Welcome to our buyer series! This is the first blog in a series of informational posts that is designed to help you if you’ve decided to become a homeowner. Here is a broad overview, and then we hope to take you on a journey…from a buyer’s perspective showing you step by step the way to reach your goal.
We have a great booklet that we will share with you when we meet, that also takes you through the process of buying your first home. Your first step is to find out what your maximum price point really looks like. First, you’ll want to know what the typical first-time buyer homes are priced at in the area you’d like to live. Next, you’ll want to find out what your home-buying “budget” is. Just like grocery, car or clothes shopping, we can’t shop until we have a budget, and here’s how you get that:
Talk to a lender. All Lenders are not the same, so if you don’t know a trusted lender, we can guide you to some fabulous lenders that we work with and know will do a great job for you. You can “shop” for rates and lenders to find the best fit for your situation.
Once you have chosen your lender, they will run your credit, ask you for some confidential financial information (paystubs, W2’s, tax returns…etc.) and will pull together your financial criteria to get a good shopping number…and voila…your budget!
Your lender will tell you the maximum amount you’ll qualify to purchase but then you will decide how much you actually want your monthly payments to be. Your qualifying number should break down to include your total combined payment amount, or what we call the PITI. PITI includes your Principal Mortgage amount + Monthly Interest + Monthly Property Taxes + Homeowner’s Insurance…hence the term PITI. If you’re not able to put 20% or more down toward your purchase, that’s o.k…your lender will find a loan program that will work for you. However, with anything less than 20% down you may need to factor in yet another acronym, the PMI or Private Mortgage Insurance along with that PITI payment. And finally, if you’re buying into a Homeowner’s Association, whether that’s a condo or a single family home in a community that has an association, there will be an additional acronym…the HOA or Homeowner’s Association Dues (you may have heard of them as HOA Dues) that you’ll need to consider in your budget also.
Lots of crazy acronyms for getting ready to go home shopping, right! Having that budget though is critical to get us started. Watch our blog for the next steps in the Journey to Homeownership.