The decision to buy a home can be one of the biggest investments in your lifetime. It can feel overwhelming or nerve wracking. Or perhaps you have purchased before, but it has been a long time. Either way, there are some basics that you should know before you sign on the dotted line.
First, get your "house" in order. What is your credit score? It goes without saying that the higher the score, the better the rates available to you. If your credit score is in need of repair, take the necessary steps to strengthen it. There are many free ways to get your credit score such as going directly to the credit bureaus. Once you have a copy of your credit report find someone you trust to help give you guidance. A good real estate agent can often tap into their network and refer you to some places that can assist you in this area.
Second - this is a big one - what can you actually afford? If what you can truly afford is in the $100,000 range and you run off to an open house for a $300,000 home you are going to have a hard time stepping backward to your price range. Also, keep in mind that you will have your regular monthly expenses plus property taxes and insurance. You will also want to build in a budget category for upkeep and maintenance plus those all important upgrades that come with owning your own home. There will be times you will want to spend money on your landscaping and lighting, kitchen upgrades, etc.
There are several online mortgage calculators but be wary - many times these are attached to a mortgage site that exists to sell you a product. A realtor can help with this process. And although they too, in essence, are trying to sell you something they also understand that the lead time between getting ready to purchase and the actual purchase can be lengthy. The real estate agents also should be looking at houses in your price range. A good real estate agent has a vested interest in putting you in a house that makes sense for your long-term budget for several reasons - one for repeat business and two to tap into referrals of your friends and family. And more importantly, they want you to be happy with your purchase and feel comfortable with the process. It is, after all, a huge commitment!
Now that you know how much you can afford, it is time for the third step of preparing your nest egg. You will need to figure up an estimate of things like down payments, and closing cost - these are things that a real estate agent will know about your particular market. When you are considering the jump to purchasing a house, it can be tempting to jump right in once you have enough for a down payment - thinking that you will figure the rest out as it comes along. Although it is an exciting time in your life, it is important to wait until you have some additional savings built up to help you with the "what ifs" that pop up in life.
And finally, after you have strengthened your credit, decided what you can realistically afford, and prepared your nest egg it's time to get a preapproval letter from your choice of lenders! This is another significant opportunity to do your homework and shop around. It may be that your bank has the best rates available, but you owe it to yourself to see what is out there. While shopping around you can decide on a bank that you would like to work with that offers you competitive rates - or you may choose to go with a mortgage broker.
If it sounds like a lot - it can be. However, if you decide to go with a real estate agent, they can help guide you through the process so you don't have to go at it alone! You'll be glad to have experience on your side while making such a huge commitment. For more information about how our qualified agents at Capital Ventures Real Estate can help you make your dream a reality contact us today!