Making the decision to purchase a home is a big one, whether you’re a first-time homebuyer, or looking to move from your current home. Taking your time to prepare will help eliminate surprises, and remove some of the stress during the buying process. The following are the ideal steps you should take before buying a home.
Get Your Finances in Order
Purchasing a home is a large financial investment which, for many, will include a loan and financing. From the start, make sure you know what your credit score is, as well as that of anyone who will be on the loan with you. The higher your credit score is, the lower your interest rate will be. There are a variety of services you can access your credit report for free.
Along with determining your potential interest rate, figure out what you can realistically afford. Keep in mind that your payment will be comprised of more than a mortgage payment; you’ll have taxes and insurance to pay, as well. You can also utilize tools like the Zillow Affordability Calculator to help estimate what house price may fall in your budget.
For an official determination of whether you can afford a home, get in touch with your preferred lender for a pre-approval. The lender will calculate your debt-to-income ratio and take into account other financial factors to determine your loan amount. Not only does this give you an idea of what you can afford, having an official pre-approval letter also shows sellers that you are ready to buy. Keep in mind, however, that sometimes you may be approved for a loan that is higher than the amount you actually want to spend on a home, so make sure you’re sticking with the budget that makes you comfortable.
Create Your Wish List & Start Your Search
Once you’ve determined how much you can afford, create a wish list of features you’d like your new home to have. These should be things that you can realistically find in a home within your desired price range. Some of the most important items to think about include:
- How many bedrooms and bathrooms you want
- Overall square footage
- Outdoor space
- Preferred home location
- The type of home you’d like (ranch, 2-story, farmhouse, etc.)
- Desired school district
- Work commute
Unfortunately, unless you’re building your own custom home, it may be very difficult to find that checks off everything in your wish list, so think about what you’d be willing to compromise on and what you truly need in a home.
Now comes the fun part: contacting a local real estate agent who can help you get the process started. Working with a knowledgeable realtor, such as those with Gateway Realty, will help you keep up-to-date on market trends in the area; determine competitive offer prices and negotiate terms; locate homes in areas you may be unfamiliar with; make recommendations for other home services, like inspections and repairs; and provide you with experience to make the process simple. Your real estate agent will also help you with your search, finding you homes that match your wish list criteria, or fit your lifestyle needs. He or she will get you access to the homes for in-person viewing and work up your offer when you find that perfect one.
Putting in the Offer – and Beyond
The home buying process doesn’t end when an offer is submitted. There are many factors to consider as you move forward, including inspections, securing your loan, purchasing homeowner’s insurance, and closing day.
The most important part in buying a home is to not become overwhelmed. Let our experienced agents at Gateway Realty guide you through all aspects of the buying process, helping you find the perfect home for you and your family.