What are the things to do if you want to buy a house this year


So you’re thinking of buying a house
this year but you don’t know where to start. The answer is to start with the small
steps you can tackle right now. This video will give you 3, yes 3
things you can do this very week that will get you on track to buy a home by
the end of the year! If you want to buy a house this year or even next year,
especially if this is your first home you’re probably asking yourself, where do
I start? You don’t have to worry about
deciphering all the mortgage papers and a huge downpayment not right now. Here
are 3 steps you can take right now to ensure your success. First, check your
credit. The credit is key to the home buying ability. The higher the credit
score, the lower the mortgage rate and the bigger the budget. Here’s how your credit
affects your mortgage. They go in ranges. Depending on the range depends upon the
mortgage rates you’re going to get. Check your credit at least 6 months in
advance. It gives you time to flag any errors on your credit report and help
improve your score if it need be. So how do you check your credit report? By law
you’re entitled to a free annual credit report from all 3 major credit
bureaus once a year. If you haven’t used yours recently go over to
annualcreditreport.com and pull that. By the way, this is the only government
mandated site that gives you a free no strings attached credit report. Getting
your credit report takes just a few minutes. Once you have it in your hand
there’s a few things you’ll want to look for. First, you want to look for any
errors or suspicious activity is there. Anything wrong with your name, address?
Any accounts of your balances? Are there cards or credit lines you don’t
recognize? Late payments that you paid on time. Report these errors to the issuing
bureau ASAP! It could be a sign you’ve been a victim of identity theft. And they
could be hurting your credit score too. Over due accounts, if there are any
accounts marked late overdue or in collections? Take steps to settle those
as quick as possible. Payment history plays a huge
role in your overall credit score. So addressing these issues fast is critical!
Missing accounts are there any accounts, credit cards, lines of credits, that
aren’t showing up? If you’re current on your payments with them, then contact the
credit bureau and make sure that they start to show up on your credit report. Even your rent. If you’ve been paying your rent on time have it be on your credit
report. It could give your credit a boost especially, if you’ve had that line for
quite a while. Keep in mind it often takes 6 months or more to fix a credit
issue. So if you see something wrong, report it right away. Let the bureau know,
and be ready to have evidence to back up your claim. Two, determine what you can afford! After checking your credit, you may be
wondering can I even afford to buy a house? Getting an answer to that question,
is the next step. Before going any further, you’ll need to figure out what
you can comfortably afford. Given your income, existing debt and any expenses
you have. For many people the monthly mortgage payment around their current
rent price is ideal. To get a good pulse on what you can afford
check a mortgage calculator and click on the By-Income tab which I’ve linked down
in the description below. This lets you enter your income, current debt, location
and other details to determine what home price and monthly payment you are most
comfortably affording. Once you’ve determined a price point,
compare that to home prices in your desired area. Check realtor.com’s market
trends tool, which I’ve also linked down in the description, to get a feel of the
price trends in your area. There’s even a heat map that lets you separate the
higher cost markets from the lower cost ones. So you can hone in on the
communities that best suit your budget. if it’s looking like the price point
won’t work for the location you’re seeking, you might tighten your belt,
a little bit, stash away some extra cash or maybe you might want to look at
alternatives. For instance, maybe you buy in a lower cost market outside of your ideal area for your first home. Or you could think
about purchasing a smaller property like a townhouse or a condo instead of that
single-family home. If your budget already measures up to the home prices
in your desired area, then you’re on track and start looking at financing
options. Third, is to make a savings plan for your down payment. The down payment
is probably your biggest concern if you hope to buy a house this year and for
good reason. Your downpayment impacts not only your
home buying options, but also how affordable the house is the long term. Here’s a simple fact, you don’t need 20% down to buy a house. How much do I
need to save for a down payment? You just need to know how much house you can
afford, so refer to that mortgage calculator once again. Let’s look at an
example scenario. Say you make $75,000 a year and you have a few thousand dollars in savings already. By the way, getting a tax refund?
That money can jump-start your savings! and you’re looking to buy a home, maybe
in the $300,000 range sometime in the next year or two. Here’s what your
savings plan will look like: 5% down you’ll need to save $1,500 a month maybe
for the next 15 months and then you’ll be in a home by the end of the year. If
you want 10% down you’ll need to same about $2,000 for the next 15
months. However, an FHA loan only requires 3.5% down you’ll need to say $875 a month the next 12 months. Down payments don’t just come
from savings though. With most mortgage loans, you can use downpayment gifts to
cover some or all of the costs. There are also downpayment assistance
programs that can help with first-time home buyer. A side note, not all mortgages
require down payments! These aren’t the only steps you need to buy a house this
year but they will put you on track towards success! So if you start planning
now, increase your savings, and keep your finances in check, a new home could very
well be in your future soon. I’m Kimberly DiPrima, a Realtor here in the Fox Valley
area of Chicago’s Western burbs with Option Realy Group and if you’re
interested in all things real estate in Fox Valley area, click the subscribe
button below. Thank you for watching. See you next week and you have a great
day!

10 Comments

  • Great information Kimberly!

  • nice video !

  • Good ideas for a buyer to know about buying a house.

  • Super awesome tips for future home buyers!

  • Great counsel on where and when to start!

  • Great Info, for First timers– Credit is the Key to everything—nice tips on credit reports .

  • Great info for first time home buyers! Very useful info- credit, budget & savings

  • These are great advice for any buyer! Thanks Kimberly!

  • These are awesome info! Thank you for sharing!

  • Debt to income is huge too! Good tips!

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