Expert tips to set yourself up to become a homeowner
- 4 min read
Home ownership might seem daunting, but it doesn't have to be.
Glenn Brunker can help. As president of Ally Home , he's intimately familiar with the ins and outs of homebuying, the tips and tricks, insights and understanding that can help you purchase the home of your dreams. Here’s what he had to say.
Set a budget.
One of the first steps toward buying a home is determining your price range. This will vary for everyone based on their specific situation, but Brunker has a few guidelines. "The amount you spend on a home should be a number you feel good about at closing time and continue feeling good about as you make monthly payments."
Experts don’t recommend taking on more house than you can afford. Use a debt-to-income ratio (DTI) calculator or Ally's free home affordability calculator to get a better sense of the specific numbers.
“The amount you spend on a home should be a number you feel good about”
Save for a down payment.
The biggest expense of buying a home is the down payment and saving for that requires some forethought. The first step is to find ways to start adding to your savings.
"Look at your monthly expenses and income and try to find areas where you could be saving more," Brunker says. "Is there something you can cut that will help you contribute to your down payment fund? Whether you begin saving $100 or $1,000 per month, any contribution to your savings can get you started in the right direction." By pairing a high-interest savings account with something like buckets , a feature of Ally Bank’s Savings Account, it is simple to set financial goals and track your progress.
Consider mortgage rates.
Another factor to consider is mortgage rates . While they are higher now than they were a few years ago, Brunker thinks that "2023 could be the year of the buyer." He adds that potential buyers should "remember purchasing a home is typically a long-term investment, and it’s important to set your financial goals while remaining flexible. Prioritizing your big picture over waiting out the market could pay off for you in the long run."
Research lenders.
Do your research and choose the right mortgage lender for yourself, then utilize the knowledge your home-loan expert can provide. Furthermore, work with them to learn how you can structure your loan (including rates and terms) so that it helps you reach your goals.
Enjoy the process.
And be sure to take a moment to enjoy the homebuying process. List out your must-haves and wants in your future home while keeping an open mind. Find a neighborhood and community that you can see yourself becoming a part of for years to come. "A home is likely one of—if not the—largest purchases you will make in your lifetime," Brunker says. "Why not make it a positive experience?"
You might not think homeownership is in your immediate future, and that's okay. But keep it in mind. "I believe you should always be thinking of homeownership. Even if that goal is not attainable or desirable for you right now, there are things you can do today to set yourself up for possible homeownership in the future," Brunker says.
Take steps such as starting to save for a down payment or improving your credit score so in the future you can get a better rate and make your mortgage payment more affordable. By preparing now, you have a greater chance of securing a home you will love in the future.
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