Thinking of finally putting down roots and buying your first home? Then it’s time to make a plan! Below are a few tips to consider before you get started. Equal Housing Lender.
- Save for a downpayment… and beyond. If your dream is to eventually own a home, the time to start saving was yesterday! Remember that you’ll need more than just your down payment. You want to make sure you have enough left over for moving costs, necessary renovations, your regular emergency fund and regular life expenses.
Evaluate your finances, set a budget and make sure you can truly afford all the costs that come with homeownership.
- Look at ways to improve your credit score. To qualify for a mortgage loan, you’ll need a solid credit score. Start improving your score and building a healthy credit history NOW by:
- Keeping balances low on your credit cards
- Setting up automatic bill payments to make sure your bills get paid on time
- Not closing old, paid off accounts
- Only opening new credit accounts if absolutely necessary
- Do some research and evaluate interest rates. Rates should always be a consideration when mortgage shopping because the higher the rate, the higher your monthly mortgage payment.
If you’re not happy with the current rates, don’t worry! Historically, they tend to move up and down - and once the market is more stable, you can consider refinancing to bring down your rate and your monthly payment.
- Get preapproved for a loan. Once you’ve found a mortgage lender with the rate you want, you can get preapproved. This will help you by providing an estimate of how much you’re able to spend on your home and also helps prospective sellers know you’re serious about buying.
- Find a trusted real estate agent. A great real estate agent can guide you through every step of the process of homebuying – including what to do after your offer is accepted. Ask your friends and family for recommendations or look at online reviews to help find the right fit!
- Research neighborhoods. Before you start looking for homes in earnest, go online and research neighborhoods in your city. You can learn about school districts, crime rates, the nearest amenities and average home prices in the area. You can also physically drive around the neighborhood and even talk to neighbors to see what it’s like to live there!
- Make a list of wants and needs when it comes to a home. Having a list ready to discuss with your real estate agent will help you narrow down your search right away! What are you willing to compromise on? Think about things like size of the house, number of rooms, whether it has a basement, etc.
