Regardless of how much you want to move, the last thing you want is to blow your savings and find yourself in debt. You also don’t want to be stuck with a mortgage for most of your life.
Therefore, as you hunt for the right home, invest a little time and do some research before buying your dream house.
If you follow these six things before settling in a new place, you’ll be one step closer to making your purchase successful.
1. Get Pre-Approved
Before you start your home search, get pre-approved for a mortgage. This is where lenders review your income, assets, and debt situation and determine how much you can afford to borrow.
The lender will also determine any mortgage programs available to you. Getting pre-approved will protect you from wasting time looking at properties that are beyond your reach.
If the seller is motivated to sell, they may lower the price if they feel that you can afford it.
2. Save for a Down Payment
After getting pre-approved, this is the most vital and initial step to buying a home. And as much as it needs you to be disciplined when it comes to saving some money, you will need to do some serious deliberations as to where to keep it. Your choice will depend on your timeline for buying your dream house.
When it comes to the amount of down payment you need, it is vital to note that the more cash you save, the smaller the loan you will need, and less interest will be paid. Besides, most lenders like to see a 20 percent down payment since it shows you have adequate cash flow.
3. Find a Realtor
Picking a realtor is one of the most critical and difficult decisions you’ll have to make when purchasing your dream home. A good agent can help you find the right place, negotiate the best price and ensure you don’t overpay.
A trusted realtor will help you prepare and review the necessary documents to complete the transaction.
They will also help you understand how much you can afford, what comparable homes have sold in your area, and how much of a down payment you need.
4. Review Your Credit Report
One of the most important assets to have is a strong credit report. Before you start hunting for your ideal home, find out where your credit stands. It can save you from a lot of hassle, anxiety, and money.
Be sure to review your credit report as it may have errors or problems that you need to resolve.
Checking your credit report is essential because it contains information about you that can be helpful when completing the loan application process.
5. Don’t Overlook the Neighborhood
When looking for your dream home, you can easily get caught up in the situation and check everything off your list, forgetting the neighborhood.
The setting could have been home to a thriving business community in the past, but now it sits abandoned. There may be too much crime in your potential neighborhood, unemployment, or even low-performing schools.
6. Inspect the Home
A home inspection is highly recommended when buying a home. You might find out that the house needs repair or maintenance.
You can also look for signs of neglect, such as missing screens in windows, peeling paint, and mold on the walls.
Inspecting the property yourself will give you a better idea of what the house needs to have repaired or maintained before an offer is accepted.
Summing Up
Buying your dream home can be expensive, but it doesn’t have to be that way. Review the six tips outlined above before making your purchase.
Factor in the price you will pay for your home and combine it with the monthly mortgage payment. You’ll want to know if you can afford it before you make a purchase.
