Buying a home will likely be the most significant purchase of your lifetime. Your decision will not only impact you and your family’s lifestyle, it will also have an enormous effect on your finances. Whether this is your first home or one of many, you must be careful every step of the way!
Ready to Buy?
Whether you’re looking for a place to raise your family, buying a fixer-upper to rent out, or want to invest in real estate, we can help.
Property ownership is a wise investment since it involves very little risk, whether your intent is to build equity or to get a good return on your investment. However, you need to make sure your finances in order before you move ahead.
Are you over being subjected to your landlord’s whims? Have you figured out that it makes more sense to pay a mortgage rather than rent? Is your rental now too small? Have you decided it’s time you invested in real estate?
Knowing exactly why you want to buy will guide you in making the right choice.
If your income has increased, you may want to stop paying rent and invest instead in a home.
Real estate makes an excellent investment because it’s more tangible and less risky than other options in terms of getting a good return on your investment.
You can get a realistic picture of where you stand financially by doing the following:
Add up your fixed monthly expenses.
Add up your monthly debt payments.
Determine your net worth by calculating how much remains after deducting all your financial liabilities from the total amount of your assets.
Your Credit Score
Your credit score is enormously important when it comes to how much you’ll be able to afford in a home. This is one of the first things you’ll want to check before you start looking. You can do this on your own or with your bank or another lending institution.
There are two primary credit reporting agencies that you and/or your lender would check with to determine your credit score: Equifax and Trans Union. You can also check your credit score with them online.
If you don’t already have a mortgage lender lined up, we would be happy to make some recommendations. We are routinely in contact with highly reputable lenders who make loans in all areas of real estate including construction, residential, commercial and investment.
What Can You Afford?
There are two basic affordability calculations that will help you determine how much you can afford each month as your finances stand now:
Your cost of housing should not exceed 32% of your gross monthly household income. This cost would include your mortgage payment (principal and interest), taxes, insurance and utilities.
The total amount of debt you pay on monthly should not be over 40% of your gross monthly household income. This includes the cost of housing plus auto loans and other credit payments.
These figures will reveal your overall financial situation. Your lender will also look at these calculations when deciding how much they would be willing to approve you for a home loan
THE RIGHT AGENT
Having your lender give you a pre-approval letter for a specific mortgage amount they’re willing to lend on a home can smooth your home search substantially. This way you can avoid wasting time looking at homes out of your price range and any offer you make will be taken seriously.
Here is the information your lender will want you to provide:
Government issued identification, like your driver’s license.
Employment information verifying your salary, like pay stubs or a letter from your employer
All sources of income
Information on all bank accounts
Information on outstanding loans and other debts
Verification of all financial assets
Amount of deposit and down payment as well as the source of the funds
Verification of source of funds covering the closing costs
Since buying property involves a fairly complex process, an experienced Buyer’s Realtor can be a huge benefit. Here’s why:
The homebuying process is a daunting task for most people and to make matters even more complicated, the process is always changing. It’s crucial that you work with someone who is not only experienced, but extremely reputable. With so much at stake, many homebuyers find it highly beneficial to work with an entire team, rather than just one individual.
With the Path Home Team Team, you have all of us looking for just the right property for you! Our licensed agents and staff work together, combining all our knowledge and skills to get you the home you want at a price you can afford.
In choosing a real estate team or an individual Realtor, you would want to look for the following:
Real estate is a continually changing business, so in order to keep up with the changing market, new laws, code regulations and etc. a good Realtor is continually learning. The professionals on our team are constantly getting updated on all the new developments in the industry and in our area. This is what keeps us at our best.
It’s important that you have a full-time real-estate team or individual Realtor whose expertise is in the area you’re looking to buy, as well as in the type of property you’re interested in.
Fully Available & Committed
You need an agent who can act on a moment’s notice so that the home you want doesn’t end up with another buyer. Things move fast in this industry so you need someone that you can reach by phone, text message, email or in person at any time, whether it’s an emergency or for just a question. We are in constant communication with the clients we work with and all you need to do is let us know which ways work best for you.
You’re going to be spending a lot of time with your agent, so you want to make sure the two of you (or you and the team) have an excellent rapport. You need to be totally comfortable with your agent and be able to trust their guidance through every stage of the process
We at the Path Home Team are committed to handling every transaction with the utmost urgency and care so that our clients get the home they want at a price they can afford. This takes a lot of teamwork, skill and expertise. We promise to make the process as stress-free as possible and to keep you informed every step of the way and to act on a moment’s notice if need be until the moment you close on your new home.