Buying your first home can seem like a daunting task. When you don’t know the steps to take, you can start your house hunting ill-prepared. There is a lot of preparation and research to be done before you buy a home, and doing this preparation can mean the difference between buying your home with an agreeable interest rate, or not buying one at all. All first-time home buyers should follow this guide to help them through the process:
- Improve Your Credit Rating
Before you think about house hunting, you need to make sure that your credit score is up to snuff. Keep up with credit card payments and don’t have too many lines of credit open. A poor credit rating can mean you get a loan with a high-interest rate or don’t get one at all. Improve your credit score before you start house hunting.
- Check Your Budget
Know how you spend, and know what you can afford. You want to know and be sure that you can make the mortgage repayments, instead of just assuming you can. Knowing your budget will also help you save for your down payment.
- Have a Down Payment Saved
If your parents or another guardian are paying for your down payment, ensure that the money is in your account for a long time before you search for a loan. If you have saved for the loan yourself, the bank statements will be apparent. Further, you should save, not only for the down payment, but for the closing costs as well.
- Get Pre-Approved for a Loan
Pre-qualifying for a mortgage loan can help you immensely when you are house hunting. You don’t want to go over your budget for any reason, and this includes being caught in a bidding war. Having a pre-approved loan can also help you negotiate.
- Choose A New House
There are many things to consider when buying a new house. Start with the neighborhood, then work your way from there. You need to make sure that the house you choose is both within your budget and suits your needs. Once you think you’ve found the one, get it inspected. You can use this inspection to help negotiate a fairer price.
- Get Homeowner’s Insurance
Finding insurance that works for both your needs and budget requires some shopping around. Like buying a new home, you want to know your options, and you want to get the best deal.
- Move In
The last step is the best one. You are a new homeowner! The house is yours to transform how you wish. If you are on a budget, keep upgrades small and do them over the course of your life. You can have the house of your dreams, you just need to have vision, savings, and time.
Buying a house is stressful for everyone. There is a lot of planning to be taken care of before you can even start house hunting, and finding the right place for you can take a lot of time. Be patient, do your work beforehand – you want to be sure of your choice and your ability to afford it.
