Everything you need to know about buying your dream home
Buying a house is a huge decision. It’s pretty high up there on the life achievement scale, just below starting a career, getting married and having children. Being a homeowner is part of the American dream, after all.
Before buying a home—especially a custom home—you must be prepared. This guide will assist you with that.
Balance Your Budget
Hopefully you’ve already saved up a good amount of money because the first rule of home-buying is to make sure you can afford it. And we don’t just mean the mortgage—you should budget everything out to make sure you can also afford electricity, heat and air, property taxes, homeowner’s insurance, and any other costs that might be unique to your particular situation. If you can barely afford a monthly mortgage payment, you may want to consider spending a little more time saving up. That, or settle for a less expensive home.
If you’re building a custom home, work out all of the details with your builder. This is important to do regardless of the size of the project. Don’t be afraid to ask plenty of questions. You don’t want any unexpected problems to pop up in the middle of construction. Not every custom home builder is going to be right for you, so make sure you and your choice of builder mesh well.
Clean Up Your Credit
Before you even think about buying a house, check your credit score. If you have too many late payments or continually owe your credit card company money, you might be in trouble. These things contribute to a low credit score, making it difficult to get approved for a mortgage. And even if you can get a loan, you’ll probably be slapped with bad interest rates.
What can you do to scrub your credit score and make it shiny and new? It may sound obvious, but pay off all your debt, starting with your credit cards. You’ll need to maintain a debtless life for at least a year before your credit score begins to rise, but it’s more than worth it.
Manage Your Mortgage
Once you’ve decided how much room there is in your budget, you’ll want to make decisions about mortgage payments and rates. Although you can purchase a house with only a small down payment, you’ll ideally want to pay a higher one—20% is recommended—to avoid getting hit with private mortgage insurance.
Also take the length of your loan into account. Homeowners typically opt for a 15- or 30-year mortgage, but you’re free to choose somewhere within that range as well. If money isn’t an issue, you’ll want to go for a 15-year loan. Though your monthly payments will be substantially higher, you’ll have a lower interest rate and will pay your mortgage off sooner.
Have any questions about buying your first home?
Finding a home builder can be a daunting task, but it’s important to be confident in your decision. At Charlie Nathan Builders, we want to partner with you to build a home that exudes elegance, quality of design, and craftsmanship. We have nearly 30 years of experience in home remodeling and custom home design in Seattle. Contact us via our online form or call us at 206-546-4949 today to discuss your needs and learn more about our services.