Buying A Home: Factors to Consider

Whether it’s your first house or your fifth, buying a home is a major financial decision. 

“You want to make sure you’re prepared before you start the process,” says Joana Iliescu, Sales Associate at ERA Justin Realty. Here are a few things to consider to make the transaction as smooth as possible. 

Your Budget. How much can you afford to spend on a home? This will depend on your income, your debts, and your savings. It’s important to be realistic about your budget and not overextend yourself

Your Credit Score. Your credit score will be a major factor in determining your mortgage interest rate. “The higher your credit score, the lower your interest rate will be,” says Jennifer Darby Metzger, Broker/Owner of ERA Justin, “So make sure you pay your credit card bills on time. It all factors in.”

Your Down Payment. A down payment is the amount of money you put down on a home when you buy it. “The standard down payment is 20%, but you may be able to get a mortgage with a lower down payment if you have good credit or are a veteran,” says Iliescu. “Your real estate agent can help identify down payment programs and whether you qualify.”

Your Loan Type. There are two main types of mortgages: conventional and FHA loans. Conventional loans are typically offered by banks and other lenders, while FHA loans are offered by the Federal Housing Administration. FHA loans have lower down payment requirements than conventional loans, but they also have higher interest rates.

Your Closing Costs. “Closing costs are the fees you pay when you buy a home. They include things like the appraisal, title insurance, and attorney fees,” says Metzger. “It’s important to factor closing costs into your budget and whether they be rolled into your mortgage.”

Your Home Inspection. A home inspection is a thorough examination of a home’s condition. Have your potential house checked top to bottom by a professional home inspector before you buy so you can be aware of any potential problems.

Your Mortgage Pre-Approval. “Getting a mortgage pre-approval letter is a good way to show sellers you’re serious about buying a home,” says Iliescu. “It also gives you an idea of how much you can afford to spend.”

If you’re ready to buy in 2024, an experienced real estate agent will find a home, negotiate a good price, and close the deal. Joana Iliescu or any of the agents at ERA Justin Realty can help. Give us a call at (201) 939-7500.