Buying a Home
Homebuying tips to help you get ahead
Homeownership is a major milestone in life, but it requires plenty of time and money. Figuring out your budget can be complex. You want to purchase as nice a home as possible, but you want to be able to afford it, too. What you can afford depends on the size of your mortgage, mortgage rates, costs of homeownership, your other expenses and your income. One rule of thumb to consider is that the total of your mortgage payment, property taxes and insurance should be no more than 28% of your household income. Here are some other things to think about:
- Don't buy if you can't stay put. If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner - even in a rising market. When prices are falling, it's an even worse proposition.
- Start by shoring up your credit. Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct and fix any problems you discover.
- Aim for a home you can really afford. The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
- Get a preapproval before you begin searching for a home. SWSFCU can help you with preapproval so you know how much money you will be able to finance. This will help you determine if a particular price is realistic for you.
- Buy in a district with good schools. In most areas, this advice applies even if you don't have school-age children. When it comes time to sell, strong school districts are a top priority for many home buyers, thus helping to boost property values.
- Get professional help. Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.
SWSFCU can help make the dream of home ownership a reality. Contact our loan department at (925) 228-4545 which provides you information to contact CU Homeland (800-795-1333) whom we’ve contracted with for real estate loans. Apply for a no obligation home loan pre-approval.