The time has come, and you are ready to buy, but review this checklist before you start searching for your next home. This list helps you prepare your budget in advance and guide you to financial success in the future.
1. Reduce Debt & Increase Credit Score: Before you start looking for your next home, you should request a credit report. This will give you a starting point for understanding your credit score before bidding on a loan. Your credit score will influence the interest rate of your loan.
2. Save Money to Set Yourself Up with a Large Down Payment: While it is possible to purchase a home without a 20% down payment, it’s best to get as close as possible. This will allow you to have a lower mortgage rate, Avoid PMI, and receive a better rate. If you do not have a 20% down payment, you may qualify for a VA or FHA loan.
3. Keep a Conservative Budget: It’s just not the list price included in the purchase. Keep in mind that inspection fees, earnest fees, moving expenses, and typically new furniture purchases you should prepare for in advance. Along with the initial moving expenses, you should also know your monthly budget. With homeownership comes property taxes, HOAs, home repairs, and more. You want to make sure you are prepared for future budgeting as well.
4. Get Pre-approved: Your preapproval can help if you are putting in an offer against someone who is not...makes you look like a more ready now buyer. Your pre-approval is based on your income, debt, and credit history. This is different from prequalification, which is how a lender determines how much you can afford.
5. Set Your Home Buying Budget: By getting your finances in line before your first home showing, you know the price range of a home you can afford. Set a realistic budget that fits your income level and the characteristics you want in a home.
6. Find an Agent You Trust: An agent will be able to guide you along the way and educate you n the home buying process. Also, keep in mind an agent usually is very well connected to the other professional you will need before closing day.
As you begin finding your next home checking these items off your list will provide you with a more successful home buying experience. Our team is here to help you! Let us know the area and neighborhood you are looking to live in and your top needs. Our team of professionals will assist with finding your next home.