Are you ready to buy a home? If you think this is the year to put your rental days behind you and move into a home of your own, now is time to prepare. Even if you won’t be ready to buy in the next six months to a year, you should still take steps to get ready for that eventuality.
Today we’ll go over 10 must-do steps to prepare you to buy a home. Crossing these items off the list will make it easier for you to find and finance the home of your dreams.
1) Check your credit score. A good credit score is essential to buying a home because it proves your track record of paying off debts such as credit cards and college loans. A higher credit score makes it easier to qualify for a low interest rate, making your purchase more affordable.
2) Start saving. This is easier said than done, but you will need cash reserves to buy a home. This may not be as much as you think. You will have to prove to a lender that you can afford housing payments that may be higher than your current rent. Anything you can do to start saving is of utmost importance.
3) Earn extra cash. Many first-time homebuyers are low on cash. Consider taking drastic steps to cut spending or increase your income. You could sell some of your stuff or take a part-time job for extra cash flow.
4) Consult a lender. The sooner you visit a lender, the faster you will know where you stand as far as getting a mortgage and how to improve your credit if it’s not ideal. Having a pre-qualification or pre-approval letter will give sellers peace of mind.
5) Investigate down payment assistance programs. It can pay to explore down payment assistance programs. You don’t have to be destitute to qualify for assistance.
6) Decide on comfortable monthly payments. A lender can give you an idea of how much house you can afford, but you have to create a personal budget to decide how much you will be able to spend on your mortgage payment.
7) Attend a seminar or take classes on buying a home. If you want to learn more, we and our lenders are happy to go over all the steps in detail. There are often free seminars that explain the home buying process.
8) Start looking at neighborhoods. Unless you already know where you want to live, visit a variety of potential neighborhoods. You will want to scout out the areas that meet your needs in terms of transportation options and other amenities. Exploring different locations will help you narrow your priorities.
9) Visit open houses. Going to open houses early in your search will let you see what is available in your area that might fit your budget. You will also begin to see what matters most in your decision—the location, room to entertain, or outdoor space.
10) Interview real estate agents. It’s a good idea to talk with and interview multiple real estate agents to find one that you can trust and has your best interests in mind. It is important to see how well you interact with someone who isn’t just interested in a real estate deal.
If you have any additional questions about a home search, advice on lenders, or would like to meet my team, please let me know. Or, if you have any questions that you would like answered on upcoming videos, contact us. If we choose your question, you will receive a gift card for your time. We look forward to hearing from you soon.