You’ve decided you’re ready to start your home search and buy a new pad. Exciting, right? But before you start a weekly ritual of attending open houses, there are a few things about the home buying process you should be aware of. Here are five things you need to do to get ready to buy a house.
If you’re on a tight budget, prepare yourself for swallowing the hard truth that you may not find all of the features you want in potential homes. If you are not willing to compromise, you may be looking for a house for a long time. While this puts a damper on your plans for finding the perfect home, you will be assured that you can afford the monthly payment.
Sometimes the homes for sale do not meet every expectation that you have. For example, if you want a house a short drive from the lake, you may find that they are too far from your job. If you want a condo with a plethora of amenities, you may discover that the condo fees are sky high. When it comes time to view homes, you may find that your needs will change depending on what is available in your budget.
Check Your Finances
Before you speak with a lender about getting a loan, you need to have your finances in order. Banks and other lending companies will look to see if you are financially able to pay back the loan. They will look at your credit score and employment history. Collect records such as tax returns and pay stubs to make the application process smoother. If you have any concerns such as a low credit score or late payments on debts, be sure to resolve those first.
Figure Out the True Cost of Buying
Buying a house is one of the largest investments you can make. Before jumping into this financial responsibility, you need to make sure you can make the monthly payments. The mortgage is just one part of the monthly payment. You will need to account for other fees such as home insurance and property taxes. Utilities and home repairs also need to be accounted for in the monthly budget. If you are getting a traditional mortgage, you will need to pay a percentage of the mortgage before closing, as well as having enough money to pay for closing costs and inspections.
Note Wants vs. Needs
Before you start looking for a house, create a list of the things you need in a home versus the things you want. For example, having a shorter commute to work may be more important to you than having a fenced backyard. When it comes time to start house-hunting, you will have your priorities in order.
Whether you are buying a home for the first time or you are moving to a new location, it is important to be prepared. The house-buying process is pricey and can take a long time if issues pop up. You can make the process smoother by handling your finances and being open to different types of homes.