Buying your first home will most likely be one of the most exciting experiences of your life, but that process is going to take quite a bit of planning. Well before you even think about bidding on a home, there are some important tasks that you will need to carry out if you want to acquire the perfect piece of property at a great price. By taking these steps you’ll be better prepared to make the changes you need in your day-to-day life to get the home of your dreams. By failing to take these steps, you may find it more challenging to get the home you really want if any home at all.
Take a Fresh Look at Your Finances
Getting your finances properly set up before you buy a home is going to be vital to your success. That includes taking care of any major debt that you have, looking over your credit score, and saving up for a down payment. Carrying out those steps a few months or years before you plan on purchasing your home could end up saving you a significant amount of money and help you streamline the bidding process.
Home Mortgages are long-term investments and thus, a long-term forecast should be considered when looking at what you can afford. Many people look at the maximum amount that they can spare on a home in their current situation without considering padding for emergencies or luxuries. For example, it’s recommended that you already have enough in savings in case of loss of employment or the need for a new car after a car accident. Additionally, you should consider things like a growing family if you want to have kids in the future. Though you may be considering the space needed for a growing family, you also need to consider the growing costs.
Get Pre-Approved
Getting your finances in order is a great start, but you should plan on getting pre-approved for a loan as well. Home loans can take quite some time to approve, and it is almost always recommended that buyers speak with a lending firm well before they make any bids. Once you are pre-approved, you will know exactly how much you have to spend and what kind of payments you can expect to make in the coming years.
Though there are calculators online to get a general estimate of how much you can qualify for, it’s ideal to contact the mortgage company you plan on working with. Most mortgage companies work with the same interest rates that are federally or locally managed. However, there may be different services or fees at each bank and thus you may want to shop around a bit. For example, some mortgage companies will cover a percentage of the closing costs.
When meeting with a mortgage company, you should be prepared to provide them with a variety of information about your finances. This may include information about your income, debt obligations, credit score, and assets. By taking the time to meet with a mortgage professional ahead of time, you will have a better understanding of how much you can qualify for and what you need to adjust in your finances to qualify for more.
Consider Your Other Expenses
Mortgage payments are just one of the many expenses that you are going to run into as a homeowner, and you should spend some time figuring out how much your property is going to cost you each month. Some of the other expenses that you should consider include insurance, property taxes, and regular maintenance. This cost is typically dependent on your location and the size of your home. Every homeowner should also have an emergency fund that can cover water damage, a broken HVAC system, and other common issues.
Location Scouting
When preparing to buy a home, it is important to consider the location of the property carefully. Location scouting involves visiting potential neighborhoods and exploring different factors that may influence your buying decision, such as local amenities, safety, transportation options, and real estate prices.
Some considerations when choosing a location for your home include proximity to work and schools if you have kids. Additionally, be sure to consider factors like commute times, access to public transportation, and crime rates in potential neighborhoods. Finally, don’t forget to take your personal preferences into account when evaluating different locations – a neighborhood may have great amenities or a convenient commuting option,
Contact a Real Estate Agent
Working with a reputable real estate agent will make this entire process much less stressful. One of those professionals can look over all of your financial paperwork and keep an eye out for any hidden gems that you might have missed. Many of them also use platforms that can help them narrow the search so that you don’t waste your time on homes that don’t meet your requirements.
Even if you plan ahead, the process of purchasing a home can often take months. Starting these steps as early as possible and staying patient will ensure you find an ideal home at a great price.