The home-buying process is extensive and can be overwhelming – especially for new homeowners, and even more so if you don’t do your homework.
If you’re in the market to buy in 2018, now’s the time to start preparing; and we’re here to help.
We interviewed two industry experts to help homebuyers prepare for a 2018 purchase. Movement Mortgage Loan Officer Leslie O’neal and Mirambell Realty Real Estate Agent Christopher Cazenave share their expertise:
The moment you decide to buy a house, work with a lender to get pre-approved for a mortgage loan. Knowing how much you qualify for will narrow down your options and help direct your search.
A word of caution, though: don’t overextend. Just because you qualify for a $250k loan, doesn’t mean your home should cost $250k. There are other expenses to consider, like interest payments, homeowners insurance and taxes.
Prioritize your Priorities
After you have an idea of how much you’d like to spend, decide on the lifestyle that suits you and your family. Consider factors like proximity to good schools, convenience to shopping and entertainment, how much land you’d like, and so forth. Deciding what’s most important to you will help further focus your search.
Most lenders require a down payment towards your mortgage loan, which could be up to 20%. If you don’t have enough money at your disposal, save for a bit longer or perhaps borrow against your IRA or retirement account (be sure to read the terms first, though!)
Despite how you come up with the deposit, be sure you can prove the source of the funds. Lenders won’t accept cash payments, and if your down payment was a gift from a generous giver, be prepared to provide a gift letter.
Count the Cost
You should also be prepared for other out-of-pocket expenses during the home buying process. You’ll need money for things like closing costs and home inspections before your close, and furniture, appliances and utilities afterwards. Do your homework to understand how much money you’ll be paying upfront and save accordingly.
Be extra careful with your credit during this process. Review your credit report and make sure there are no inaccuracies. Avoid opening new credit accounts and making major purchases. Several inquiries can negatively impact your credit score, which can impact your loan decision and your interest rate.
Enlist a Pro
When it comes to finding your dream home, don’t go at it alone. A qualified real estate agent is familiar with the ever-changing real estate market, can guide you through the process (including contract negotiations), and help you make a wise choice, considering your budget and lifestyle needs. They also share tips and tricks with you along the way to save you time and money.
Once you find the perfect home, you’ll be moving in a matter of weeks. Take time early in the process to get rid of items you don’t want to bring with you. For inspiration, read our list of creative ways to purge. Starting early will make it easier to pack when the time comes.
Take Some Time
The home-buying process doesn’t happen overnight. Carve out time in your schedule for conversations with your lender and realtor, home inspections, closing meetings, and so forth. As you get closer to your move date, consider taking time off work to pack, move, and get settled in your new place.
Get an early start and you’ll soon be enjoying new home in the New Year.