Preparing to Buy a Home?
Your Home Buyers Checklist
Preparing to buy a home is not an impulse purchase; you can’t just waltz in and declare “I’ll take it!” Long before you get to making that offer, and even before going to your first open house—there is a ton of things to do. Overwhelmed? Here’s a checklist of everything you need to do to get ready to buy a home.
Check your credit score
Do not start browsing homes until you have checked your credit score. This is the number that mortgage lenders will look at to determine whether you are “credit worthy,” and thus dictates the rates you will get. The higher your credit score, the lower your interest rate—and that’s what you’re going for. Get a free copy of your credit report at AnnualCreditReport.com to see where you stand.
Clean up any credit blemishes you can
Any surprises on that report? Credit errors are more common than you might think, so contact the credit bureau to correct any erroneous information. Next, make sure you are clear on how much home you can afford. Check out a mortgage calculator app that lets you determine your monthly mortgage payment, adjusting for variables such as the size of your down payment, your mortgage type, and current interest rates. When preparing to buy a home, don’t forget possible PMI payments and the cost of Home Owners Insurance.
Shop for a mortgage lender
A prospective home buyer should make one of their earliest stops with a mortgage originator to see if they can qualify for a mortgage and confirm how much of a mortgage they can afford. Different mortgage shops offer a wide variety of rates and programs, so shop around to find the best rate and mortgage option for you.
Secure mortgage pre-approval
Once you’ve found the mortgage that’s right for you, you’ll want to show sellers that you have what it takes to buy their home. In hot markets, a pre-approval is almost required for a seller to take your offer seriously. That’s because it spells out exactly how much a lender has agreed to loan you, thus assuring the seller that you’re both willing and able.
Save up for a down payment
To get the best rates, you’ll need to make at least a 20% down payment on a home. With the current median home price of $306,700, that comes to $61,340. That’s a lot of money! But if that amount is out of reach, don’t worry—most people put down less.
Once you’re are preparing to buy a home, it’s wise to not make any—we repeat, any—major changes in your life or, most important, your finances.Do not switch jobs. Do not buy a new car. Do not even buy furniture or apply for a new credit card, which could affect your credit. Just a credit pull alone from a car dealership or a furniture store is enough to affect your credit score and could cause you to lose your dream home.
Find a real estate agent
There’s no reason to go it alone—having an agent helping you can make the whole process much easier.“With limited homes on the market in the Trinity, Odessa and Palm Harbor areas, buyers need a Realtor that knows the local market and future development impact of the area.” says Debbie Dawson, Champions Re/Max of Trinity, FL.
Make a wish list
When preparing to buy a home, a wish list may be a very long one, but you need to be realistic about what elements are truly “wishes” and which ones are nonnegotiable—such as number of bedrooms, a fenced yard for a pet, a specific school district, etc. Sometimes it’s helpful to divide your list into three categories: Those nonnegotiable elements, followed by items that would be nice to have (e.g., a bonus room or home office) and your dream features (e.g., in-ground swimming pool).
Check out the hood
You’ve undoubtedly heard the adage “location, location, location.” What that essentially means is that you’re not just buying the property you’re looking at; you’re also buying into the whole neighborhood. That’s why you have to be certain that it has the vibe you want. Savvy home buyers know that the best way to find out more about the neighborhood is to meet the neighbors and then visit at various times of the day and night to see what it’s really like.
RE/MAX Champions of Trinity, Florida