Buying your first home can be nerve-racking. As a first-time homebuyer, you will navigate a process that might include uncertainty, excitement, confusion and frustration.
But preparation and knowledge can help you stay on the right track. Here are seven steps that can improve your chances of having a good homebuying experience.
GET PRE-APPROVED FOR A MORTGAGE
Homebuying does not begin with home searching – unless you are sitting on a pile of cash and won’t need a mortgage. Otherwise, make sure you get a pre-approval from a lender before you even begin hunting for a home.
And make sure it’s a true pre-approval and not just a pre-qualification. Some lenders will tell you that you pre-qualify for the loan based on the income and credit information you have provided. That’s not good enough for most sellers today.
With a real pre-approval, the lender will verify your income documentation and not just check your credit.
DETERMINE A BUDGET AND STICK TO IT
Don’t wait until you are shopping for a house to find out how much home you can afford.
Determine your budget and the monthly payments you can afford and qualify for early in the process.
Most importantly, stick to the plan.
Remember that it’s not just about the mortgage payments. Also consider the costs of your property taxes and homeowners insurance.
HAVE GOOD ADVICE
Buying a home for the first time is supposed to be fun, but it’s actually hard work, and at some point during this process you will feel overwhelmed. You’ll need to be surrounded by professionals who know what they are doing so they can guide you and provide answers to your questions.
Find an experienced real estate agent, a reputable mortgage professional and a real estate lawyer if you can.
TIME THE END OF YOUR LEASE
How long will it take to find the home I love? When will I close? When will I move in? Until you actually sign a contract to buy your first home, these questions will remain unanswered.
Still, you have to do your best to time your closing and moving with the end of your lease.
As you begin your search for a home, revisit your lease agreement. See when the lease expires, learn about penalties for breaking the lease in case it comes to that and find out the options that are available, in case you need a lease extension. AAP