So you’ve decided to take the next step and buy a home? Congratulations! Purchasing a home is a huge step towards your financial future; it is one that will prove beneficial time and time again. To ensure this important move goes as smooth as possible, take these five steps to prepare:
1. Decide How Much You Can Afford
You can do this by budgeting how much your monthly expenses are and what amount you can dedicate to your living expenses. Be sure to factor in real estate taxes, insurance, etc.
2. Develop Your Wish List
When you are looking for a home, it is rare that you will find everything you’ve ever imagined in one home. Therefore, you will need to jot down a priority list of what amenities you want first, second and so on. It might be helpful to categorize them as “must haves”, “can do without”and “wish-list”. Use these categories to remember what you can and cannot do without.
3. Discuss Finances
When you’re looking to purchase a home, there are some up-front additional expenses that you may not anticipate. So it’s important to be as prepared as possible, this includes researching what costs you are responsible for; such as, down payment, closing costs, moving costs, etc. Having an estimate prior to the home search will help you narrow down exactly how much you can afford and/or how much you need to save.
4. Get Credit in Order
When you are looking to get prequalified and attain a loan for a home, your credit history will be checked. As a responsible buyer, it’s best to be proactive. Research your credit prior to getting prequalified. There are many free credit score websites including FreeCreditScore.com. Check what you can improve on and attempt to make those improvements prior to getting an interest rate. Having a good credit score is important when making this financial step.
5. Find a Realtor and Get Prequalified
When you are seriously looking to purchase a home, you will need a realtor you can trust. It is recommended to interview at least two realtors to see who will represent you well. When looking into a realtor, you can look for specific accreditations, such as the Realtor® stamp, to guide you through the process. Choosing a realtor is a personal choice and should be made wisely as they will help you during one of the biggest decisions in your life.