Buying a home is one of the most important decisions you can make. Before making any decision, it is important to think logically and plan accordingly. Often times, people get so caught up in the excitement of buying their home that they forget to plan, budget, and save. The tips below should not only help you before you decide to buy, but can also put you in a lot better position as a buyer with all the competition out there.

#1: Brainstorm - Ask Yourself Questions and Answer Them!

How much do I have saved for a down payment?
Can I afford a monthly mortgage payment?
How is my current employment situation?
Is there an immediate risk of losing my job?
Do I want to live in the city I work in? Or commute?
Is it important live close to my family and friends?
How long would I like to live in the house I am thinking of buying?
Am I being realistic about expectations I have for my new home relative to my budget?
How is my credit score?
Can I do anything to improve my score before I buy a home?

#2: Detail Your Finances

Is there a credit card balance you can afford to pay off? Do you have an emergency savings account in case you lose your job or fall ill? Have you checked your credit report for errors. Perhaps you have been straying from your budget, eating out and shopping? Now is the time to make those small financial changes and tie up loose ends.

#3: Make Mock Mortgage Payments

Let's assume your mortgage payment will be $1,500. Can you pretend you have to pay this amount for the next 6-12 months? Use an existing savings account and pay yourself $1,500 per month. This mock mortgage will get you used to paying a monthly mortgage payment without having the risk of owing a lender. Discipline is key and this will be a good gauge if you are ready to undertake a huge financial obligation.

#4: Identify Needs vs Wants

So you've decided you are willing and able to have a mortgage payment. Now let's discuss needs vs wants. How many bedrooms and bathrooms do you need? Many times when potential buyers get pre-approved for a home loan, they end up buying a home that is close to their maximum budget. For example, let's assume you were approved for a $400,000 home loan. Most buyers will think, "sweet, I can get a $400,000 home!". Perhaps a wiser choice is to buy slightly below your means. After all, a home is a need, but a maxed out budget, with a 10,000 square foot house is usually a want!

#5: Get Pre-approved!

There's nothing worse than shopping for something without knowing how much you can spend. Think about it, would you go to the grocery store, fill up your cart and wait to see how much cash was in your wallet while the checker is ringing you up? Only to find $1 dollar in your wallet! Getting pre-approved can save you a ton of heartache and wasted time. It is always better to know how much you can afford starting at the onset of your house hunting.

At LifeSource Mortgage we are your Orange County Home Loan & Mortgage specialist! Contact us today if you need to get pre-approved, need a interest rate quote, or even if you just have a mortgage related question because we are here to help!

LifeSource Mortgage offers fixed rate, FHA, VA, ARM (Adjustable Rate Mortgages), Reverse Mortgages and more. Please call our Orange County offices @ (949) 492-2252 to lock in your rate today!