Keys to Homeownership: Affording a Home
Ask any real estate professional what the first step in the home buying process should be, and they will almost always say “get pre-approved.” Many first-time buyers aren’t quite sure how much they can afford to pay for a home. Getting pre-approved by a mortgage lender can help prospective buyers determine their budget and focus their search on homes they can afford. Lesley Stoneham of Coldwell Banker Cornerstone Realty affirms the importance of this crucial step and shares three ways you may benefit by getting pre-approved for a loan.
Determine How Much Money You Can Borrow
Avoid setting yourself up for disappointment by refraining from looking at houses until you know how much you’ll be able to borrow. This is one of the main reasons real estate agents encourage buyers to start the pre-approval process before even going to look at houses.
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Budget for Monthly Mortgage Payments
When you buy a home, you’re likely committing to a monthly payment. In addition to your mortgage and interest, the payment may also include property taxes and mortgage insurance. To determine whether you can afford to buy a home, you will want to see how your monthly payment fits into your overall budget.
Calculate the Down Payment
Knowing how much money you’ll need for a down payment can be extremely helpful information. If you’ve been saving up, getting pre-approved for a loan will help you figure out what percentage you can afford to put down and how large of a loan you’ll need.
Buying a home doesn’t have to be scary or stressful. Getting pre-approved can take some of the guesswork out of the process and give you the confidence to pursue the next steps in the homebuying process.