Here are your top financial tips for reaching that goal…
- Create a mock budget of homeownership. Include expenses such as mortgage, utilities, homeowner’s insurance, property taxes, association fees, maintenance/upkeep and commuting.
- Generate a sizeable down payment.Traditionally, you’ll need a down payment of 20% of the home price. That means for a $250,000 home, you’ll need $50,000 up front. Anything less then 20% will cost you. Also include private mortgage insurance (PMI), closing costs (3%-6% of the purchase price), property taxes, initial repairs, moving expenses, and decorating costs.
- Secure a reliable source of income.Take a good look at your future cash flow abilities. Will you be able to make your mortgage payment six months from now? How about six years from now?
- Have an emergency savings fund. Try to build enough cash on hand to cover three to six months of living expenses just in case something happens to disrupt your steady income.
- Keep your debts under control. Lenders look at your debt-to-income (DTI) ratio. Generally speaking, they want to see that your monthly housing costs, including principal, interest, taxes and insurance (PITI) will not be higher than 33% of your monthly gross income. And you’ll be in great shape if your total debt payments will remain below 38% of your total pay. Try to pay down your large outstanding debts before applying for a new mortgage so you can qualify for as much as you’ll need. Avoid taking new debt six months to one year prior to making your purchase or you can throw the ratio off.
- Make sure your credit report is in good shape. The government allows you to check your credit history free once a year. Look it up a www.annualcreditreport.comor www.freecreditreport.com.
- Make a long-term commitment. Typically it takes 3-5 years to recoup your buying and selling costs if you want to turn a profit and you’ll have to pay capital gains tax if you live in a home for less than 2 years.
- Be prepared to become your own landlord. With your own home, if it’s broken, you fix it or you’ll have to pay someone else to fix it. Will you have the time, energy, or desire to maintain the property?
- Do additional research. Ask your Real Estate Consultant and Mortgage Specialist for advice on what other info to research.
All my best,
Myra Spano, REALTOR®
About the Author:
Myra Spano is a service and results oriented real estate agent with her client’s goals as top priority. Myra is recognized as a top producing agent in her office in Virginia Beach and enjoys working with both buyers and those selling their homes.
For information about purchasing a home in Virginia Beach, visit her website. This site is focused on homes available for sale in Hampton Roads, Virginia. Email, call or text to make an appointment begin your home search.
If you are considering selling your home in Virginia Beach or one of the surrounding areas, visit the seller’s website to request a Free Market Analysis of your property.
Myra Spano & Prudential Towne Realty is awaiting to provide the real estate guidance you need. Contact us now to make your home dreams come true!