The real estate market has gone through several changes over the past few years. Today there a few more changes happening as a result of our improved economy and rising rents, making it a good time for buying a home as a long term investment. Likewise, you will notice that some financial institutions are following the trend and offering favorable programs for financing first homes or upgrading to a larger home for more space.
Median home prices are changing daily, and before you or other interested buyers head out the door it’s a good idea to head to your local, trusted banker first and find out just how much house you can afford to purchase.
5 Easy Steps To Purchasing Your Dream Home
- Know Your Bank
Your first bank meeting should accomplish two goals: (1) you can determine your realistic budget and affordability and (2) you hold the cards in making a solid offer on the house you want by being prequalified. Your local bank is there to help with what will likely be the largest investment you will make in your lifetime. This is why it is so important you establish strong, ongoing relationship with your local and trusted bank to help expedite the process, and avoid midstream problems that can prevent escrow from closing.
- Early Research
Make a wish list of your questions and worries along with the size and features you want in a home. Next, start monitoring the homes for sale in the neighborhood, and keep an eye on the listed price and the final sale price. The difference between the listed price and the final selling price will give you and your banker a better idea of how much money you’re going to need to purchase a home.
- How Much House You Can Afford
The loan officer is going to help you find the right program that fits your budget while you’re juggling student loans, credit debt, family and career. There’s an industry formula for calculating your potential mortgage against your annual earnings and current debt. This is the most valuable information when it comes to purchasing a home.
- Loan Terms
What many people don’t realize is that there are several types of home loans that include extra fees and down payment options, including private mortgage insurance, unless you’re putting down twenty percent or more. Whether you are looking to purchase a home in the country or a small town house, you’ll be surprised at the comparison of your potential mortgage payment to renting an equivalent home.
- New Budgets
This is a serious business transaction and long term commitment. You need to fully understand the terms and conditions of the loan, as well as the out-of-pocket expenses for closing and transferring the property title into your name. There will also be new expenses for living in your dream home. As an investment, your home needs to be maintained to hold or add to its value when it comes time to sell in the future. Other common day-to-day expenses include utility bills and homeowners insurance to cover replacement costs.
As a local and trusted bank, we would love to work with you on financing your next home purchase! Call 877.672.4543 to speak with a mortgage loan officer, fill out our online mortgage application or visit a Mercer Savings Bank location near you today.