Whether you’re buying your first home or are a seasoned homeowner, the process of buying a home can be a bit overwhelming. Here are a few tips to help:
Educate yourself
Buying a home is a life-changing event. Many nonprofit housing organizations offer free or low-cost homeownership courses that teach consumers about budgeting for homeownership, how to search for the right mortgage, fair housing laws, closing costs, home insurance costs and more.
Check your credit
Obtain a copy of your credit report and make sure that it correctly reflects your credit history. If you find a mistake, notify the credit bureau immediately. Generally, they must investigate and resolve the disputed information within 30 days of receiving your notice. If the negative information on your report is correct, don’t assume that it will limit your loan choices. Explain the situation to your lender and show them why there are good reasons for trusting you to repay the loan.
Save for a down payment
You’ll need money for your down payment, closing costs, moving and other expenses. While many loan programs require you to have 3-5 percent of your own funds for the down payment, there are some programs available that will accept gifted funds, grants and other forms of down payment assistance.
Get preapproved for your loan
Before beginning your home search, speak with at least one lender to get pre-qualified for a loan. This is an unofficial estimate of the home you can afford and how much you can borrow. During your home search, take the time to research and compare several lenders and different mortgage programs so that you are ready to start the loan process when you find your dream house. Compare interest rates and terms, application fees, closing costs, down payment options and other required items like appraisal costs and title insurance requirements.
Be realistic
Your dream house could quickly turn into a nightmare if you spend more than you can really afford. Pick a house with a mortgage payment that will leave room for your other expenses, annual maintenance and emergencies. A general rule of thumb is that a household should spend no more than 28 percent of its income on housing expenses and no more than 36 percent of its income on all debt obligations (including the mortgage payment).
Consult with a NC Workforce Housing Specialist
Most buyers work with a REALTOR® when looking for a home that meets their needs. A REALTOR® typically is the one who presents your offer to purchase a home to the seller and assists you in completing the transaction. North Carolina Workforce Housing Specialists (WHS) are REALTORS® who have taken extra steps to learn about the federal, state and local housing programs specifically designed to help buyers that earn less than the area median income. They also work within the community to increase housing affordability for all citizens.
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