Purchasing a home and becoming a homeowner can be both exciting and stressful at the same time. Glenn Brunker, who is the president of Ally Home gives some great expert advice on setting yourself up to become a successful homeowner.
Set a budget
This should be one of the very first steps you take. You need to determine a price range before you start your search and in order to do this, you will need to set up a budget.”The amount you spend on a home should be a number you feel good about at closing time and continue feeling good about as you make monthly payments,” says Brunker. You should never take on more house than you can afford. A great way to determine what you can afford is by using a debt-to-income ratio (DTI) calculator.
Save for a down payment
A down payment can be a big chunk of change right at the beginning. You will want to start saving for a down payment while you are beginning the home-buying process. A great way to do this is by finding different ways to add to your savings.
“Look at your monthly expenses and income and try to find areas where you could be saving more,” Brunker says. “Is there something you can cut that will help you contribute to your down payment fund? Whether you begin saving $100 or $1,000 per month, any contribution to your savings can get you started in the right direction,” comments Brunker.
Consider mortgage rates
The current mortgage rate can also help determine how much home you can afford. Currently, rates are higher than they were just a year ago so the buyer’s market might be disappearing. Bunker advises to, “remember purchasing a home is typically a long-term investment, and it’s important to set your financial goals while remaining flexible. Prioritizing your big picture over waiting out the market could pay off for you in the long run.”
Research lenders
When choosing a lender, it is best to shop around. Different lenders have different options and terms. You also want to choose a lender that works well for you. A lender can give you some home-loan expert advice to think about when you are searching for a home.
Enjoy the process
Remember, this is a big milestone in your life and it is exciting! You want to stop and enjoy the home-buying process. Know what you want and what you need. Make a list of must-haves and wants and remember to keep an open mind. “A home is likely one of—if not the—largest purchases you will make in your lifetime,” Brunker says. “Why not make it a positive experience?”
Even if you are not ready to make the move into homeownership in 2023, you still want to keep these tips in mind for the future. “I believe you should always be thinking of homeownership. Even if that goal is not attainable or desirable for you right now, there are things you can do today to set yourself up for possible homeownership in the future,” Brunker says.