If you are just getting started wrapping your head around buying a home you may be at a loss for what to do first.  Here is my suggestion.

If you are 6 months to a year out from buying a home, now is not the time to run off to the mortgage broker and pe-qualify for a loan.  With the mortgage landscape as unclear as it is, talking to the bank now will do you almost no good by the time you are ready to buy.  Instead, do this little exercise.

1.   Sit down with all of the decision makers in the family and come up with an idea of what you might like to pay for housing, when you buy a home. 

Hint: Be realistic.  If you are currently paying $1,200 in rent, assume that you will not be able to pay $5,000 for a mortgage when the time comes. 

2.  Now that you have a guess as to what you hope to pay, test the amount to make sure it is reasonable.  Set aside the difference between what you are currently paying for housing and what you hope to pay when you buy.  Set it aside every month in a savings account as if you were making the payment already.   In a few months you will know if that number is reasonable, too high or too low. 

3. Adjust up or down.  If you are feeling the financial pinch, lower the amount.  If it feels too light, try putting a little more aside.

4. Don’t touch that money until closing.   If you do this exercise, you will have begun saving for closing costs as well as all the little miscilaneous items you may want to purchase when you buy your home.  It will make for a nice little sum six months to a year from now.

5. When the time comes to talk to a bank, you can tell them exactly how much you are able to spend each month and even have some money set aside for closing costs. 

The perfect plan.

Give me a call if you need help:

Rob Graham, Accredited Buyers Representative
Windermere Real Estate
206-321-6349
robgraham@windermere.com

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