Purchasing a home can be fun and extremely rewarding, but you should always go in knowing what to expect from the process and from your Realtor. It may sound easy - find a house, pay some money and move in, but there’s definitely a few more intricate details left out in that plan. Let’s break down some helpful things to know before you jump all the way in.
Know the Process
As alluded to above, it’s important to know the process and know where you’re currently sitting from a financial standpoint before you go all in. Here is a glance at the home buying process - download below.
Know Where You Stand
If you don’t have yourself hooked up to a free credit monitoring service, I would highly suggest that you start there. You can assess your credit score, see where there could be areas of improvement, and see if there are any outstanding debts against you. It will paint a picture as to what you should rectify before you get too far down the road. In tandem with that task, start paying down your debt should you have any.
How Much Should You Save
This is especially important. Most people think all they need to pay is the down payment. While that’s included in the initial costs, it’s not the only one. You’ll need to save for your down payment, closing costs (may include home insurance, title insurance, appraisal fees, attorney fees, and taxes), inspection fees, option fee and earnest money. Granted, the earnest typically transfers towards your closing costs if you close on the home, but if you default on your purchase contract, it is considered non-refundable after a certain period of time.
Research and Watch the Market with a Realtor You Trust
Working with a realtor to help you watch the market is so important as it’s ALWAYS changing. It’s crucial to the process to get out there and look at homes so you can start building a list of what you’d like in a home versus what you don’t like. Also, when you’re looking at homes, don’t look only for your current needs, you should also consider your future needs as well. If you’ve never worked with a Realtor before, it can be intimidating. It’s best to find one that is reputable and will truly listen to your wants and needs.
Get Pre-Approved for a Loan
Speaking with a lender will help you define your exact affordability as well as mortgage products they can offer you. A pre-approval letter has so many benefits when it comes to setting realistic goals and strengthening your offer. Read more about why you should obtain a pre-approval letter or watch how you can obtain your pre-approval letter.
This is one of the biggest investments of your life, so it’s imperative that you understand the steps of the process and how to best position yourself in the market. Even if you’re not looking to buy right now, I’m always here to help and to be a resource for you. There is no such thing as a silly question!