Looking for what steps you need to take in order to prepare to buy a house? If you’re looking to put your rental days behind you and move into a home you can finally call your own. Now’s the time to start planning. Even if you don’t think that you’ll be ready in six months or a year from now, there are things you can do to prepare yourself and your family. Crossing the following items off your list will make the home-buying process a little bit easier. Read on for a couple of tips you can get started on right away.
Prepare To Buy A House With These Tips
Getting ready to buy your first house can feel a little bit overwhelming. From credit scores to down payments, mortgages, and more, there is a lot to process. So here’s a brief guide to help you get ready to make one of the most significant purchases of your life. Prepare to buy a house with these easy tips.
Check Your Credit & Start Saving
A good credit score is one of the first things mortgage lenders look for when you’re considering buying a home. It proves that you’ve got a good track record at paying off past debts like student loans and credit card bills. The higher your credit score, the easier it is to qualify for lower interest rates and help make your home more affordable.
Several credit reporting agencies are available online, and many of them will keep you a free copy from all three credit reporting bureaus: TransUnion, Equifax, and Experian. Many of these sites will also give you ways to help you improve your credit and give you an overview of why you have the score you have.
Having cash reserves is also essential for buying a home, as you need to prove to a lender that you can afford housing payments, even payments that might be higher than your current rental rates. This means that you should start saving now! In addition, you’ll need to prepare for a down payment, inspections fees, and maybe more.
Get Your Documents In Order & Talk To A Mortgage Lender
If you’re close to putting an offer on a house, you’ll want to start collecting documents that verify your finances. This includes paystubs, W-2’s, bank statements, and even copies of tax returns. Too often, homebuyers don’t consider mortgage shopping until it’s too late, and someone else buys their dream home who had their finances in better order. A mortgage pre-qualification and mortgage pre-approval can help you with the buying process. Though these two steps sound very similar, they are, in fact, quite different.
A pre-qualification is a preliminary step in providing the mortgage lender with just some basic information about your finances online. Though it isn’t verified, it can be used to determine whether you might qualify for financing. On the other hand, a pre-approval involves submitting an actual mortgage application and providing your lender with supporting documentation. This usually includes tax returns, paycheck stubs, financial statements, a credit check, and more.
Getting pre-approved is the most crucial step before even starting before house-hunting. Some Realtors and sellers will only work with pre-approved buyers.
Mortgage lenders will review all of your information and determine how much you can afford to spend on a property. Though a pre-approval doesn’t 100% guarantee financing, it does go a long way to making it happen. A pre-approval tells you what you will be able to afford before searching for a home – which makes it a significant step.
Find A Real Estate Agent
Though buying a home can be complicated and even intimidating, it gets much easier when you have a professional on your side to answer questions and look out for your best interests. A buyer’s agent can help you find the right house, give you negotiation advice, and get you a reasonable price for your future home.
Don’t rely on the seller’s agent to provide advice and guidance, as it’s their job to help the seller, not the buyer. Though we’d love for you to consider our team at 41 Realty Group, you should always get recommendations from your friends and family. In addition, read online reviews, talk to a few agents, and get advice from other people who have bought a home recently before making a final decision.
Make Sure You Have Earnest Money Ready To Go
As we mentioned before, it’s good to have cash reserves on hand when trying to prepare to buy a house. Once you find that perfect property, you’ll be required to submit an earnest money check with your offer. Earnest money is basically good faith money that says, “I’m a serious buyer.”
Though the actual amounts vary from house to house, they typically range from 1% to 2% of the purchase price – usually a minimum of $1,000. Of course, the seller doesn’t get this money; to be clear, funds are held in an escrow account and are either returned to you at closing or applied to either closing costs and/or your down payment.
Final Thoughts To Prepare To Buy A House
We know that buying a house is a huge decision. But, even in this market, where it feels like there aren’t a lot of homes on the market, you shouldn’t rush. Don’t act too quickly or skip vital steps like a home inspection or getting preapproved. At 41 Realty Group, we want you to find the home of your dream at the price you can afford. So let us help you prepare to buy a house and get all of your real estate questions answered. We’ll help you find the right mortgage lender, help you with the paperwork, and of course, walk you through every step of the process. Get in touch with us here.