The news is out! Chattanooga is the city to watch for impressive growth in the coming years, so now is a great time to purchase a new home in the Tennessee Valley. Not only will you enjoy the pride of homeownership, real estate investments appreciate in value and offer great tax incentives.
For most people, a home is the biggest purchase in their lifetime. If you’re ready and willing to become a homeowner this year, the following tips can help you confidently purchase the best home for you.
Evaluate your finances
One of the first steps in homebuying is knowing your credit score. When you learn your credit score, it will help determine the interest rate and associated costs you pay on a mortgage loan.
In general, the higher your credit score, the lower the interest rate for which you’ll qualify.
You’ll also need to research how much house you can afford. Talking to a qualified lender can help you determine your price range.
Another key step when you are crunching the numbers is to set a down payment goal. The myth remains that you must put down 20% to move forward with your purchase, but there are options for homeowners available to put down less than 20% such as a Federal Housing Administration loan.
Assess your needs
If you’re firm in your decision to buy a home this year, it’s likely because you have a specific reason to purchase one. Maybe you need bigger space, or want to move to a school district that fits your family’s needs. While it might seem like an obvious line of reasoning, this will help you determine your needs and wants and create a “must haves” list.
When you put pen to paper and outline what you need in your new home, this will save you time when you’re ready to start looking. Your next home might not meet every single item on your priority list, so you must decide on where you can compromise and how you can stay within your budget.
Set a budget
Your home buying budget should not be based on what your maximum loan approval amount is. As the buyer, you’re the best judge of what you can afford.
A good rule of thumb is that your total monthly home expenses should not exceed more than one-third of your gross monthly income.
Home buying expenses are not limited to your down payment. Don’t forget to determine how much you need to cover loan fees and closing costs.
Sell your current home
If buying your home this year is contingent upon selling your home, you should be prepared in the event the timing doesn’t align perfectly. Another consideration is to make sure you have sufficient funds on hand if you’re unable to have concurrent home closings.
A Realtor can help you navigate the transitions. A buyer or seller market makes a difference timing the transaction and a real estate agent and the Home Builders Association of Greater Chattanooga can shed light on local market factors.
To find a real estate or mortgage professional in Chattanooga area, visit the online directory of the Home Builders Association of Greater Chattanooga at www.HBAGC.net.