Are you an impulse shopper?  Well… your home may be the biggest investment you will make in your life. The best way to buy a home is to be informed. Know the whole process and what to expect before you go shopping and visit Open Houses. You wouldn’t test drive a luxury car if you knew you couldn’t afford it. That’s just mean!

1. Know the Numbers. Before you even start thinking about searching for a home, you should analyze your financial situation. Know your own numbers and be comfortable with them… what is your income, current debt, monthly bills, expenses, emergency fund and savings. What’s left over and available for a Down Payment and Monthly Payment. Lenders are very aware of your debt to income ratio for your monthly earnings.

2. Set a Budget. Once you have a handle on your numbers, decide on a comfortable budget with a maximum amount to invest. This should be a number determined by you and a significant other, if applicable. It should not be determined by a pre-qualification or a calculation from an online calculator. The calculator will not factor in your ‘other expenses’ better known as quality of life. You should not be influenced by the lenders in making this decision. You need to go with what works for your account and finances. You have to keep in mind that you can consistently plan your way up to a bigger home over time.

3. Credit Score. Did you know that you can have access to your credit scores once a year for FREE! Once you have decided how much you can afford for your home, this is a good to know item. This gives you two advantages: a head start to fix any discrepancies and to see how you rate. If your score is low then you can take some time to bring your credit score up to avoid paying a high interest rate.

4. Cost of Ownership. Know how much your home will cost you. The mortgage payment is a piece of the monthly investment. A home owner must factor in insurance, property taxes, HVAC, maintenance, lawn care, electric and more. In today’s real estate market, sellers prefer a prospective buyer who is pre-approved to afford their home. Take your time and prepare yourself to buy a home, contact a REALTOR® and start searching for your home. The whole process will be much easier for you and less stress by knowing your numbers!