Have a great day! What does that mean to you? For many buying their first house is a great day. There is no better feeling than helping a first time home buyer. What an accomplishment, reaching the American dream. But how does one begin the buying journey?
The first step in home buying is meeting with a lending institution and determining how much you should be spending on a home. This can be determined in two ways. Many buyers want to know what price house they can afford to buy. They provide their income and their debt and assets to the lender and the lender tells them the price of the house they should be buying.
However, there is another determination that one can use in finding out the price of the house the buyer should buy. Theses buyers find that magic number by going backwards. These buyers determine how much they want to spend every month for their housing expense and then use that number to determine the price of the house they want to buy. In essence, just because someone can afford a property, they may not want the monthly payment. In this case, determining an acceptable monthly payment first may be the most prudent direction.
Either method works for figuring out the price of the house, but the process is incomplete without a credit report. Once the buyer’s credit is pulled and a score has been determined, the next step is to decide on the best type of loan for the buyer. If the credit score needs some upward adjustment, then a little more time might be needed before the house search begins, but if credit is good and the income to debt is acceptable, then it is show time…… Time to find the buyer’s dream home and another great day!