Tuesday, October 15, 2024 / by Ameil Gill
HOW TO PREPARE TO BUY IF YOU’RE IN THE EARLY STAGES
HOW TO PREPARE TO BUY IF YOU’RE IN THE EARLY STAGES
Thinking about buying a home but not sure where to begin? Even if you’re just starting to consider homeownership, it’s never too early to start preparing. Getting a head start can make the whole process smoother and less stressful.
Here’s a quick roadmap to help you lay the groundwork for your future home and turn your dream of becoming a homeowner into reality:
1.Check Your Credit
Pull your credit reports from each of the three credit reporting bureaus — make sure you check them for accuracy and dispute any errors, especially negative errors that decrease your score.
You can download a FREE copy of your reports at annualcreditreport.com
2. Determine a Budget
A helpful guideline is the 28/36 rule — no more than 28% of your monthly income should go to housing costs, and total monthly debt payments shouldn’t exceed 36% of your income.
Put together a spreadsheet outlining your current and future expenses, including utilities, maintenance, repairs, etc. From there, you can determine what you can afford to set aside for your housing expenses each month.
3. Know Your DTI
Your debt-to-income ratio (DTI) is the percentage of your monthly gross income (pre-tax) that goes toward paying your monthly reoccurring debts.
Add up your monthly bills (credit card payments, car loans, student loans, etc.) and divide the total by your gross monthly income (which is your income before taxes). The percentage is your DTI.
4. Find an Agent You Trust
Finding a real estate agent you trust (and enjoy working with) is one of your most important decisions. After all, they can make or break your home-buying experience!
Ask friends or family for referrals, and interview 2-3 realtors to find the best fit for you and your situation. You will spend a lot of time with the agent you choose, so it’s important to work with someone you like.
Have questions about the homebuying process? Send me a message, that’s why I’m here!