Follow These Important Steps and Prepare yourself to Buy a Single Family Home

Getting financially ready to buy a home is a daunting task. There are several things you need to consider before you make this big decision. For example, do you have a steady income? Is your credit history good enough? What about your debt? How much debt do you have and how can you pay off those debts for them not to hinder your ability to buy a house in the future? Today, Properties in Silicon Valley has the answers.

Do Your Homework

The first thing you need to do is familiarize yourself with your local housing market, since prices can vary greatly depending on location. For instance, the median sale price in Campbell is nearly $1.7 million right now. Your next step should be meeting with a qualified real estate agent. Buying a property is often complex and takes time, with many different players involved in the process, from lawyers to bankers- mortgage brokers to title companies. You will save a lot of time if you hire someone who has the experience and knows what all these steps are about rather than trying to go it alone or reading about them all online.

Establish Credit

Accumulating credit and good credit history is the foundation for being able to buy a house. Factors such as your income, your job, the number of assets you have, and your debt are all considered in determining whether you will be approved for a mortgage. You are eligible to get a free credit report annually.

One of the strongest indicators of creditworthiness is your payment history. Therefore, one way to build your credit is by paying outstanding balances on time and keeping up with payments on all accounts. The other way to build good or excellent credit is by doing things like opening new lines of credit with healthy limits or making small purchases on those lines of credit (like paying for lunch) which will help establish a long-term positive payment history.

Create a Budget

Creating a budget is essential because it helps you figure out how much home you can afford and how much of your income will go towards living expenses. A major factor that goes into creating a budget is determining what the monthly mortgage payment will be. There are mortgage calculators you can use to determine that. Then create a budget for the house you are buying using that future-based budget. This type of budgeting should take into account your anticipated income and savings.

Find Out How Much You Can Borrow

There are a number of steps that you need to take before you buy a house. The first one is to get pre-approved, not pre-qualified, for a loan. This will give you the maximum amount that you can borrow from a lender and the monthly payments. Pre-qualified is different from being pre-approved for a mortgage, which means that a bank or lender has investigated your credit history and determined that you would be a suitable candidate for a mortgage.

Considerations If You are a Business Owner

If you are a business owner who is considering buying a home, you should seek advice from a qualified agent on what home would be best for you and your business. You should also consult with an attorney or accountant about the tax implications of owning a home. During the home search, find out what zoning restrictions there are in your desired area.

Consider, too, forming your business as an LLC. Besides being easy to do yourself (no attorney necessary) there is less paperwork, better tax advantages, and limited financial liability. Rules vary from state to state, so check the rules where you are. If you want to start an LLC in California, for instance, just follow these few simple steps.

The steps you take now to get ready for your home buying adventure may seem overwhelming, but going through them thoroughly will save you time, money, and maybe disappointment down the road. It will all be worth it when you are finally in the home of your dreams.

If you’re looking for a multifamily or single family real estate agent in Silicon Valley, and you want to buy or sell a single family home, duplex, triplex or fourplex, Properties in Silicon Valley is here to help. Call (408) 210-2400.