December 20th, 2019 9:19 AM by Jackie A. Graves
As everyone knows, a new home is not an impulse
purchase. You can't just waltz in and declare, "I'll take it!"
before you get to making that offer (on paper, through your real estate
agent)—and even before going to your first open house—there are a ton of things
to do and to prepare.
Here's a checklist of everything you need to do to get ready to buy a new home.
pass "Go," and do not start looking at real estate until you have checked your
credit score. This is the number that mortgage lenders will look at
to determine whether you are creditworthy, and will dictate the rate you will
be charged by the bank.
higher your credit score, the lower your interest rate—and that’s what you’re
going for. Get a free copy of yours at AnnualCreditReport.com to see where you
surprises on that report? Credit errors are more common than you might think,
so contact the credit bureau to correct any erroneous information.
Have credit that's less than stellar? Check out these (totally legit!) tricks to boost your
score fast and nab great rates.
that lenders love good credit scores, because they are an assurance of your
financial worth. If you walk into a meeting with a lender with a low score,
don't be surprised if you can't get the loan you'd like.
make sure you are clear on how much home you can afford. Check out our calculator, which will help you determine your monthly
mortgage payment, adjusting for variables such as the size of your down
payment, the type of mortgage you will qualify for, and current interest rates.
You can also get an official estimate by following our next tip.
prospective home buyer should make one of their earliest stops with a mortgage
originator, to see if they can qualify for a mortgage and confirm how much of a
mortgage they can afford,” says Steve Ujvagi, a
Realtor® with Keller Williams Realty Atlanta Partners.
mortgage shops offer a wide variety of rates and programs, so shop around to find the best rate and mortgage option for
you've found the mortgage that's right for you, you'll want to show the sellers
that you have what it takes to buy their home. In hot markets, a pre-approval is almost required for a seller to take
your offer seriously. That’s because it spells out exactly how much a lender
has agreed to loan you, assuring the seller that you’re both willing and able.
the best rates on real estate, you'll need to make at least a 20% down payment
on a home. With the current median home price of $306,700, that comes to
$61,340. That's a lot of money!
these smart ideas to help you save for a down
payment. But if that amount is out of reach, don't worry—most people put down less.
you're ramping up to buy a home, it's wise to not make any—we repeat, any—major changes in
your life or, most important, your finances.
switch jobs. Do not buy a new car. Do not even buy furniture or apply for a new
credit card, which could affect your credit," says Ujvagi. "Just
a credit pull alone from a car dealership or a furniture store is enough to
affect your credit score and could cause you to lose your dream home."
This is a
sensitive time for a buyer, so before you do anything, remember that you don't
want to mess things up with your credit score or your lender. If you do make a
wrong step, you may not be able to qualify for the home loan.
no reason to go it alone—having a real
estate agent helping you can make the whole process much
like these, with a limited number of homes on the market, a buyer needs a great
Realtor to make sure they find their dream home,” says Ujvagi.
are often a good place to start; check with family and friends. Here's more on
how to find a real
estate agent in your area.
course, this list may be a very long one, but you need to be realistic about
what elements are truly “wishes" and which ones are nonnegotiable—such as
the number of bedrooms, a fenced yard for a pet, a specific school
district, walking distance to the bus stop, etc.
it’s helpful to divide your list into three categories: those nonnegotiable
elements, followed by items that would be nice to have (e.g., a bonus room or
home office), and your dream features (e.g., in-ground swimming pool).
you are not likely to get everything on your checklist—but
hopefully, you'll get close!
If we do
say so ourselves, realtor.com is
a great place to start to figure out what properties are available in your area
in your price range. Buyers can search by price, number of bedrooms, location,
and other variables to start narrowing the options.
over online listings is one thing; seeing the properties in person is quite
another. Take advantage of open houses, as a low-stress way to visit several homes in one
strategy in advance, and while you’re in each home, take photos and notes so
they don’t all run together in your mind. (Now, which one had the in-room
undoubtedly heard the adage “location, location, location.” What that
essentially means is that you’re not just buying the property you’re looking
at; you’re also buying into the whole neighborhood.
why you have to be certain that it has the vibe you want. Savvy home buyers
know that the best way to find out more about the neighborhood is to meet the
neighbors and then visit at various times of the day and night to see what
it’s really like.
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