Are you ready to travel down the path to homeownership? It’s a smart decision to make. A few of the best advantages of owning your own home is that you don’t spend money on rent, you build equity, and you enjoy tax benefits. You also have a safe haven that’s all your own.
If you’re planning to buy your first home soon, here are some handy tips you don’t want to miss, straight from the experts (if we do say so ourselves).
Work on Your Credit Score
Credit scores play a big role in landing the mortgage loan for your future house. Pull your credit report online and go over every line. If there are errors (it’s estimated there are errors on one in four credit reports) dispute them with the bureaus. If you have late payments, get and stay current on your debt obligations. Also pay down your credit cards to under 50 percent of their limits.
Start Socking Away Every Extra Dime
Buying a house takes money, and you need as much of yours as you can spare. Forgo the yearly vacation, the expensive Christmas gifts, and the new car. Curb eating out and other costly pastimes. Stash that extra money into savings for your down payment, closing costs, moving expenses, and other unexpected costs that come with new homeownership.
Write Out a (Realistic) Budget
Get a handle on what you spend money on, and be honest with yourself. Do you eat out four nights a week? Drink expensive wine? Golf every Sunday? Add all of those costs in to get an accurate reading of how much home your budget can handle. Then you can determine how much home you can really afford.
Be Reasonable About Your Expectations
First-time homebuyers often want it all in their house and set themselves up for disappointment. Decide on three to five must-haves and be flexible about the other amenities. If you want a big yard and a garage in a nice neighborhood, you need to be willing to accept small closets and bathrooms that aren’t updated, for example.
Narrow Your Home Search
Looking all over town at every type of home will overwhelm you, fast. Choose a broad area you want to live in, the budget you’re looking for, the handful of amenities that are must-haves, and only view houses that fit. Looking at homes you can’t afford is a surefire way to make you want to bust your budget. Don’t do it!
Find a Seasoned Real Estate Agent
First-time buyers lean on their agent heavily, so make certain you pick a great one. Ask your trusted family and friends for recommendations, and interview a few Realtors before you decide. You should feel confident in their knowledge and ability, but you should also “click” with them and feel comfortable asking questions.
Choose an Experienced Loan Officer… and Get Pre-Approved
The other valuable member of your homebuying posse is your loan officer. Like your real estate agent, they’ll guide you through your loan process. Meet with them early on, give them your financials, and get pre-approved for your loan. This gives you more bargaining power when you’re negotiating with the seller.
Don’t Hesitate When You Find Your House
You’re entering a seller’s market, which is why it’s important to know what you want, and recognize it when you see it. If you find a home that meets your criteria, don’t “sleep on it.” If you do, it will almost certainly be gone. Sit down with your agent and write an offer.
Explore Mortgage Loan Options
Deciding on a mortgage is vital to your purchasing process. Talk to your loan officer about what you qualify for, how long you want the term to be, and any special programs that benefit you (like VA loans, FHA loans, etc.). Listen to their recommendations, weigh the pros and cons of each, and choose the one that fits your finances and your budget.
Get a Home Inspection
Don’t get carried away with planning your furniture layout and forget a home inspection. These are key to protecting your investment and avoiding unforeseen issues with your house. A home inspector will examine areas you can’t see from a simple viewing, like the roof, wiring, and foundation. Go over the report and make sure there are no surprises you can’t handle.
Close on Your New Home
On closing day, be prepared to show proof of home insurance and be ready to sign your name several dozen times. Your real estate agent and loan officer may be there with you. At the end, you’ll receive your keys and be a proud new homeowner.
Enjoy!
You’ll undoubtedly make many wonderful memories in your new place. Congratulations!
