Purchasing a new home can be overwhelming, especially for first-time home buyers. Not only is it one of the most significant purchases of your life but the process can be quite demanding. Here are some necessary steps to help you navigate through the home buying process more smoothly and get the most out of the purchase.
💯 Your Credit Report Matters
Your credit score is a crucial factor to consider when it comes to qualifying for a loan. Your score is determined by things like payment history and the length of time you’ve had certain accounts open. It’s used to indicate how likely you are to repay your loan in a timely manner. Reviewing your credit report will give you a better understanding of your finances, and it can help you spot errors. If you find any mistakes that need to be corrected, or overdue accounts that need to be paid off, address these issues quickly. Having a healthy credit score puts you in a better position to secure financing on a new home.
💵 Adding to Savings
Even with a mortgage loan, you’ll need to have some money in savings to buy a home. Set up savings for your down payment and other necessary expenses like closing costs, maintenance costs, repairs, and moving expenses. Home buyers are advised to follow the 20% rule when saving for a down payment. Although you can start as low as 3.5 percent, it should be noted that interest rates are often lower with a higher down payment. The earlier you start saving for a down payment and other closing costs, the more prepared you will be when the time comes to start shopping for your dream home.
🙋🏼 Choosing the Right Real Estate Agent
Find an experienced real estate agent that can walk you through the process of acquiring your first home. Ask for referrals from people who have purchased homes recently. Meet with the potential agent and go through an interview process. You want to work with someone that has extensive knowledge of the local area and can help you save time in your search for a property. A real estate agent will find the available properties in your area through the Multiple Listing Service (MLS) and identify those that best meet your needs and wants.
📝 Get a Mortgage Pre-Approval
Before embarking on your home search, have an idea of how much a lender would be willing to give to purchase your first home. Getting pre-approved for a home loan will save you the frustration that could come later in the loan process and enable you to bargain with confidence. A mortgage lender will check your credit and verify your income and assets to ensure you purchase a home that is within your financial comfort zone. It is always best practice to work with a trusted local mortgage lender that can talk you through the most current rates and programs available for first-time home buyers.
📋 Create Your Wish List
Have an idea of what kind of neighborhood you want to live in and the style of house you prefer before beginning the hunt for your dream house. Maintain a wish list specifying the features you would like for your ideal home. These include basic amenities, bathroom/kitchen layout, appliances, home energy efficiency, etc. Separate the ‘must haves’ from the ‘nice to have’ and be ready to make some sacrifices as it is difficult to find a perfect house with all the features you want. Share this wish list with your real estate agent to help them pick just the right homes for you to see.
🏠 What to Expect During Your Home Search
Before closing on a deal, hire an appraiser to value your home based on the surrounding market and the condition of the home. Make sure the home is inspected so that you don’t find yourself in a situation where you need to spend extra on renovations or construction. A home inspector will make sure the home and its components and systems are in good condition. Additionally, remember to set some money aside to cover various fees that need to be paid before the close of the sale. These include legal costs, land transfer taxes, and disbursements. Talk to your real estate agent about how much you should have set aside for emergencies and after-move expenses, based on the type of home you are going to purchase.
Following these steps will go a long way in increasing your chances of having a smooth purchase and a continued positive experience with home ownership.
Your real estate agent is the best source of information about the local community and real estate topics. Give the Ashton Realty Group a call today at 860-306-0694 to learn more about local areas, discuss selling a house, or tour available homes for sale.