Things to Consider Before Buying Your New Home
Are you excited about fulfilling your lifelong dream of owning a home…but petrified at the prospect of making the purchase? Buying a home is the largest and most important investment you will ever make!
A Home-Buyer’s Checklist can take a major weight off of your shoulders when you’re ready to buy your first home. It’s a big step—and one where it’s wise to know for sure you’ve got all your ducks in a row first.
To help you figure that out, here’s an all-in-one first-time home buyer checklist with everything you should make sure you have covered before you set off on your hunt—or, if not, consider this a prime opportunity to get started.
1. Find a Great Real Estate Agent
Most home buyers begin their house search online by browsing listings. It is interesting and fun, and you can learn a great deal about styles, colors, surfaces, and other information.
A seasoned pro can guide you through the complicated buying process, and here is the BONUS: There is no cost to you, as a buyer, to use an agent, so you’re getting free advice by using a Real Estate Agent—no strings attached!
We walk you through your transaction, one step at a time. Keep in mind that we are here to answer every question you have, even if you cannot keep track of everything and ask the same question more than once. Remember, most people only buy one or two homes in their lives. It is a big deal and your questions can help take away some of the stress!
Your Real Estate Team will consist of your agent, a lender, the title and escrow company, and a licensed home inspector, and an appraiser…we are all working for you!
2. Talk to a Mortgage Lender
There are a number of great mortgage lenders in the area. We would be delighted to make recommendations. Talking to several lenders is fine, and you are not under any obligation to pick one until you’ve found one who is right for you.
The goal is to get pre-approved for a home loan. To do that, you will need to provide the lender with some paperwork including:
– Bank Statements
– Pay Stubs
– W-2 Forms
– 1099 Forms
– Tax Returns
If the lender can offer you a pre-approval, you will receive:
– An estimate of the amount you qualify for
– The approximate interest rate
– The monthly payment amount
Armed with that information, you know how much you are comfortable paying monthly, so you can set the amount you are willing to pay for your new home. This is truly helpful to your Real Estate Agent, we want you to be financially comfortable.
A pre-approval is typically good for 90 to 120 days; however, it’s easy to renew it if your financial picture doesn’t change.
3. Improve Your Credit (if needed)
When you meet with a mortgage lender, the lender will pull your credit score. A perfect credit score is 850. If your score is 760 and above, you are in the best credit score range, which will qualify you for the most competitive interest rates.
A good credit score is from 700 to 759; a fair score is from 650 to 699; and a score of 300 to 649 is considered poor. Credit scores are calculated based on several factors, including debt payment history, debt-to-credit utilization, and length of credit history.
Some lenders have the ability to originate loans for people with credit scores as low as 580. Lending on scores below 620 is lender dependent.
If you find your credit score is subpar, you may be able to take steps to boost your score. Ask your lender for ideas of how to make those improvements.
Keep in mind that credit scores do not improve overnight. You may need to postpone your house search for a few months in order for your credit to mend.
4. Do Not Damage Your Credit
When you’re in the process of buying a home, you need to walk the straight and narrow with your finances. Your loan does not get fully approved until it goes through underwriting—which will take place just a few days before closing.
Please postpone taking on new debt until after you close on your new home. Pay your current bills on time and wait to buy that new living room furniture or your favorite truck until after your sale has closed!
5. Determine Where You Want to Live
To focus on your house hunt, you’ll need to decide where you want to live. If you don’t have your heart set on a particular neighborhood, think about the areas that fit your family’s needs, what are your commuting times, proximity to family and friends, and overall lifestyle.
6. What Are Your Needs and Wants for Your New Home?
In order to find the home that fits your family’s dreams, it is important to determine what are the “Must Haves,” and then what are your “Wishes.” If you must have a garage, can you do without a bathtub in the master ensuite? If you must have a four-bedroom home, how about a three-bedroom home with an office.
As you look at homes, you will begin to refine your search, and we are here to help you though that process! You might be surprised how your “Wishes” and “Must Haves” might adjust!
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