Owning a home is at the pinnacle of the American Dream and it is easy to see why. It provides security and stability while checking a box off your life to-do list. For many, owning a home is a sign of success and a way to show how hard they have worked. Yes, owning a home is a wonderful thing, but it is also a big responsibility. Oftentimes people don’t realize how big of a responsibility it can be and end up with more than they can handle, especially financially. Remember, the more you educate yourself about the process beforehand, the less stressful it will be, and the more likely you will be to get the house you want for a price you can afford. When it is done, you will have the confidence that comes from successfully negotiating a major step in your life.
Before the purchase
Before looking at any listings, look at your finances. Completing a financial health check-up will help you determine how much you can afford and if you are ready to take on the additional financial responsibility.
ü Do a credit check
o You can get a free credit report from each of the three main agencies once a year. It is good to review and look for any discrepancies.
ü Start saving
o Start saving money ahead of time for a down payment, you should aim to have at least 3.5%-20% down.
ü Pay on time
o Making payments on time is crucial, one missed or late payment could bring your credit score down.
ü Think before switching jobs
o Lenders like to see stability, try not to switch employers until after purchasing. If you must switch staying in the same career field will show lenders same career but better job opportunity.
It’s time to buy
Once you have done your financial health check-up it is time to start house hunting. You can choose to use a Realtor, but you don’t have to. Using a Realtor will cost more, but you don’t have to do all the leg work. We know a great group of Realtors right here in Dayton!
ü Determine what you want in a home
o Create a list of what you want in a home. Split it into two categories, wish list and must have, just remember to be flexible
ü Figure out what you can afford
o Probably the most crucial step is figuring out how much you can actually afford, we found a great online calculator for you to use.
ü Get Pre-Approved
o Sellers will take you more seriously if you are Pre-Approved. We recommend staying with a local lender (especially a credit union) to receive more individualized attention and a quicker turn around time.
ü Make an offer
o When you find a home you are serious about, make an offer. Once the offer is accepted you are close to owning a home!
ü Finalize the purchase
o After the sellers have accepted your offer, your lender will walk you through the remaining process and outline exactly what they need to finalize the paperwork.
You finally own a home, now comes the fun part. You can customize your new home and make it your own. The work isn’t finished though, it is just beginning.
ü Keep saving
o It is important to keep saving money, even if it is a small amount each week. Continuing to save will allow you to plan for unexpected expenses, like your heat going out in the middle of winter.
ü Keep up on maintenance
o Keeping up on the maintenance will end up saving you a lot of money. Servicing items, such as your water heater, even once a year will prolong the life of those systems.
Don’t forget to enjoy your new home!
You worked hard to get here, now it is time to enjoy it. Should have questions at any point in the home buying process, or after, one of our mortgage experts would be willing to help. You can call us at 937-859-6260 ext 2302.
For more financial tips and how-tos visit our blog or follow us on Facebook or Instagram, @Rivervalleycu.
Happy house hunting!