How To Buy A House With A Realtor

Buying a house is most likely the largest financial decision you will make in your entire life. Choosing and purchasing the right house can either set you up for a lifetime of financial success or put you into a hole of debt that can be almost impossible to climb out of.

Because of the complicated nature of buying a house, it’s best to enlist the help of a professional realtor who can make sure that you follow the right steps and make a purchase that will serve as a valuable investment and allow you to live a life you’ve always wanted.

In this article, we’ll cover the basic steps you should take before and during the process to make sure you, anyone you will be living with, and the real-estate company you choose can have a successful home-buying experience.

List Your Requirements

Before beginning the process of actually contacting a realtor, a smart idea is to sit down with everyone that will be living in the house and produce a list of wishes, requirements, and price ranges.

Making this list will allow you to narrow down a massive pool of potential housing options to a more realistic or appropriate selection. Some things to consider are:

• How many rooms will you need?
• What location or neighborhood do you want to live in?
• What are the school or entertainment options nearby your house?

Check Your Credit Score

The next step toward making your dream of being a homeowner come true is to get familiar with your credit score. This metric is a major way that banks and other mortgage lenders decide who they will give loans to and at what rates, so try to maintain it as high as possible throughout your life.

One of the best ways to build a solid credit score is to use a credit card for small purchases you can easily afford and then pay it off regularly at the end of every month, which will show that you have financial smarts and are a reliable person when it comes to paying off debt.

Schedule a Consultation with a Mortgage Broker

Setting up an in-person meeting with loan officers or another financial professional is the final step toward becoming a homeowner before actually contacting a real estate agent.

This will give you a realistic idea of what you can afford and what your long-term payments will look like, including interest and other applicable fees.

Although many experience anxiety about the expensive nature of the process, few things in life are more rewarding and have better investment benefits than buying a house.

Reporting from NBC recommends analyzing your income stream before this meeting to see if you fit into the “28/36” rule. While it may sound oddly specific, this is one of the most powerful metrics you can use to analyze your income and wealth strategies to see if you can afford a mortgage and what kind of house you can buy.

This rule states that the maximum of household expenses should not exceed 28% of your income, while household debt should not exceed 36%. If your expenses fall under these margins, you should be able to easily afford your mortgage and home payments.

Household Expenses

This includes anything in your mortgage, known as PITI: principal, interest, taxes, and insurance.

Contrary to what it may sound like, this does not include general household expenses such as food or clothing, but rather the financial expenses accrued through your mortgage and homeowner status. This should be less than 28% of your total household income.

Household Debt

This includes all other household debt besides the mortgage, such as student loan payments, credit cards, or other loans you may have.

To calculate this number, divide the amount of monthly debt you owe by your total monthly income stream. For example, if you have $800 of monthly debt payments and your total income is $4000, this calculation gives you a debt to income ratio of 0.2, or 20%.

This means you are safely under the 36% rule, and will most likely be able to afford a mortgage with no issues.

Contact Your Realtor

If you’ve completed all of these steps and find that your income and credit score will allow you to purchase a house, then you have completed the initial steps for purchasing a house. Housing is a constantly rising market that has provided millions of people with an incredible return on their investment.

The next step for you to take is to find the right realtor that can fight for you to get the best deals and will have access to the best listings.

The right realtor will be a cutthroat negotiator that can save you money and other costs. It’s worth it to meet with a few agents until you find one that you just click with and one that understands your wants, needs, and requirements for a house.

The realtor will help you make sure the house is properly inspected and you get a fair deal on your mortgage. When you find the right realtor, you will know – and they will allow you to find the house of your dreams.