Many Delaware residents are planning to buy their first home this year. However, as they approach this exciting milestone, there are several things that they should keep in mind to make sure things go as smoothly as possible.
The first thing people should do is calculate the real estate price they can comfortably afford. According to financial experts, housing costs should not exceed 30 percent of a buyer’s income. In fact, some mortgage lenders recommend that loans do not exceed 28 percent of a buyer’s income. Once a price range is established, people should work on saving for a down payment of 20 percent and an emergency fund that will cover at least three months of emergency repairs and other unexpected expenses. That down payment cushion will help to mitigate the chances of the buyer being upside down if home values drop.
After finances are in order, it’s time to get approved for a home loan. This will help buyers know how much money they can count on from a bank. It will also help them be taken more seriously by real estate agents and sellers. When it’s finally time to go house hunting, a prospective homeowner may find it advantageous to seek the advice of a buyer’s agent who is familiar with the local real estate market.
The purchase of a home is a major commitment. Many first-time buyers choose to work with a residential real estate attorney to ensure that they avoid bad deals and other complications that could delay a closing. Attorneys can also review prospective mortgage terms.
Source: The Motley Fool, “5 Steps to Take Before Shopping for Your First Home“, Christy Bieber, Aug. 13, 2017