What To Do Before You Buy a Home
Are you a first time home buyer or just ready for something new?
Buying a home is a great investment. The process, from beginning to end, can be overwhelming, but with proper research and guidance, it can be rewarding. If the thought of buying a home feels a bit daunting, we have simplified it for you. These 4 steps will help you be prepared, and get the most out of the home buying experience.
Clean up your credit score
When was the last time you checked your credit score? It will be reviewed by lenders, and plays an important role in determining how much house you can buy. If you know you won’t be moving into a new house for at least six to eight months, you have plenty of time to do some legwork to clean up your credit. Order your free credit report from Equifax, TransUnion or Experian, and make sure it is free of any mistakes. If you do find an error, contact creditors to make sure everything is up-to-date, and have them send corrections to the credit bureaus as soon as possible. Some lenders will also help you with credit repair.
Get Pre-Approved for a Mortgage
Before you actually start looking for a home, it is important to know what you can spend. After you’ve calculated your own finances, it would be beneficial to be pre-approved for a mortgage. This simply means that you’ll meet with a mortgage banker with your financial documents, with information such as your annual income, your tax returns, and your bank account statements. An evaluation of your fiscal information will help to determine the range that you could be approved for with a mortgage. This is important information as you begin to search properties. You are NOT being approved for a mortgage at this stage, nor are your bound to anything. The pre-approval for a mortgage simply tells you the range of how much you are able to borrow. Be wary of banks that approve you for loans that are well beyond your means, and try to stick to a number that is affordable for your budget
Choose a Reputable Realtor
This is so important! When you work with an agent, the entire process runs smoother and is a lot less stressful than doing everything on your own. Last year 87 percent of buyers bought their home using a real estate agent, and 88 percent of those buyers say they would use their agent again or recommend them to someone else. The proof is in the pudding.
In addition, agents know more about neighborhoods than anyone could possibly discover on their own, including information about active and sold properties, prices, etc. If you are interested in new construction, then another bonus is to find an agent that knows the individual builders in the area. Having an agent who is knowledgeable in your desired neighborhood and one who knows the history and the state of the market is not only beneficial but crucial! Additionally, agents have access to a wide selection of homes that are not yet listed and visible to the public, giving you a leg up on other home searchers. By working with an agent, you have a broader range of options for potential properties in your area.
Finally, not only will an agent guide you step by step through the entire process of selling or buying so that nothing is missed or forgotten, but they will also help you understand the requirements and contract terms. Finalizing contract negotiations is another area where an agent’s expertise is beneficial to you as they make sure all the paperwork is completed in a timely manner and all contract points are addressed. This can be an emotionally stressful process and the agent is there to help by guiding you step by step from contract acceptance to closing.
Define exactly what you want
Your home is one of the biggest purchases you will ever make, and you need to have a clear idea of exactly what you are looking for before you begin the search. You need to determine what the non-negotiables are for your future home and what you are willing to compromise on. Take the time to list what features, floor plans and style of home you are most interested in; what type of neighborhood you want to live in; and other key details. A comprehensive list of wants and must-haves can make it easier to shop for a home, and will help your agent know exactly what you want are looking for in a home.