Is buying a home one of your goals for 2019? Buying a home can be complicated and there are many steps to consider before you even start the house hunting process. Here are 7 steps do’s to consider so that you can start the search with confidence:
- Start saving early
While there are programs that allow for low down payments, it’s always best to come up with a down payment. When thinking about a down payment don’t forget about closing costs. In some markets, sellers are paying the buyers’ closings costs, in others, it’s not an option because there are competing offers. Consult your loan officer and realtor to discuss the options. Everyone is different and every situation is different.
- Do your best to clean up your finances
Generally, buying a home means adding a mortgage to your monthly expenses. Before you even consider doing that, you’ll want to take some basic steps to clean up your finances. Contact a loan officer to get the best plan in place. Do not rely on the internet or what your friend told you to do, the loan officer will help you build the perfect plan that will not harm your credit.
- Set a Budget
Don’t spend every dollar you qualify for. Just because you can qualify for a larger mortgage doesn’t mean you want to have that kind of payment each month. Put a budget in place and let your loan officer know what you are willing to pay every month. Use the mortgage affordability calculator on Zillow to help determine what you can afford.
- Know your non-negotiables vs. your nice-to-haves
Do you need an open concept floorplan or a large master suite? Is the dual vanity in the bathroom completely necessary or just a perk? Are you absolutely against a pool in the backyard? In general, it’s best to have a list of a few absolutes that you know won’t fit into your lifestyle. Knowing these things will help to narrow your search.
- Find a trusted real estate agent
This may be the most important decision you make in the entire process. Not only will a real estate agent be your lifeline during the home buying process, but they will help you negotiate the final deal. Make sure you find a real estate agent who is looking out for your best interests, not their bottom line.
- Get pre-approved
It’s smart to get pre-approved for a loan early in your home search. Pre-approval requires the lender to pull the credit information and assess your financial situation. The lender will then give you a letter that states the amount they would be willing to lend you. If you get in a multiple-offer scenario, being pre-approved may give you an edge because the seller will have more confidence that you will be approved for a loan large enough to purchase their home.
- Start Driving!
If you’re new to the area, consider driving around different neighborhoods to understand the lay of the land. Venture out at various times of the day and different days of the week. While you do this, stay in close contact with your agent and let them know as you cross neighborhoods off the list or add to the list. Your agent can help with suggestions you may not know about.
After you make it through these 7 steps, it’s time to start the house hunt! We know it can feel overwhelming at times but finding a realtor who knows the process can keep you on track.