5 steps to buying a home you can actually afford
5 steps to buying a home you can actually afford
Want to buy a home in Phoenix? Before you make a financial and emotional investment into the American dream of being a homeowner, remember these 5 steps to buying a home you can actually afford.
1.) Get your finances in order: Think you make enough money to buy a home in Phoenix? Personal finance experts say a good rule of thumb is to make sure make sure the total monthly payment doesn't consume more than 30 percent of your take-home pay. If you have consistent cash flow or savings that will substantiate this, then you’re already on the right path.
2.) Know the score: Before buying a home in Phoenix, you should become best friends with your credit report and start by checking your credit score. The higher your score, the better the interest rate on your mortgage will be. Good credit can mean significantly lower monthly payments, so if your score is not great, consider delaying this big purchase until you've built up your credit.
3.) Build your savings: Technically, you don't always have to put any money down when financing a home. However, being able to put 20 percent down is a plus. Anything lower and you’ll have to pay for private mortgage insurance (PMI) which can cost between 0.3 percent and 1.50 percent of your mortgage.
4.) Get mortgage pre-approval: Got your finances and credit score in order? Don’t buy until you determine how much you can afford to spend. Keeping in mind also that just because you qualify for an amount doesn’t mean you have to borrow the entire amount. Determine how much you can truly afford and stick to that limit.
5.) Budget for extra costs: Buying a home is about more than making the monthly mortgage payments. There are all sorts of extra costs associated with the home buying process. Be prepared for closing costs such as appraisal fees, attorney fees, title insurance, property transfer taxes, and inspection fees, which can add up to be about 5 percent of the mortgage amount. There’s also property taxes, insurance, and maintenance fees that can add hundreds of dollars per month to account for.
Please remember these 5 steps to buying a home you can actually afford so that you’ll have better success during the home buying process. Need help buying a Phoenix home you can afford? Want a qualified Phoenix property manager to manage your real estate investment? Please contact the Simply Property Management – Paielli Realty, Inc. team today!
Greg Paielli
Simply Property Management – Paielli Realty, Inc.
www.phoenixpropertymgmt.com
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