Judie Docs, Executive Officer, North Coast Building Industry Association (NCBIA), CSP, MCSP, CGP, CMP, MIRM

Congratulations. You have finally decided to buy a home to call your own. As one of the biggest purchases you will likely make in your lifetime, navigating the steps to finance your home can be a daunting experience. Like most big-ticket consumer purchases, knowledge is power. If you take the time to do your research and shop carefully, you will have a successful home-buying experience.

When it comes to home buying, you need to decide how much to spend, and which type of mortgage will work best for you. Before you step into a sales office or model home, here are some steps to ensure you are in the best possible financial situation to purchase a new home.

Determine Your Monthly Payment. The first step is to figure out what you can comfortably pay every month. Make a list of all your monthly expenses including loan payments, utilities, insurance, credit cards and do not forget food, clothing, and entertainment expenditures. Your estimated monthly payment should not only include your mortgage but also other factors such as property taxes, home insurance, loan terms (how long you would like to pay off your mortgage) and homeowners association fees (if applicable). To help you figure out the total cost, there are many mortgage calculators available online to help you determine your monthly payment based on current interest rates and down payment amounts.

Pay Down Your Debts. As you begin preparing your finances for the purchase of a new home, you might see the term “debt-to-income ratio” (DTI). Your DTI compares how much you owe each month to how much you earn, which is expressed as a percentage. This percentage helps lenders gauge how well you manage your monthly obligations and if you can afford to repay a loan. In general, the lower your DTI, the more likely you are to qualify for a mortgage.

Access First-Time Home Buyer Resources. Attend a first-time home buying seminar or talk to a credit counselor who does not work for a lender. The U.S. Department of Housing and Urban Development (HUD) offers free housing counseling and seminars. You visit hud.gov/housingcounseling or call HUD’s interactive voice system at: (800) 569-4287 for more information.

Connect with a Lender. After you have completed all your research, visit a lender, and learn more about what loans would be available to you. Then, get pre-approved. This will tell you how much money the lender is willing to loan you, and you will know in which price range you should be shopping. In a hot housing market, pre-approval enables you to quickly make an offer when you find a home and it is attractive to sellers who are considering multiple offers.

For information on the benefits of homeownership, feel free to contact the NCBIA.  We are your local not-for-profit trade association representing member companies involved in all aspects of home building, remodeling, and other aspects of services available to help you in the future as well as more information on the above topic.  So, you can see it is for your protection that you use a NCBIA member. If you are unsure that your contractor is a member of the NCBIA or you are looking for a list of NCBIA members, you can visit our website at www.ncbia.com or call 440-934-1090.  We also have a job posting board (under the industry tab).

Visit our 24/7 Virtual Parade of Homes!!!  Allows you to look at some of our builders’ new homes and communities on your mobile device or computer at your leisure (including our remodelers) We know time is our greatest asset and via our NCBIA Virtual Parade of Homes, we save you time looking for a new home or a community that fits your lifestyle. The Virtual Parade of Homes is open online 24/7. Many of the homes featured in our Virtual Parade host regular open house hours for those consumers who are looking to tour the actual homes.  You can click through to builder websites to see what they have to offer.

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