How to Buy a House

How to Buy a House

Owning a home has always been a fundamental tenet of the American Dream. It symbolizes opportunity, security, and freedom. Today, the American Dream has come true for many, but there still is a significant portion of the American population who could use some guidance in pursuing their dream of home ownership. Many people dream of owning their own home, but it mandates homework, legwork, and considerable effort on their part to ensure that the process goes as smoothly as possible. This task can, at times, seem complicated and overwhelming. But if things are taken step-by-step, you will soon be holding the keys to your own home!

Being a mortgage consultant for over seven years, I have been helping families to accomplish the dream of home ownership. I am proud to say that I have helped over one hundred and fifty families to become homeowners. Coming from a family whose parents worked very hard for over ten years in order to save their money so that they could buy their first home, I understand the sentiments of my clients and the importance of every step in this process. It is my wish to help you with your process of buying your house with these easy to follow instructions. And remember: buying a home is also an investment in both you and your family’s future.

Start by getting a blank file and call it – “My Homeownership Plan”

In today’s world, credit is almost everything. Having good credit can ensure that you get the best deal out there. The first thing you'll want to do is to get a copy of your credit report (which can be easily obtained from the internet) and start paying off all of the small balances due on your credit cards, and also resolve any credit disputes or delinquencies. Credit rating takes into account both how you use the credit you have (available) and whether or not you’re outstanding credit is too high for your income. After you have done all you can do to fix your credit report, I suggest waiting at least thirty days before you let anyone pull a credit report on you. Keep in mind that too many credit inquiries can also affect your credit rating in a negative way. And make sure to keep all of your records of faxes and conversations with the credit companies in the file as well.

The second step would be to figure out how much house can you afford – that is, how much of a mortgage payment (including your real estate taxes and your home insurance) you can afford on a monthly basis. I have a simple formula that has worked for all of my clients: you start by jotting down all of the expenses (car payments, credit card payments, utilities, etc...) that you currently have (except your current rent), and then subtracting the total amount from your monthly income. This will give you a ball park figure of what you should be looking to contribute monthly towards your mortgage payment (I would suggest putting 65% of this number towards your monthly payment).

After you have done this simple math, the next step would be to get pre-approved from a bank. This is a very important step and should be taken with some patience. You will want to work with someone who understands you and the importance of your decisions; someone who will give you an explanation (in detail) of the entire process, will give you all of the different programs available to you, answer all of your questions, and will be there for you for every step of the way. This is where someone like me comes into the picture. As a loan consultant, I would take all of your information - so you'll neet to be ready with all of your documents regarding income, assets, credit, and work history. Also, make sure to give me your file with all of the work that you have done so far so that I can give you an accurate picture. According to your needs, we will also discuss the different types of down payment plans available to you. That’s another reason why you would want to work with a very experienced individual in this field, because there are so many different mortgage programs out there, you want to make sure that you are being offered all that’s available (to you) so that you can choose the one that best fits your particular situation. Once I have processed your file, I will give you a copy of your pre-approval letter. This is a very important letter because this certifies that you are approved with a bank (with conditions) for a certain mortgage amount and a certain purchase price for the house. If this will be your first home, I will also provide you with a free first time home buyer’s seminar (which I strongly recommend that you attend). Only proceed (after this step) if buying a home makes more financial sense for you and your family than renting.

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