Outlining Plans to Purchase a Home in 2017

David MantekThe crisp, new year has sparked a fresh interest in homeownership for many. Rather than penning a long list of untouched resolutions for the new year, many have set their sights on property ownership.

Real estate investment takes a great commitment. Switching gears, and transitioning from renting to buying is a mental and financial endeavor that begs for preparedness. Arming oneself with knowledge is the best way to approach and address the daunting process.

Beyond everything, known how much of a loan you qualify for. Often, potential buyers don’t know that they should be well aware of the loan-to-value ratio when calculating how much they can afford. A high loan-to-value ratio could negatively impact price. Also, it could lead to added expenses, with regards to private mortgage insurance.

Debt-to-income ratio knowledge is valuable and essential when determining if the monthly mortgage payment can be managed. The ratio can be calculated by looking at all monthly expenses (ex. Insurance, taxes, credit cards, etc) and the monthly gross household income. Monthly debt refers only to accounts appearing on the credit report. The debt-to-income ration shouldn’t exceed 43 percent.

Lenders can offer guidance to homebuyers, helping to calculate monthly and upfront expenses. They can also recommend mortgage options that will aid in alleviating costs associated with purchasing a home.

Prepare a budget ahead of consulting a lender. That means addressing property tax rates and preparing for the unknown. A survey conducted by TD Bank’s First-Time Homebuyer Pulse Surveys communicated that 17 percent of first-time buyers don’t set aside money for unexpected costs and repairs. That extra cash can make all the difference.

Your credit score is important. There are countless other important factors when comes to finding and securing a home, but you have to be able to qualify for a loan, which requires an appropriate credit score. All accounts under your name should be accurate, and if it isn’t, address this immediately because changes to your credit score can take months to fix. Consider the number of accounts that you’re opening and closing. Likewise, consider your credit card payments, those student loans, and your cell phone bill, all of which can affect your credit score.  

Learn more about owning a home in 2017 by reading “6 Things You Need To Know If You Plan To Buy Your First Home In 2017,” which was recently published on Forbes.

That article masterfully addresses how the important things one needs to know when seeking out their dream home in the new year. For instance, mortgage rates have inflated since Trump took the oval. Also, the article touches upon the fact that couples aren’t the only ones presently interested in buying a home; metropolitan areas are still your best bet when searching for investment property, and you should save enough for that down payment. Additionally, the article addresses the fact that your entire financial framework will affect your potential mortgage rate and you should seek out at least two realtors and mortgage lenders when you’re searching for guidance.