If one of your New Year's resolutions for 2018 is to purchase a home, or save for a down payment and related costs, following are some steps to help get you started.
- Determine how much you can afford. If you're just starting to think about buying a home, you can get a very rough estimate of your affordable home price range by multiplying your annual gross income by 2.5. However, you'll also need to consider down payment and closing costs, your monthly expenditures (current and future) and a financial cushion for life's unexpected emergencies.
Get Pre-approved. If you're a serious buyer and ready to begin looking for your home now, reach out to your lender to get pre-approved. Your lender will evaluate your 4 Cs to determine how much money you can borrow. Having a pre-approval letter in hand allows you to house hunt with greater confidence and alerts sellers that you're a serious buyer.
It's estimated that 40% of America's families make New Year's Resolutions. That's more than watch the Super Bowl. Stick to your goals!
- Save and stay focused. If saving for a down payment and associated costs is part of your goal, work with your lender or a housing counselor to develop a responsible, yet reasonable, savings plan. Stick to this plan and keep your end goal in mind.
- Identify your "must have" home attributes. Take some time to answer the following questions to narrow down your home search. Where do you want to live and how far are you willing to drive to work and/or schools? How many bedrooms and bathrooms do you need? Do you need a garage or perhaps a backyard? Does the home need to be move-in ready? What qualities would make a house a deal breaker without even looking? More.
- Get educated. No matter if you're still saving or ready to move forward and look at homes, getting educated on the homebuying process is a must and will provide a much better homebuying experience. Learn more about:
- The important role of mortgage rates.
- Which mortgage product is best for you.
- The importance of credit and how you can improve it.
- Your down payment options.
- How to assemble your homebuying team.
- The financial obligations of homeownership.
Preparing to buy a home is a very exciting time. Just remember, the better prepared you are, the better your experience will likely be. Visit My Home by Freddie Mac® for information, resources, and tools to help you understand your options, the homebuying process and the importance of finding the right team.