When buying a home, there are a lot of things to learn and consider; budget, mortgage, down payments, and more and it can become extremely overwhelming. By being prepared and knowing what to expect, you can make the process go smoother and ensure that you are getting the best deal on your new home. Here are 10 important things you should do when you’re looking to buy a home.
- Check Your Credit
One of the most important things you need to do before buying a home is to check your credit score and credit history. This will give you an idea of where you stand financially and what kind of interest rates you can expect to get on a loan. If your credit isn’t in great shape, now is the time to start working on it. You can get a free credit report from each of the three major credit bureaus once per year. Use this opportunity to check for any errors and dispute them if necessary. You should also start paying down any outstanding debts and make all your payments on time from now on. These steps will help improve your credit score over time, making it easier to get approved for a loan with a good interest rate when you’re ready to buy.
- Pull Out Your Reports
You should start by pulling your credit reports from the three major consumer reporting agencies to identify any errors or omissions. If you find anything that needs to be corrected, take steps to do so right away. You can also work on building up your credit by paying all of your bills on time and keeping your balances low.
- Fix Credit Report and Monitor them Regularly
If you’re serious about buying a home, you need to do everything possible to make sure your credit reports are as accurate as possible. This means checking for errors and disputing any that you find. You should also monitor your reports regularly so you can catch any new errors right away.
- Nail Down Your Budget
Now that you have a better idea of your credit situation, it’s time to start working on your budget. Start by taking a close look at your income and expenses to see where you can cut back.
Once you have a good handle on your budget, you can start looking for a mortgage. Be sure to shop around and compare rates from multiple lenders. You should also make sure you understand all of the fees and costs associated with the loan.
- Consider Your Needs And Wants
It’s important to think about what you really need and want in a home. Take time to list out the must-haves, as well as the would-like-to-haves. This will help you prioritize your search and find the right home for you and your family. You should narrow down your preferences for buying/selling a property , mortgages and home insurance to find the best options for your individual situation.
If you’re not sure where to start, an online handy mortgage calculator can help. Just enter some basic information about the type of property you’re interested in and we’ll provide an estimate of what your monthly payments could be. From there, you can start to compare mortgage rates and terms from different lenders to find the best deal.
- Get Your Assets in Place
You’ll need money for a down payment (the bigger, the better), closing costs, and maybe some repairs or upgrades to the home. Save until you have at least 3% of the purchase price saved up. If you’re pulling together the minimum amount, know that you’ll pay Private Mortgage Insurance (PMI) if your down payment is less than 20% of the purchase price.
If you have extra cash on hand, consider using it to pay down debt or boost your emergency savings fund. These moves can improve your credit score and make you a more attractive borrower in the eyes of lenders.
- Shop Multiple Lenders
Not all mortgage lenders are created equal. Some may offer great customer service but charge higher interest rates. Others may have low rates but terrible customer service. The best way to find a good fit is to shop around with multiple lenders.
- Get Pre-Approved for Mortgage
The first step to buying a house is securing financing. You’ll need to get pre-approved for a mortgage before you start looking at properties. This will give you an estimate of how much you can borrow and what your monthly payments might be.
The pre-approval usually expires in 90 days , so if you don’t find a property within that time frame, you’ll need to get re-approved. There are a few different types of mortgages available, so it’s important to compare options and make sure you’re getting the best rate.
- 15-Year Mortgage:
With a 15-year mortgage, you’ll have a higher monthly payment but you’ll pay off your loan in half the time. This can be a good option if you’re looking to build equity quickly.
- 30-Year Mortgage:
A 30-year mortgage is the most common type of loan. It has a lower monthly payment, but you’ll end up paying more in interest over.
- Look For Down Payment Assistance
You don’t necessarily need a 20% down payment to buy a home. There are a number of programs that can help you with a smaller down payment, and there are even some programs that can help you with no down payment at all. Check out your local and state government websites for more information on these programs.
- Work With A Real Estate Agent
Buying a home for the first time can be a daunting task, but working with a real estate agent can make the process much easier. A good agent will help you find the right home, negotiate the best price, and handle all the paperwork. They’ll also be able to give you advice on things like schools, neighborhoods, and local amenities.
When you’re ready to start looking for a home, be sure to find an experienced agent who you can trust. Ask family and friends for recommendations, or look for agents who have been rated highly by past clients. Once you’ve found a few good candidates, interview them to see if they’re the right fit for you.
Conclusion
House hunting can be an intimidating task, but it doesn’t have to be. By following these ten tips, you can make the process much easier and less stressful. With a little planning and patience, you’ll be in your new home before you know it.
Want to schedule a free 15 minute home buying consultation? Click here to schedule a FREE 45 minute phone call with Managing Partner, Grigory Pekarsky.
