5 Things To Do Before Buying A Home
The process of buying a home can be somewhat daunting when you think about all the steps, requirements, and paperwork involved. On top of that, buying a home is one of the largest purchases you can make, which can be a bit scary. To help you sort through the mental chaos that can accompany this type of transaction, we’re sharing 5 things to do before making the leap to being a homeowner.
1. Analyze Your Financial Health
Before rushing into a 15-30 year commitment, you should definitely step back and make sure now is the right time for you to buy a home. It’s easy to get caught up in societal pressures and make decisions based on what friends or family members are doing, or think you should be doing. At the end of the day though, you’ll be the person responsible for the mortgage, so you want to make sure that now really is the right time for you.
When reviewing your financial health, you’ll want to look at the following:
Your savings - Ideally you want to have 3-6 months of living expenses saved up, plus money for closing costs.
Your Spending - You’ll want to have a solid grip on how much money you spend on a monthly basis. Be sure to calculate things like utilities, food, car maintenance and payments, student loans, clothing, kids’ activities, credit card payments and other loans, entertainment, retirement savings, etc. Auditing your monthly expenses will help you realize if adding the expense of home ownership is doable.
Your Job Security - Did you just start a new job? Are you happy with your current employment situation? These are questions that matter, because making any rash changes with your employment can gravely impact your financing options for a home. Also, if you’re miserable at your current job and don’t see yourself staying there much longer- it might not be the best time to commit to a home loan.
2. Have an Idea of What You Want
Having an idea of what kind of home and features you’re wanting is a good measure to take before you get deeper into the home buying process. Identify the style of homes you’re willing to invest in, and which types are off the table. Consider the differences between single-family homes, condos, townhomes, and mobiles homes, to assess if they would be a fit for your needs.
Then, make a list of features that you’re wanting in your new home, and rank them from can’t live without, down to the least important. Having your preferences already listed out and knowing what will and won’t work for your needs, will be beneficial once you get a realtor involved.
3. Get Pre-Approved
In order to get pre-approved for a home loan, you’ll need to find the right lender first. This is something you’ll want to shop around for, as some lenders may offer lower interest rates, quicker closing times, or more loan options that fit your needs. Once you find the right lender for you, you’ll want to get pre-approved for your home loan.
The process to get a pre-approval will let you know if there are any issues with your credit or current financial situation. If there are any obstacles, you’ll have the opportunity to work with a credit analyst to get your financials in order. Once you’re pre-approved, you have a shopping budget for your home, plus your pre-approval letter will let sellers know you’re serious.
4. Determine How Much House You Can Actually Afford
Just because your lender approved you for a certain amount of funds, doesn’t mean you have to spend that much. You’ll want to consider the monthly expenses of your new home- including the monthly payment, homeowner’s insurance, taxes, and any improvements or repairs you’ll be making. Now factor that into your other monthly expenses (from step 1) and make sure you’re not leaving yourself financially strapped each month.
5. Find a Realtor
Now it’s time to find the right realtor for you. This is also not someone you want to just randomly choose. Having the right agent for your needs can make a world of difference in the home-buying process. Do your research, ask questions, and consider referrals from family and friends who have had positive experiences with their realtors.
You definitely don’t want to navigate the home-buying process alone. Having an experienced realtor will lessen the stress, make the experience more enjoyable, and can protect you from any unforeseen legal matters. Real estate agents have access to MLS listings, they know how to properly negotiate to get you the best price, and they understand the legal jargon of complex transactions.
Schedule a Free Consultation With Vergara Realty Group
If you’re ready to move forward with purchasing a home, feel free to contact our office to set up a free consultation. Call 254-652-4744 or email us at pedro@vergararealygroup.com
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