If you’re thinking about buying a house, it’s important to recognize that this isn’t something that can be done spontaneously. This is a process that takes a great deal of planning to ensure you can realistically afford the real estate you want to buy. A large part of the blame for the 2010 bursting of the housing bubble is that buyers weren’t properly planning for their home purchases. Fortunately, there’s more information available online today, making it easier for you to get ready for your home search.
Determine How Much House You Can Afford
Your first step in preparing for a home purchase is to determine how much you can afford. A common mistake is to look at what you’re currently paying in rent and use that as the amount you can afford to pay out on a mortgage each month. Keep in mind that you’ll also have to put money away each month for homeowner’s insurance, property taxes, and home repairs. If your current landlord also pays utilities, be sure to figure those extra costs into the equation as well.
Rebuild Your Credit
Even if you have decent credit, it can only help you to boost your score by a few more points. This is because a higher credit score will help you lock in a lower interest rate on your mortgage. As soon as you know that you’re going to want to buy real estate shortly, start making a plan to pay down your credit card debt. You should also make sure all of your monthly bills are paid on time. One missed or late payment can adversely affect your credit score. If you don’t have credit cards, getting a secured card will help you build credit a little faster.
Start Your Savings
You should start saving money for your home purchase as soon as possible as well. Even though there are government programs that allow you to buy with a zero or low down payment, you should be aware that putting less money down upfront will force you to finance a larger portion of the home purchase. You’ll also need money for the closing costs, which typically come to 2-5% of the home purchase amount. Be sure you save extra for move-in expenses, such as buying window coverings and making minor repairs.
Get Pre-Approved For a Mortgage
Getting pre-approved for your River City mortgage is going to help you in a couple of different ways. First, it’s going to give you a definitive limit on how much you can spend. This will help you save time by limiting your search to homes within your price range. Secondly, your pre-approval letter will let your real estate agent and any sellers know that you’re a serious buyer. A seller will be more willing to entertain a bid from a pre-approved buyer because they know that buyer is already prepared to go through with the purchase.
Start Your Search With a Realtor
Once you are pre-approved, you’re ready to start your search. While you don’t necessarily have to work with a real estate agent, doing so can expedite your search. Since the agent earns a commission on the home you buy, you won’t have to worry about paying upfront fees. In exchange for their commission, they can alert you to open houses and new properties that are about to be listed. Their expertise in real estate will help you find homes that match your criteria.
Even with the help of a real estate agent, finding your ideal home can be complicated. You’ll have to think about your family’s future needs in addition to meeting the needs you have at present. If you can buy a home with room to grow, you may not have to go through this process again for many years to come.
