Steps to buying a house in Massachusetts

Steps to buying a house in Massachusetts

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Couple Calculating Budget to buy a houseNow that spring is in the air and the home buying season is kicking off it’s time to review your steps to buying a house in Massachusetts.   It is easy to walk into a home and fall in love, it is harder to think about your future home as a financial transaction. Compared to the middle of the country home values in Massachusetts are much higher. That does not mean it is impossible just than you must have a plan. Most articles on steps to buying a house will focus on the events from selection to occupancy.   In this article I will point you back to previous articles that together will

  • help you prepare to successfully get pre-approved and approved for a mortgage
  • accelerate your savings for the down payment and closing costs
  • think about what characteristics your needs
  • find programs that will get you into a home sooner rather than later

A great starting point is my article “For MA Affordable House Hunters, a 5-Step Approach”. In this article I explained the 5 steps to buying a house you can afford that have worked for thousands of home buyers before you.

  1. Define Affordable House in dollars
  2. Set space requirements
  3. Balance travel time against housing costs
  4. Include properties that need some TLC
  5. Investigate home buying programs

What affordable house in dollars really means is what you feel comfortable spending each month vs what a lender will let you borrow. Often lenders will approve a higher loan amount that buyers feel comfortable paying each month. Learn your comfort level and stay within it.

Next in the steps to buying a house is knowing how to prepare to meet with a lender and get pre-approved before you begin your search.   Getting pre-approved is an important step to buying a house, it impresses upon the realtor and seller that you are a serious buyer. It will put your offer, even if lower, ahead of offers from those not pre-approved. I have a few articles that will help you understand how the lender will look at you: “Demystifying the FICO Formula and setting the stage for success”. Your assets, current ability to generate cash and FICO score will all play part in determining whether or not you will qualify for a mortgage . There really isn’t a totally mysterious secret formula involved in coming up with your FICO score. Since the system is so central to the process, it’s good to know as much about it as you can. If your FICO reflects a negative credit report there are steps you can take to correct it. Check it out in “MA Applicants Can Head Off Credit Report Roadblocks”.   Even with less than stellar credit you can make buying a home possible as I explained earlier if your Credit Score is low, You still may be able to buy your first home if you do some careful financial planning.

  • Careful = attending to every single detail.
  • Financial = set aside emotion. It is all about the numbers.
  • Planning = every action taken now will have an impact – chart them out.

While you make sure your credit report squared away you need to plan for the down payment.   The really good news is that there are new programs that significantly reduce down payment requirements. There is the Fannie Freddie program I wrote about last week that started yesterday and last month I presented information on a program in its pilot phase that builds equity faster and also has a low down payment requirement.

Even with these low down payment requirements there is not getting around the fact that you will you will need to build a savings account for the down payment and closing costs.   Sort of like losing weight you may need to give up a few favorite things to reach your overall goal.   Some really great ideas are outlined in my article from last December “7 Tips for Speeding Up Your First MA House Purchase.”

It may seem like there are many steps to buying a house and that the entire process is overwhelming.   Really if you take the time to re-read these articles (and possibly explore some others) and lay out a plan you will be well on your way. Or contact us and we will work with you through all the steps and help you put a plan together. Whether you buy this year or we work on a longer range plan to get your financial house in order, we are here to help with solutions.

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