Buyers Check list
Tovar The Realtor
Tovar Residential
Welcome
Congratulations on beginning the journey to buying your first home! Homeownership is an exciting step towards the financial and personal life of your dreams, but it does take intentional planning and preparation. By completing this checklist, you will be well on your way to getting the keys to your first home. Before you know it, you’ll be taking selfies in front of your new home and picking paint colors!
I’m honored to be your guide as you begin.
Tovar The Realtor
Checklist
HOMEBUYING
CHECK YOUR CREDIT REPORT
Go to annualcreditreport.com to get a free copy of your full credit report. This is slightly different from your credit score because it shows your full credit history, which is what lenders look at. Fix inaccuracies as soon as possible.
COMPLETE YOUR
HOMEBUYING LIST
Make a list of the top 3 most important things in a home, 3 things that would make it better, 3 deal breakers, and top 3 neighborhoods. If you’re purchasing with a partner, create separate lists on your own and then work together to make a master list of what is important to both of you.
CHECK YOUR CREDIT SCORE
Use a free site like Credit Karma or your bank to look at your credit score. Your score will likely be different with a mortgage lender, so assume it will be 20-30 points lower. If credit Karma shows you 740, assume your score will be 720 with a mortgage lender. Continue doing everything you can to improve your credit score.
DETERMINE YOUR MONTHLY BUDGET
Decide on the highest monthly mortgage payment you are comfortable with. Take into consideration your other obligations like car payments and student loans, along with lifestyle expenses like eating out and vacations.
If this amount is more than you are currently paying in rent, begin making practice mortgage payments by setting aside extra money every month when paying your rent. This will help ensure you can sustain the higher payments on your lifestyle.
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Checklist
HOMEBUYING
CHECK YOUR DEBT-TO-INCOME RATIO
Lenders use this ratio to determine how much house you can afford. You can easily calculate yours by using this guide.
DETERMINE HOW MUCH MONEY YOU CAN SPEND UPFRONT
Review your checking and savings account and decide how much of that you are comfortable spending on the home - between down payment and closing costs. If you are planning on using investment account funds (ie. 401k, IRA), find out your maximum withdrawals and the penalties or repayment. If you are receiving a gift, find out the exact amount you will be receiving.
CREATE A SAVINGS PLAN
Most homebuying programs require a minimum of 3-3.5% down, plus closing costs (click here for averages by state). While you may be able to put down less, it’s good to be in the habit of saving every month - even after you move in. Open a free High Yield Savings account so you can earn additional money from interest.
CONNECT WITH A FAME AGENT
Connect with a First-time buyer friendly, Available, Market knowledgeable, and Experienced agent for
free with no obligation - just click here to schedule your FREE 15 minute consultation .
REVIEW HOMEBUYING PROGRAMS IN YOUR STATE
Click on your state using this link to find out what programs may be available to you.
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KEY
Words to know
- Closing costs
Fees associated with the purchase of a home that are due at the end of the sales transaction. Fees may include the appraisal, the home inspection, a title search, a pest inspection and more. Buyers should budget for an amount that is 2% to 5% of the home’s purchase price. Read more about closing costs.
- Contingencies
Conditions written into a home purchase contract that protect the buyer should issues arise with financing, the home inspection, or something out. Read about nine types of real estate contingencies for buyers.
- Debt-to-income ratio (DTI)
A ratio that compares a home buyer’s expenses to gross income. Try our debt-to-income calculator to learn more.
- Earnest money
A security deposit made by the buyer to assure the seller of his or her intent to purchase.
- Private mortgage insurance (PMI)
A fee charged to borrowers who make a down payment that is less than 20% of the home’s value. The fee, 0.3% to 1.5% of the yearly loan amount, can be canceled in certain circumstances when the borrower reaches 20% equity. Read more about PMI.
- The Option Period
An Option Period is established in a real estate contract to provide a specified number of days for the buyer to terminate the contract and be refunded their earnest money.
It gives the buyer time to complete inspections, get bids for repairs and come to terms with sellers on any requested repairs.
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