Have you been thinking about buying a home? People make this life-changing decision for many different reasons. Whether you are looking to buy a new home that’s big enough to raise a new family or you’re looking to downsize, these tips will help make the whole process easier.
Here are six things you should do before buying a home:
1. Get an idea of what you like and what you dislike
Before buying a home, you should research the features you would want and wouldn’t want in your future home. This includes what style of home you want, whether it is a condominium or a single-family home, and where you would like it to be located. Understanding these factors will help narrow down your options, and then you’ll be able to get more serious about your search. In addition, downloading different real estate apps such as, Realtor.com and Zillow will allow you to see what homes are available in your market and at your price range.
2. Budget
Buying a home is a substantial financial commitment, and in most cases, it is the largest purchase you’ll ever make. Even though a lender will evaluate all your finances, you should look everything over for yourself in advance. Making sure you are financially prepared is critical before you purchase a home. Luckily for you, there are many tools that can help you determine if you are financially capable of buying a home. For example, you can use a mortgage calculator to calculate your monthly payment based on the sale price, interest rate, and other expenses.
*TIP: When you decide how much you can afford to pay for a home, don’t forget about the extra expenses that may arise, like utilities, taxes, and insurance.
3. Keep track of your credit score
Lenders will look at your credit score to get insight into any debts you may have and see if you are paying your bills on time. Your credit score is calculated by looking at your past credit history. Different types of loans all factor into this calculation, such as past and present mortgages, credit cards, car loans, and student loans. The credit report also reflects past debts, foreclosures, bankruptcies, and any missed or late payments. The best way to be sure there aren’t any inaccuracies on your credit report is to look over your credit report at least once a year. You can check your credit score for free every year by going to AnnualCreditReport.com.
4. Take advantage of MEP’s fully underwritten pre-approval
MEP’S fully underwritten pre-approval is a complete review of all your income, assets, and credit. Your loan officer can pre-approve you for a loan even without a property address. Submit a complete application with all required documentation. You can receive a conditional loan commitment from an underwriter subject to the title review and property appraisal when you find the home you want to buy. Taking advantage of this will help save time and money for all parties involved in the transaction.
Having a solid pre-approval provides many benefits such as:
- It is stronger than a pre-qualification
- It brings you one step closer to full mortgage approval
- There is no cost to the borrower
- You will have conditional loan approval before finding a property
- Your financed offer is now equivalent to a cash offer
- Your pre-approval is valid for more than one property until your offer is accepted
5. Contact a real-estate agent
Once you have a pre-approval letter, you are ready to meet with a real-estate agent. A realtor is an excellent resource for housing information, and they can help guide you through the process. They can show you what types of properties are available in any area you have been considering. The information they provide will help further your research. Then, when it comes time to make an offer on a property, their expertise is invaluable.
6. Understand the benefits of a home inspection
A home inspection is optional, but unless you are willing to release the seller from responsibility should you later find problems, you should not waive it. An inspector will look for issues with the sewer, septic, electric, and other important structural elements of the house. Inspectors are trained in what signs to look for, determining if there are issues the average person might not detect. In addition, a home inspection can help protect you from expenses down the road.
Deciding to buy a home is a huge decision, but the process will go quickly and efficiently if you are well prepared. Mortgage Equity Partners’ experienced loan officers are always here to help guide you in the right direction and make your dream of owning a home a reality. Contact us today to get started.
