Funneling a large portion of your money toward a home can be nerve-rattling, but Realtor.com offers some advice that can help you navigate the scarier parts of the mortgage and home-buying process.
Educate yourself on how to get a mortgage
Work extra-hard to understand the information needed when it comes time to buy a home. Take baby steps—like checking out a home-affordability calculator that crunches the numbers instantly on your income and debts and estimates what price house you can afford. Once you’ve done that, research the more nuanced idea of debt-to-income ratio (meaning how much you owe vs. how much you make) and make sure yours is no more than 36 percent. Any higher than that, and you may not be able to comfortably buy a house.
Learn from other home buyers
Friends or family members who’ve purchased a property can be extremely helpful by sharing their own experience and answering any questions you may have. If you have an who managed to buy a great home after bankruptcy or a friend who’s already on his or her third home, now’s a good time to ask them to share their secrets.
Understand the basics of a mortgage
Before you make open houses a hobby, study up on the basics of applying for a mortgage, making a payment and some of the costs associated with being a homeowner. Think private mortgage insurance and closing costs. It’s wise to become familiar with some of the key terms and major steps.
Talk to a mortgage lender
Before you ever set foot in a house, you should meet with a mortgage lender. This pro can walk you through the steps needed to prepare for the home-buying process. For example, a lender can tell you exactly how much money you’d be pre-approved for, so you can shop for houses you know you can afford.
Stay focused on the numbers that count
Seeing the amount of your entire mortgage on paper may make you panic and wonder how you’ll ever be able to pay all that back. Breathe, and choose a more accurate number to fixate on: your monthly payment. As long as you’re comfortable with that, the home-buying process will be easier to visualize. And trust that, in general, the money you put into that mortgage each month helps increase your home equity, which means that over time, it officially becomes your home.