Homeownership is the dream of many families and individuals in Florida. But, before it can become a reality, there are some details that need to be considered.
Which comes first, the home or the loan?
People new to buying real estate might think that the way to go about it is to find a home and then apply for financing. However, time and frustration will be saved by qualifying for a mortgage first and then choosing a selection of properties within that range.
This could provide homeowners with a wider choice of properties and neighborhoods while removing the anxiety over finding the means to buy them. It will also uncover any possible financial problems and give future buyers some time to improve their credit.
Better credit often means the ability to qualify for a larger loan at more favorable rates, and that translates to bargaining power. Keep in mind that loan officers also take into consideration your debt-to-income ratio, which means how much a prospect owes in relation to how much they earn.
The type of loan also determines payments. An adjustable-rate mortgage requires a smaller payment up front and lower monthly payments for a set time. However, the rates and payment can suddenly increase after the initial term.
In general, a fixed-rate mortgage offers fewer surprises.
Location, location, location
Once prospective buyers know how much home they can purchase, they can narrow their selections by priority. For example, young parents may want to settle in a specific school district. Others may be influenced by their work commute or access to community assets like shopping or entertainment.
After the best location for the circumstance is determined, specific homes can be chosen and considered according to things like:
- Number of bedrooms and bathrooms
- Lot size and location
- Amenities like fencing, garages, and appliances
- Maintenance requirements
Depending on the tolerance for home improvements and repairs, pricing may vary. For example, some people want a home that’s “move-in ready” while others don’t mind investing a little sweat equity. That decision could mean a difference in thousands of dollars toward the down payment and purchase price.