Your Pre Buying Checklist
You have decided you are ready to buy a house – it’s an exciting time! Before you get online and start your house hunting, though, there are some things you can and should do to prepare for this big, exciting change. This checklist is curated to help you prepare for the best outcome on your search.
1) Get Right With Your Credit: before you start looking for that dream home, it is advised you get a good understanding of where your credit score stands. We highly recommend you request a credit report before you take out a loan. Your credit score influences the interest rate of your loan, so being able to see what your number is will help you decide how to proceed – whether or not you need to evaluate and reduce your debt, for example.
2) Up Your Down Payment: while there is definitely some wiggle room with how much you can put down on a house, it is recommended to put down as much as possible – 20% or more is a solid number. This will give you access to smaller mortgage payments, avoid PMI, and receive a better interest rate. Saving up so you can put your best foot forward with a down payment is recommended. If you do not have a 20% down payment you may qualify for a VA or FHA loan.
3) Keep a Conservative Budget: when searching for a home, keep in mind that its not just the price of the house you need to budget for. There are inspection fees, earnest fees, moving expenses, and typically new furniture purchases. In addition to your initial expenses, you also have to keep in mind your new monthly expenses: property taxes, HOAs, home repairs, utilities, and more.
4) Get Preapproved: your preapproval could make or break your offer if you are in a bidding war on a home. When you get preapproved, you look like a more “ready now” buyer to the seller. This differs from prequalification, which only gives you an idea how much you can afford.
5) Set Your Budget: getting your finances in line before embarking on this journey will save you a lot of time and stress. Basing your budget on your income level and what you can afford in terms of a mortgage will ensure you are seeing a much more curated list of homes that will suit your financial needs.
6) Find An Agent You Trust: an agent is your best resources in the home buying process. They will be able to guide you along the way, educate you in the process, and connect you with professionals you may need for closing.