S2 Ep4 - Preparing to Purchase - a podcast by Brian Cook And Kindra Cox

On Season 2, Episode 4 of The Brian and Kindra Show, they discussed how to prepare to purchase a home. 

When preparing to purchase your first home, you may find it helpful to set goals. These goals can help you from first getting pre-approved for a loan, all the way through moving in. 

Finances should be the first goal you set. You need a good credit score. Check your credit score via an online resource or through a lender. Credit is how well one manages and pays off debt. Credit cards are a big factor in credit. The best practice is to keep credit cards under 30% of their limit. Your credit score affects the interest rate of your loan. 

Down payments of a home can appear daunting. Most people think that you need 10-20% down payment. However, that’s not true. Most people can get a FHA home loan with 3.5% down payment.  There are a lot of different options with down payments. A lender can help you find the best loan type for your purchase. The trickiest part of purchasing a home are the closing costs. It costs money to borrow money. Closing costs, outside of your down payment, can be $6,000 to $8,000.   Closing costs cover approximately 15 months of insurance, your taxes, and other lender expenses. Down payments and closing costs are two seperate things!

Arguably, homes can/cannot be an investment. If you plan to be in a home long-term and pay off the mortgage, it is a financial investment. However, if you don’t plan to be somewhere long and like to hop around, you may not find it to be a financial investment. Regardless of how long you are in a home, owning a property is an investment for your family. The comfort of having a steady home is a comforting investment, even if it is not a financial one. 

To summarize, finances are the biggest part of preparing to purchase a home. Speak with a lender before you even start looking at houses.  Talk to a Realtor while you are planning and preparing.  Their expertise will guide you on the necessary steps to purchase. 

Brian and Kindra hope these tips have been helpful to you. As always, if you have any questions or need help, please feel free to reach out to your local real estate professional.

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