Determine Your Financial Situation
Deciding to purchase a home is a big step, but doesn’t have to be a financial burden. Start by setting up a budget if you don’t already have one to determine how much you can comfortably afford for monthly mortgage payments. You can also utilize an online mortgage calculator to determine the price range for houses to look at before you even get started with house hunting!
Use a Buyer's Agent
Proper representation is an important factor when it comes to buying a home. You want someone by your side that knows the local marketplace to provide advice and help you negotiate offers. With a buyer’s agent, you are their number one priority. They will be actively searching for a home that fits your needs and will work to get you the lowest price possible.
Keep Your Credit in Check
In most cases, prospective buyers will need to secure a loan or mortgage when purchasing a home – meaning lenders will be checking your credit history! You want to ensure that you do not make any large purchases on credit, even if you have already been pre-approved through a specific lender. Prior to closing, there will be a final evaluation of your credit and financial situation – and if you just took out a loan to buy a car or made a large purchase on a credit card, the lender may not give you a final approval. It is also a good idea to obtain a free copy of your credit report to review the information for accuracy. If you see a discrepancy, you will have to clear up the issue with the credit bureaus.
Pre-Approved vs. Pre-Qualified
Be very wary of companies that say you they can “pre-qualify” you for a loan. This “pre-qualification” is based on limited information and ultimately does not hold much value. To receive a legitimate pre-approval, set up an appointment with a lender (such as a bank). After filling out the application and supplying any additional documentation, you will be given your maximum loan amount. You want to meet with a lender before you start your housing search so you know what price range to be looking for.