Buying a home is a huge decision, and the process may seem intimidating, but it doesn’t have to be. I’ve broken down the homebuying process into five simple steps to help you get going.
Work On That Credit Score
Having a good credit score can save you hundreds of dollars each month. That’s because the higher your credit score is, the lower your interest rate can be. Your score is not based on how much money you have in the bank. Instead, it looks at how reliable you are when you borrow money.
The number of times you’ve been late on a payment and maxing out credit cards are two of the worst things you can do. You can’t go back in time, but you can make sure you make every payment on time from now on. You can also pay down your credit cards as much as possible.
It is essential to begin working with a lender before you hit the town looking for a home. Submitting the documentation needed to get approved for a loan early on in the process helps to speed things along once you find the house you’d like to purchase. It also shows the home seller you are a capable buyer, and working with you won’t be a waste of time.
Your lender will help you determine the monthly payment you’re comfortable with and show you what that number means in terms of purchase prices. They can also give you some ideas on how to raise your credit score beyond the simple steps I outlined above.
Decide Where You Want To Live
This seems obvious, and you’ve probably already done it, but figure out exactly where you want to live. Make sure that area has the amenities you are looking for like schools, close proximity to work, shopping, safety, etc. Then, make sure your budget will work in that area. This way, once you start looking for a home, you won’t be driving all over town and into areas you are unfamiliar with.
Monitor Interest Rates
Experts say that interest rates will rise next year, which means it will cost you more to borrow money. So, if you’re on the higher end of your budget, even a slight increase could push you over the edge and into a payment amount you cannot afford. So, keep an eye on things and be prepared to move a little faster than you may have planned.
Find A Realtor
There are thousands of Realtors out there, and some are better than others. Look for a Realtor who is familiar with the neighborhood you want to purchase in. Make sure they are active in and knowledgeable about today’s market. Lastly, make sure you get along with them. You’ll be spending a lot of time together during a stressful time, so it’s best to have someone by your side who you feel comfortable with.