Purchasing a home is one of the biggest decisions most of us will make in our lifetime. It’s an exciting time, as we consider what kind of home we want to buy, how many bedrooms we would like to have, and even what part of town we would like it to be in.
Before you start buying furniture and picking out wall colors, there are some very important steps like applying for a mortgage that you need to take so your dream of home ownership can come true.
The process of buying a home can be intimidating. It sometimes requires you to obtain a whole new vocabulary that includes words like amortization, escrow, and jumbo loans, and to make some tough decisions, but, if you take the time and do the prep work, it can be a pleasant and educational experience. Here are 10 tips to help get you started:
- Know yourself. Almost 30% of first-time home buyers’ reasoning for making the purchase was the desire to own a home of their own, according to the National Association of Realtors. That passion can muddle the many decisions which will need to be made, so figure out what is most important to you.
- Know your wants from your needs. This can keep you from crossing off the list a house at a great price. Ugly wallpaper shouldn’t disqualify a house; have the vision to see beyond that.
- Is this house for right now, or for long term? This question can determine how important a good school district is, or if it matters whether the house is on a busy street.
- Make a list. This process is a very emotional one and making decisions based on feelings can sometimes lead to a bad choice.
- Start with your financials. Knowing how much you can afford will dictate what you can buy and where.
- Keep within your budget. According to US News and World Report, your monthly mortgage payment (including taxes, insurance, etc.) should be about 28% of your gross monthly income.
- Check your credit score. In order to get a mortgage (which 95% of people need in order to buy their homes), you will need a good credit score. If there are any issues with yours, fix them as soon as possible.
- Get pre-approved for a mortgage. Nothing makes you a more attractive buyer than being pre-approved, and it will inform you about exactly how much of a loan you can get before submitting an application. A mortgage lender can offer you advice about what type of loan is best suited to you and your circumstances.
- Hire a real estate agent. An agent can offer a wider variety of homes for you to look at through their access to Multiple Listing Service (MLS) and their relationship with other agents, and they act as the liaison between you and the seller, saving you countless hours. They can advise you on everything from a town’s planning and zoning laws, to costs of updating a home, to determining if the house is priced fairly, and, ultimately, help you save money.
- Hire a home inspector. A home inspector is specifically trained to look for any issues in a house you are considering buying. From the roof, to the electrical wiring, to any structural issues, a home inspector will offer you an unbiased opinion of their condition, and, depending on what they find, this can save you thousands of dollars.
With low Interest rates, now is an excellent time to purchase a home, but take the time to look before you leap. You can’t return a home like a shirt to the store because you don’t like it, so do your homework, research what you can, read the fine print, and get professional help—whether it’s in the form of a real estate agent or a mortgage company like anmtg.com that is dedicated to helping you fulfill your dream of home ownership.