Since the pandemic hit, many people began to realize how important that place you call home is. 2020 became the year of house hunting and home renovation projects and it’s no wonder why. Home is simply the place to be these days.
More Reading: 5 Things to Consider When Purchasing a Home
What Everyone Wants
More space and comfort. Joanne Shapse, a real estate salesperson at Houlihan Laurence in Scarsdale, told Bloomberg Radio’s Denise Pellegrini that instead of just a good location – it’s all about the square footage and key amenities. Listen here.
Can You Afford Your Zillow Obsessions?
Perhaps. This year, the real estate market is still going strong. Homes are more expensive because of this madness. So can you afford a new home in 2021? Yes, you can afford it…if you make the right calculations, that is.
I’ve mentioned before that my daughter is homeschooled. Lately, she’s been very interested in real estate, how it works, costs, expenses and more. So I took it as a teaching opportunity. I’d say something like, “ok, let’s say the home you want to buy costs x amount. You would need to put down x and pay x monthly. You’d also need to budget for utilities.
She seemed to understand but I wanted to find an easier way to teach her. I discovered a mortgage calculator online. Not only was this site so easy to use but very educational. I knew I had to share this in case any of my readers were in the market for a new home.
And it didn’t stop there. Ok, we have a mortgage calculator but can you afford that home? This website, Mortgage Calculators, is a free tool to see your minimum required income.
Tips for First Time Buyers
All of this got me thinking to when we bought our home in 2013. We were new to the game but luckily had connections that were super helpful. My mom, for example worked with lawyers and realtors- it always helps to know people in the industry. But not everyone has that luck. So here are my best tips for first time buyers.
- Check your credit. Pay off any debt and do not get into a new car payment until you buy the house. This can affect approval for a mortgage loan. Most lenders will want a 580 (minimum) and up.
- Save a good amount of money for the down payment. (3% and up)
- Budget for a new home. Determine your budget and be sure you can afford the mortgage, utilities, and taxes; etc. Also, know your DTI (debt to income ratio).
- Research loan programs. There are many first-time buyer programs (like an FHA loan) and special rates- the lower, the better.
- Get pre-approved for a mortgage.
- Know what you want in a home. Style, square footage, number of rooms, and location; etc. Make a wish list for when your realtor asks.
- Find a good realtor. (If you don’t like one, you can always try another)
Home Owner Goals
You can totally do this. The best feeling is owning a home that is yours. I remember signing our names and getting the house keys- it was such a freeing moment. It may be a bit of a process at first but it will be worth it.