4 Things to Consider Before Purchasing Your First Home
November 1, 2019
Achieving the American dream of homeownership is a major milestone in life, but the home buying process can seem daunting. Rushing through the process of deciding how much you can afford, how you’re going fix any blemishes in your credit, and saving for a down payment can be costly. Instead, take your time, get advice, and work with a lender to help sort out your financing options.
1. Boost Your Score
Your score plays a direct and important role in whether or not you are qualified for a mortgage, and for how much. With a score of 740 or above, you will be able to secure the best interest rates available. If your score is lower than 740, you should expect to pay a higher rate.
By being proactive now and taking the steps to boost your credit, it will be one less thing you need to worry about during the home buying process.
2. Know Your Budget
Before starting the home buying process, know what you can and cannot afford. After your down payment, you will also be paying principal, interest, insurance, and taxes on a month-to-month basis. Going over your budget can set you up for issues down the road, so keep in mind both up-front and long-term costs that will be part of homeownership. Before you start viewing homes, learn about the current housing market, the average cost of homes in the areas you’re interested in, and even how much house you can get for your budget outside of your desired neighborhood. You might be surprised!
3. Understand the Process
The timeline to buy a home may be a bit longer than expected. Both your lender and your real estate agent will be able to give you a timeline of what to expect once you make an offer on a home.
When looking for a lender to work with, always get recommendations from friends, family, and your real estate agent before searching on your own.
4. Let Your Lender Work for You
Once your offer on a home is accepted, the next few weeks will be a whirlwind from settlement date to inspections, hiring movers, and all of the forms and documents that need to be signed for the closing. Your lender will be able to guide you through the entire process to ensure you stay on track and everything is completed on time.