As with anything associated with your finances, it’s good to start out with a plan. Being prepared when purchasing a new home could save you thousands of dollars in additional costs as well as plenty of headaches. Take a look at this home buying checklist before you sign on the dotted line.
What’s Your Credit Situation?
For most of us, we’ll need a home loan from a bank to assists us in our home purchase. To get approved and to get the best possible mortgage rates, it’s necessary to clean up your credit as best as you can and get that high credit score.
Get a free copy of your credit report and make sure everything is correct. If your credit is a mess, you might be better off waiting 6-12 months while you get things in order. Sure, waiting is a bummer, but think of the possible thousands that you’ll save with a better mortgage rate.
Shop for a House That You Can Afford
The first mistake people tend to make when looking for a house is shopping above their price range. We’re not all celebrities. We’re not all millionaires. We’re not all making six figures a year. And that’s okay. But we need to shop for houses that fall within our price range and budget. Don’t buy a house to impress your friends or the people on your block.
Be Budget Minded
I hate those billboard signs that say you can buy a home for what you’re paying in rent. There are more costs associated with a home purchase than just the mortgage payment. The best time to work on your new-home budget is before you purchase.
Yes, you might have the monthly income to afford a mortgage payment, but do you have enough left over to pay for things like property taxes? Home owners association fees? Insurance? Lawn care? Home repairs? These are some of the things you don’t necessarily think about when renting.
Getting pre-approved from a bank will help you in your efforts to shop within your budget and help you make a serious offer when you find the house of your dreams. Pre-approval is not the same thing as pre-qualified.
Being pre-qualified is based on a brief overview of your financial situation. Pre-approval comes from an actual lender after a careful credit history, income, and debt analysis has been completed.
Cover Your Bases
Remember, one thing that comes with adulthood is that you are responsible for you. Take the time to prepare yourself before you jump into the deep end of home buying.
Seek help from professionals, hire inspectors to examine every square inch of the home before you bid, and look for homes in good school districts. With a little foot work and some study time, finding your dream home won’t turn into a nightmare.
Photo By Steve Snodgrass