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Steps for Buying a Home
Take these Steps for Buying a House
Whether it’s your first home, or you’re considering buying a secondary property, buying a home is a serious endeavor. Start by defining your goals. Consider where you want to live, the features you’re looking for, what you can afford and a realistic date for having the money you’ll need. Whenever you’re ready to buy a home, we’re here to help. Learn more about our mortgage lending options.
Determine What Mortgage You Can Afford
The actual amount you’ll spend to buy a home depends on the part of the country you live in and the type of home you want. While the dollar amount will vary, certain guidelines apply wherever you buy.
You will likely need to get a mortgage – a long-term loan you use to buy a home.
What a mortgage costs depends on three factors: the principal, or amount you borrow, the finance charge you pay for using the money and the term, or length of time the mortgage lasts. You should also expect to pay an up-front interest charge to your lender, of one or more points. A point is usually 1% of the mortgage amount. You might be wondering “can I afford a mortgage?” or “what mortgage can I afford?”. Our mortgage calculator is here to help.
Finding the Right Type of Mortgage
When you apply for a mortgage, you will have to qualify to be able to borrow. Typically, lenders require you to spend no more than 28% of your monthly income to repay the combined total of your mortgage loan, property taxes, and homeowners’ insurance. For example, if your gross pay is $54,000 a year, or $4,500 a month, your housing expenses could be up to $1,260.
Most lenders also consider your other financial responsibilities, including car payments, personal loans, college loans, and other debts. They don’t want these expenses—plus your housing costs—to be more than about 36% of your monthly income. In short, they want to be sure you’ll be able to pay your mortgage before they let you borrow.
Saving for Closing Costs and a Down Payment
In additional to affording your mortgage payment each month, tt’s likely that you will need cash for a down payment and closing costs. These are costs you’ll also have to budget for when buying a home.
Traditionally the down payment has been between 10% and 20% of the sale price, though there are some government sponsored programs that let you put a smaller amount down. The less cash you put down, the larger your mortgage payments will be each month.
Ready to start saving for home ownership? WesBanco offers personal savings accounts that can help you save for a down payment and other costs.
Qualifying for a Mortgage
Before you start looking for a home, get pre-qualified. This way, you’ll know what you can afford and can shop within your budget. Plus, this will make you be a serious buyer to a seller. Discuss loan options with your WesBanco lender and start thinking about how you plan to finance your home.
When you apply for a mortgage, you will have to qualify to be able to borrow. Typically, lenders require you to spend no more than 28% of your monthly income to repay the combined total of your mortgage loan, property taxes and homeowners’ insurance. For example, if your gross pay is $54,000 a year, or $4,500 a month, your housing expenses could be up to $1,260.
Most lenders also consider your other financial responsibilities, including car payments, personal loans, college loans and other debts. They don’t want these expenses—plus your housing costs—to be more than about 36% of your monthly income. In short, they want to be sure you’ll be able to pay your mortgage before they let you borrow.
Finding a Real Estate Agent
A real estate agent can provide valuable assistance in buying a home. An agent knows what’s available in a particular neighborhood, what the price trends are and how current asking prices relate to actual sales prices.
You can look for an agent the same way you look for a financial planner or other professional. Ask your friends and family for recommendations, check out your local resources and various real estate websites and interview several people before you decide on the person to work with. It could turn out to be an extended relationship, and you want it to be a productive one.
Traditional real estate agents and the real estate firms that list homes for sale are paid by the seller and represent the seller’s interest. That doesn’t mean that, as a buyer, you can’t establish a good relationship with sellers’ agents or use them to find a home at a price you can afford. Some buyers prefer to hire buyers’ agents to represent their interests and negotiate the sale price and contract terms.
Ready to Get Started?
Once you are ready to take the plunge, we are here to help. WesBanco’s Mortgage Specialists are experienced, knowledgeable professionals who are available to provide information to individuals or families wanting to purchase, refinance or renovate a home. Let us get you on the right path to owning a home of your own. Click the button below to find a lender in your area to speak with.
Content is for informational purposes only and is not intended to provide legal or financial advice. The views and opinions expressed do not necessarily represent the views and opinions of WesBanco.
While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.
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