Top Seattle Mortgage Broker Shares Tips About Home Buying

Although purchasing a home is a major expense, there is a lot of control you have over how affordable it is.

Below are some simple recommendations that will help you move forward with buying your dream home without stretching your finances too much.

Buying Your Dream Home Tips

1. Know all the costs of homeownership. Homeowners should set their budget, review total income and determine up front how much they can afford for monthly mortgage and expenses. A good starting point is to have a full understanding of all of the costs that go into owning your own home. Only one of those is your mortgage. Others include homeowner’s insurance (if applicable), property taxes, utilities, eventual repairs and upgrades, and more. 

2. Run your own calculations, and/or make sure you understand the numbers your mortgage company discusses with you. Sometimes, homebuyers can find themselves confused by the calculations that mortgage companies may use in helping them determine how much home they can afford. Typically, this comes from assuming that your net income is being used in calculations when it is actually your gross income. Not all lenders factor in all the costs we talked about above either. So, ask the mortgage company how they are coming up with their numbers so that you understand their math. You should also do your own math and compare the result.

3. Get pre-qualified and pre-approved. Mortgage companies may allow you to get pre-qualified and/or pre-approved for a mortgage. By submitting some of your financial information, you can receive an estimate about how big a loan you might qualify for. That is what we call pre-qualification. Pre-approval goes a step further with a credit pull. You get an even better estimate this way, plus you find out what interest rate you might receive.

4. Resist the urge to buy a lot of stuff for your new home right away. As you begin to imagine yourself moving into your dream home, you might also start imagining furnishing and decorating it to your taste. You may want to make your vision a reality, and might be thinking about spending thousands of dollars doing it. But it is better to wait for these types of purchases. Get used to paying on your home, wait for your finances to fall into a predictable rhythm, and then think about buying furniture.

5. Put down the optimal amount. When you buy a home, you will need to decide how much to put down. If you make a larger down payment, your interest rate can be lower. But if you put down less, you keep your finances more flexible. So, there are pros and cons in terms of affordability either way. The trick is to choose an amount that gives you the right balance for your financial situation.

6. See if you can boost your credit score or lower your DTI ratio. Before applying for a home loan, it always makes sense to check whether it is possible to either reduce your debt-to-income (DTI) ratio or raise your credit score. Both can affect the interest rate you qualify for. The lower you can get that, the more affordable buying a home will be over the long term.

7. Try to minimize your closing costs. The closing costs on a mortgage usually range somewhere between 2% and 5%. But did you know that there are ways you can minimize them? You can take a look at our recommendations for keeping closing costs low.

8. Use a mortgage broker in Seattle, not a lender. One more tip for making homeownership affordable is to find the ideal mortgage. The easiest and fastest way to do that is to work with a mortgage broker instead of a direct lender. A broker can request quotes from a network of lenders throughout Washington to bring you the most competitive rates.

Blue Square Mortgage Can Help You Buy a Home in Washington State Affordably

Blue Square Mortgage is an independent mortgage broker serving Seattle and the rest of Washington. They can offer you personalized suggestions for purchasing a home affordably. To schedule your consultation now, please call (206) 352-6453.

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