Buying your first home involves an amazing array of emotions – excitement, happiness, frustration, elation, and sometimes sheer panic!
Buying a new home is a big step and the realization of one of your top goals. In starting a whole new chapter of your life, you will want to minimize the risk and disappointment that could occur if you make some missteps along the way.
Check out these 5 things to do before buying your first home in Boston in order to make this process an exciting adventure for you and your family.
1. Determine What You Can Actually Afford
The first thing you should do before buying your first home in Boston is to sit down, put pencil to paper, and figure out how much home you can actually afford by running the numbers. One of the biggest and most common mistakes first-time buyers make is buying more house than they can afford.
Most mortgage specialists recommend that you should spend no more than about 30% of your take-home pay on housing. Keep in mind that this 30% encompasses more than just the negotiated price of the home. It should include all related costs, like mortgage interest, taxes, insurance, maintenance, and any renovations you might want to make.
Another good tactic in determining affordability is to use the same guideline mortgage lenders use to assess your borrowing capacity: the 28/36 rule. This rule states that you should spend no more than 28% of your gross monthly income on housing costs, and no more than 36% on total debt, which includes housing and other debt like student loans or car loans.
If you’re not sure about all the “hidden costs” involved in buying your first home in Boston – what they are and how much they are – talk to us at NextHome Titletown Real Estate. Your Boston agent can help you out with such things as property taxes and maintenance costs. To find out more about this, call (617) 657-9811.
2. Work on Your Credit Score
After determining your budget, your next step is to get your credit in as good a shape as possible. Getting a mortgage requires a fairly decent credit score, so check your credits reports now – keeping a sharp eye out for any errors.
If your credit score isn’t strong, there are a few things you can do to improve it (at least a few points) pretty quickly – pay down credit card balances and stop using them for two months before you apply for a mortgage, and avoid applying for credit (for example, a new credit card or car loan) until after you’ve closed on your new home.
Keep in mind that making significant improvements in your credit score can take six months or more. So one of the best things you can do before buying your first home in Boston is to start working on your credit score as soon as possible – now!
3. Save for Down Payment and Other Costs
The down payment – typically 3.5% to 20% of the purchase price, depending upon the loan program – is often the highest hurdle for first-time homebuyers. But keep in mind that there are other substantial upfront costs. First-time buyers often underestimate how much cash they need to have on hand to cover all these expenses, such as closing costs and loan fees.
So start saving now. And make sure that the money you need for the down payment is not sitting in a risky and volatile investment vehicle that can dramatically decrease quckly and suddenly (such as the stock market). Wherever you invest the money you’re saving, it needs to be available when you need it. The greatest risk is not having your money available when you’re ready to buy a house.”
4. Get Pre-Approved for Financing
Getting pre-approved is a very smart thing to do before buying your first home in Boston. You will know exactly how much you can borrow and, as a result, can narrow house hunting to homes within your price range. You will also be perceived as a serious buyer and will have more negotiating leverage.
Pre-approval analyzes your creditworthiness, tells you how much you can borrow from your lender and, ultimately, can make the difference between winning a bid or not. In hot markets, mortgage pre-approval is almost required for a seller to take your offer seriously. That’s because it spells out exactly how much a lender has agreed to loan you, thus assuring the seller that you’re both willing and able.
5. Check Out the Neighborhood
One of the important things buyers often fail to do before buying their first home in Boston is checking out the neighborhood. Don’t fall so in love with a house that you buy in a neighborhood that isn’t a good fit.
Spend some time in the neighborhood – both at night and during the day – to find out if it’s right for you. Drive the morning and evening commutes through town. The neighborhood could have a completely different feel at different times throughout the day. Are there really big street lights that create light pollution and a weird feel for the house in the neighborhood? Is there suspicious activity in the evening that you might run across that you don’t see during the day? It doesn’t hurt to spend 48 to 72 hours there before you actually commit to buying.
Finally, there’s one more thing to do before buying your first home in Boston. And that is to consult with us at NextHome Titletown Real Estate! Your Boston agent will know the local market well and can help you make the right purchasing decision. Find out today how our experienced agents can assist you in buying that first home. Just send us a message or give us a call at (617) 657-9811.
Boston and Beyond – Just Hit the Market!
The property listing data and information set forth herein were provided to MLS Property Information Network, Inc. from third party sources, including sellers, lessors and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information are for the personal, non commercial use of consumers having a good faith interest in purchasing or leasing listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing or leasing. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information set forth herein.