Buying your first custom home can be one of the most uplifting and tense time of your life. A custom home is not something you purchase on a whim; you can’t just waltz in and announce “I’ll take it!” However, with the right knowledge, you can shop for a custom home, apply for a mortgage and close the deal with assurance.
Getting ready to buy your first custom home can be discouraging to most. Credit scores, down payments, and mortgages are all on your mind. Where do you begin?
How much can you afford?
Before you tackle the local communities with a realtor, you need to have a realistic impression of your budget. In other words, make sure you are clear on how much home you can afford. Purchasing a custom home is one of the largest investments of your lifetime. You’re signing up for all the responsibilities that come with a custom home: mortgage, taxes, maintenance expenses…the list goes on. You can easily find an affordability calculator online to give you an idea of what you can afford.
Do you have your finances in order?
- Check your credit & pay off debt
- Save money
- Financial documentation
Do you know what your credit score is? A good credit score and low debt-to-income ratio is essential for a good rate on your mortgage. Paying off any old debt now will help improve your debt-to-income ratio. Start saving now to ease the financial burden of the down payment and any other unexpected expenses that may arise along the way. Lastly, you’ll need to verify your finances; i.e. pay-stubs, W2s, bank statements, etc.
Where do you get a mortgage?
You’re ready to obtain a mortgage. Where do you go? Who do you talk to? You should not just go into a bank. Request a loan officer and don’t accept the rate they give you without shopping around first. You can compare rates with any number of mortgage lenders. Using helpful sites such as LendingTree you can quickly get a few competing mortgage rates from different banks. Find one that has terms that work well for your situation and has reasonable closing fees.
Taking these steps are necessary to ensure you will find the right custom home that not only meets your lifestyle, but also fits your overall budget as well. After moving into your new custom home, you want to have the opportunity to kick back and finally feel home at last!
Thank you to Crystal Rowland for submitting this blog post.