If you are currently in the market for your first home, you probably have a lot of questions. You are about to make an important decision for your future, a great investment of both money and time. Here are some tips that can help make your home buying process more successful.
Do Your Homework
The key step in buying a home is doing the proper research. Educate yourself on local schools, neighborhoods, and the kinds of homes available. By reading available materials and talking with experts, you can start to put together your idea of the perfect home.
Most decisions benefit greatly from proper planning and home buying is certainly no exception. Start a filing system with sections such as home buying, home financing and service providers. By forming a home buying plan you can more easily focus on the most important factors and help give structure to the entire process.
Get Pre-Approved or Pre-Qualified
Attaining the right mortgage is a key step in the home buying process, but it doesn’t have to be a stress-inducing one. Most lenders offer pre-approval and/or pre-qualification to help you know where you stand. Let me explain the difference between the two.
Pre-Approval: A written commitment from a lender to finance your home purchase up to a set amount. This indicates that the lender has taken a close look into your financial history and has agreed to lend you a specific amount of money, reliant on certain details like a finalized sales contract and professional inspection.
Pre-Qualification: A preliminary estimate of how much you can afford to pay for a home based on information you provide. Because credit and employment information aren’t validated for pre-qualification, it can only be considered a rough idea of a monthly mortgage payment and loan size. This can be a useful guide as you begin the home buying process.
Look For Value
When shopping for homes, it is important to consider potential value. Even if you are not planning to sell the home some time down the line, it is a good idea to consider the future value of the home. You may not think of a new home as a means to make money, but it is an important investment that requires caution.
Decide What You Are Looking For
Settle on the home features that are important to you (covered parking, hardwood floors, architectural style, etc.) and make an ordered list. Having well established guidelines will help narrow down your search and will prevent you from being shown properties that lack your key amenities.
You do not have to make an offer on the first home you see. Make sure to look at other listings in the area to get a feel for the marketplace. When you decide to make an offer on a house, consult with a real estate professional so that all of your questions are answered.