If you are tired of renting and you think you could be in a home and paying on a mortgage for a lower monthly cost than your rent, it's time to apply for a home loan. Home buying can be a fun process, and there are ways to minimize stress and confusion.

Plan your financing before meeting with an agent to look at properties. Once you know what the financial expectations are, you can start putting together a list of things you want in a home. The average home buyer spends about 14 years at the property before selling, so be sure to pick out features in a home that will suit you for the future and not just for right now. Take these steps to start the home-buying process.

Set Your Budget

This may be the most important thing you do before house shopping. You need to set your budget by talking with home mortgage lenders and getting approved. Things that will affect your budget for a home loan include:

  • Wages
  • Debt
  • Credit
  • Savings

The bank will look at the amount of money you have coming in consistently, along with how much debt you are liable for, to determine how much you can afford to pay each month. If you have a poor credit history, this may cost you more over time because you will have a higher interest rate.

Prepare for Out of Pocket Costs

There will be out-of-pocket costs to buying a home. Everything cannot be put into the mortgage. Some of the expenses to be prepared to pay include:

  • Home inspection
  • First year of homeowners insurance
  • Closing costs
  • Down payment
  • Application fee
  • HOA fees

You need to have these costs readily available, and the cost for these things will fluctuate based on the value of your home, and the type of loan you're applying for.

Outline Wants and Needs

Next, you will want to outline wants and needs with a real estate agent. Talk about the following details for the home:

  • Location
  • School district
  • Square feet
  • Bedrooms
  • Property

If you are looking for a home that has an attached garage, main floor master, or other details, let your real estate agent know so they can find you the best house.

When you are making the decision to buy a home, this is a serious investment that you want to get right. Talk with lenders in your area to get approved, and start looking at homes that meet your criteria.

For more information, contact a local company, like Big Valley Properties.

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