How To Prepare For Buying A Home Successfully
There are many steps when considering whether you will purchase a new home. It can certainly have its ups and downs. You’ll be elated one day, and forlorn the next day.
What things should you be considering? How will the finances work out? What is your current lifestyle? Does it match up? Our experts have put together some great tips for you as you consider this major life choice that will hopefully reduce some of the stress, concern, and anxiety.
Are You Qualified
Unless you have a major cash supply, it’s likely that you’ll have to find a lender. But before making that step, it’s good to find out if you’re even really qualified right now. One of the first steps you can take is to check your credit. There are many websites that will offer a free credit score, Credit Karma and Annual Credit Report to name a few. The lender is likely going to ask you for this information anyway, so it’s good to have it on hand.
You can expect a score that should be somewhere between 350 to 850 points. The great news is that the higher your credit score, what you get saddled with in terms of the interest rate on your loan will be lower.
There are various factors that get taken into account when your credit score is calculated; from whether you’ve paid your bills when they’re due, to the amount of debt you currently owe. Other factors include the length of time that you’ve been using with credit, how often you apply for new forms of credit, whether you’ve recently applied for credit and the different forms of credit you currently have.
If you’re a first time home buyer you can try to get a Federal Housing Administration loan, which can be acquired even if you don’t have the best credit in the world. For the rest of us, if we want to get a good mortgage rate, we should be working to get our credit score above 720.
What Would You Be Okay With Spending
Perhaps a more potent question to ask yourself is the amount you can responsibly afford. For most folks, their mortgage is their largest monthly payment. Even though you might be able to qualify for a really large mortgage, it doesn’t mean that’s the best decision. Be wise, take into account your current financial situation, and determine what you would be okay with spending per month.
Find A Real Estate Agent You Can Trust
Don’t feel pressured or hurried to make a decision on an agent. If you know someone that has a real estate agent that they trust doesn’t mean that person will be right for you. Or maybe they will. Do your homework, check their references and online reviews, have a personal interview with them, ask yourself if this is someone you could work with for the next few months or possibly years depending on your timeline.
Time To Work With A Lender
There’s a lot you can do to get prepared financially before actually putting in any offers. Think about getting approved for a loan prior to starting your home search. Make sure to always work with licensed lenders in your town or area. Again, check their references and online reviews.
Often times being pre-approved is a benefit if you ever get into a bidding war for a home. The buyer may be more inclined to take your offer because they already know that you have the credit and funding to make the purchase.
Remember, even if you get a pre-approval from a lender, you don’t have to choose them as the final supplier of your mortgage. Pre-approval is just a piece of paper that states how much they would be willing to loan you.
Now It’s Time To Get Looking
By now should have had plenty of time to have conversations with the real estate agent that you selected. They should understand what you’re looking for in a home, including what your specific wants and needs might be. At this point, you can start really scouring online listings, and hopefully, your agent will use their insider knowledge of the market to find a great deal for you. Be sure to visit any home you think you would be interested in. Sometimes you’ll just get a feeling and know this is the right home for you, even if it doesn’t check all of the boxes you went in with.
Things Are About To Get Real
You’ve gone to open houses, private tours, eaten cookies, seen homes that are definitely not what you’re looking for. You’ve come up with a top list and one that seems like your new dream home. Your real estate agent will help guide you to put in an offer. The great news is that whatever is on the listing, it’s most likely just where the price is going to begin. With a good head for negotiation, you can bring that price down by tens of thousands of dollars. Don’t forget that the negotiations don’t just have to be about taking cash off the listing price. You can counter with many creative solutions.
Get It Inspected No Matter What
Make sure that any offer is contingent on a home inspection. A home that looks amazing at first glance can have many hidden nightmares. You want to catch these potential problems before signatures are exchanged so that the original owner can either have them fixed before you move in, or the cost of any repairs or upgrades are deducted from the final price of the home.
Don’t Forget The Basics
In all the excitement it’s easy to forget, you’re still going to need to let your utility company know about the move so that you can get the utilities changed to your name. It’s also a great idea that if you already had insurance for an old home that you let your agent know to switch it over to your new home, or if this will be your first home purchase to work with a reputable home insurance company to get your largest and most expensive asset insured.
It Finally Closed
Here it is. You’ve gone through all the hoops, checked all the T’s dotted all the I’s. Expect to be around a table for a while as both parties sign all the appropriate paperwork. Hang in there, after it’s all over, it will be time to celebrate!
Congratulations, you’re now a homeowner. The actual move-in day should have been determined in the paperwork, so once that day comes it’s time to get the moving truck and start turning your new house into a home. We hope this article will be helpful to you on your journey.