A home purchase is not something to jump into impulsively. If you haven't experienced home-buying before, preparation is key. Take a look at the below tips on what you should do before you ever attend that first open house.
Know How Much Home You Can Afford
You don't have to guess how much you should spend on a home. The old rule-of-thumb that says to spend about two and a half times your income for a home may not be an accurate way to know your price range. You can talk to a lender and get pre-qualified, however. Your credit won't be dinged and you don't have to submit any proof of income, but be careful about the information you provide so you can get some accurate pricing info in return. You will also need to add in the cost of homeowner's insurance, property taxes, and some savings for when something breaks down and you can't call your landlord to fix it.
Assemble Some Cash
Any down payment you have will buy you more home, improve your chances of being approved for a mortgage, and help keep your monthly payments at a manageable amount. Traditional loans may require 5% of the home's purchase price but not all loans require a down payment. You will also need cash for closing. Once you know how much home you can afford, ask your real estate agent to provide you with an estimate of closing costs. You will get a more accurate estimate with your purchase contract and then a few days prior to the big day.
Know What You Want
Sit down and make a list of everything you've always wanted in a home. Then, prioritize the items according to your wants and needs. You are not likely to find a home that checks every box, but having a priority list will help you make better buying decisions. For example, make a list of the top three to five non-negotiable things you need in a home. That might be a certain location, a minimum number of bedrooms, a minimum size, and so on. What remains should be things you want but don't have to have in order of importance.
Find a Real Estate Agent
As soon as you know you want to buy, talk to a real estate agent. They know how to get you started with all of the above and more. They know the area and can help you set your priorities based on what you can afford. Talk to an agent today to get help looking for a single-family home.
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