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Planning for your Home Search

Planning for your Home Search

Annette Bui| Updated May 13, 2020 | Mortgage Programs 101

Planning the process to buy your first home can overwhelming to many people and it doesn’t have to be that way. Looking at the process simply, there are key elements to consider:







Income

One of first things to consider is your annual gross income, consistency in the same profession for the last two years would be the best-case scenario. If you are self-employed, receive commission or bonuses it is best to look at the income conservatively if your income trends upward or if its decreased in the most recent year many lenders will use the lower amount.

Monthly obligations


Monthly debts to consider will include any revolving credit card debts, student loans, installment loans, property tax, insurance, income tax installments. Anything that appears on your credit report along with other expenses.

Down payment

Consider how much cash reserves you have, while 20% down is ideal there are many programs that allow as low as 3% down or 100% financing for Veterans or agricultural loans.

Lifestyle-consider how much your other expenses are on a monthly basis from entertainment to dining out. Most people spend more than they realize, it is smart to look at all your statements over the last 2-3 months to see where all your money is going. It is time to evaluate how much you may need to cut out of your daily expenditures on entertainment, traveling and monthly housing expenses.

Terms of the loan

The most common loan program is for a 30-year fixed, if you can afford a lower term and qualify for a better interest rate you will get a larger savings over the lifetime of your loan


Home Maintenance costs

Once you are a homeowner, there is no longer the option to call the landlord or staff maintenance to fix things around your home. It is your sole obligation and many unforeseen expenses can get expensive if not budgeted for.

 

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