It’s easy to watch “Million Dollar Listing” and “House Hunters” and imagine yourself finding and moving into a dream home of your own. But when it’s time to get serious about your search, how can you figure out what you can actually afford? The experienced Real Estate team at YaYa Group has some guidance to help you get started!

First, get specific about what you need.

Do you have a growing family and need some additional bedroom space? Maybe you really want a finished basement that can be a hangout space for the teenagers, or a bonus room that can serve as a home office? Is having a separate guest bathroom important? Do you need a big yard for the dogs?

Get as specific as you can about your wants and needs in your home – not just now, but also for the next 5-10 years – so you can start thinking about what to look for. (Important note: this means getting specific about your realistic needs for your future in your first home, not necessarily listing everything you ever desire in a dream home!) 

“Understand exactly what you need, and that will help you find the best home for you and your family,” says YaYa Group Realtor Partner Ro Azulay. “All of those criteria will help you determine your mortgage and what you can afford.”

Second, figure out how much you can afford to spend on a down payment.

Your down payment is the out of pocket cash you will pay for your home; the rest of the house will be paid with your mortgage. Get comfortable understanding your own financial situation, and understand how much cash you can realistically put toward your home purchase, as well as a reasonable budget for your monthly payment.

Your monthly home payment is more than just your mortgage principal and interest; it also can include:

• PMI (private mortgage insurance) – generally required for a down payment of under 20% of the total cost of the home
• Home insurance
• Property taxes
• Utilities and operating expenses (electricity, water and sewage, etc.)

Having an understanding of both what you have available for a down payment, and your budget for monthly payments, can help you understand your comprehensive home budget.

Third, meet with a mortgage advisor or lender.

A financial expert will review and analyze your finances, including your preferred cash down payment amount, credit score, and other existing loans and debts, to determine the size and type of loan you can qualify for.

“There’s tons of loan options out there, and a lender can help you find the best option for you,” says Louie Damonte, Realtor Partner at YaYa Group.

If you’re having a hard time determining how much cash you have available for a down payment, a lender can help there as well.

“A lender can outline and itemize everything that a buyer must know about what they need to bring to the table, in terms of a cash down payment and what a financial institution will loan them,” Damonte says.

Once your lender issues a pre-approval letter, you can begin looking in earnest for homes that align with your budget.

If you don’t know any lenders, your realtor can help you find one!

Finally, trust the process.

“Know that it’s a process, and sometimes it can take up to a month, or six months,” Azulay says. “But with the right realtor, you don’t need to compromise. Understand exactly what you need, and that will help you find the best home for you and your family.”

Want to talk more about the home-buying process, and hunt for homes in your budget around Northern Nevada? Connect with one of the experienced realtors on the YaYa Group team! Visit yayarealty.com to get in touch.