t be more than 28% of your gross household monthly income. You can use an online mortgage calculate to help you find what is best for you.
Develop a solid financial history. Lenders are going to look at your income, assets, job history, credit score, total debt, and what you can afford to invest in a down payment.
Shop around. Do you know which neighborhood you want to live in? Are you familiar with the school systems? You might not have children now, but maybe you will one day. It’s not a bad idea to consider your potential growing family before settling.
Save for a down payment. The traditional estimate for a down payment is 20% of the purchase price of the house, which can lower your monthly payments.
Don’t forget about closing costs. Look them over carefully, because they can vary from one lender to another.
Get to know your mortgage. They come in a variety of offers and terms including your budget, the amount you can afford to put down, the interest you will pay, and the length of the loan. All mortgages have pros and cons, but it is important to understand the basics before signing anything.
There are a few things that I’m going to be looking for in my new home. First, it needs a sweet view! We are lucky to live near the water now, and when we are ready to buy, that is going on my shopping list. I also need to have a space that is available for an office along with a guest bedroom.
When I’m ready to start looking, I know where to go. CapitalOne’s goal is help first-time homebuyers understand how the home loan process works, which is why they launched a new online learning center. The Capital One Home Loans Online Neighborhood is a free online resource where you can learn all about home buying. It covers all stages of the home buying process – from deciding whether now is even the right time to buy and how much home you can afford, to the documents you need to apply for a mortgage.
Buying a home is an important process, but certainly not a simple one! Capital One’s new online resource lays the groundwork with a glossary of terms you should know, an overview of the loans available and more.
What tips do you have for first time homebuyers? What feature does your dream home must have?
I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.
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