A Checklist for New Home Purchasing
Purchasing a new home is one of the most exciting times in a person’s life. It also is typically the largest purchase that you will ever make. This is not something that should be left to chance. In order to make the most out of the purchase and to have things go as smoothly as possible, you need to prepare in advance. The following checklist can help you with buying a home and keep you ahead of the curve when it comes to preparing for the closing day.
- Check Your Credit Score – Before you even think about buying a home, you should check out your credit score. You can do this on an annual basis without having any impact on the score when you are doing it for your own purposes. Doing so can alert you to any problems that might be on your credit report. You can then clean up those issues and have the score redone to see how much it went up. This can take some time, but you can also pay for a re-score that takes place quickly.
Another reason why you should know your credit score is that it makes you more comfortable with your ability to get accepted into a loan program. There is nothing quite as nerve-racking as sitting in front of the loan officer and waiting for a decision. Make sure the answer is yes first by checking your credit score.
- Consider Your Finances – One of the problems that many new homeowners face is that they get into a home that they are unable to afford. It is important for you to crunch the numbers in advance because it can be very frustrating to struggle from one month to the next to afford the mortgage. There are some online calculators that can help you to make the decision relatively easy.
If you find that you are unable to afford the mortgage associated with the home you are considering, there may be some things you can do to drop the mortgage price. This would include cleaning up your credit report to get a lower interest rate or shopping around for a better deal. You might also want to be cautious about variable rate mortgages because they can go up substantially when the interest rate goes up.
- Look for a Lender – Early in the process of looking for a home, you should be looking for a mortgage lender. There is nothing quite as frustrating as finding the perfect home and then realizing that you still have a lot of work ahead of you. Having a mortgage lender picked out in advance will help to cut back on the footwork and will help things to go a lot more smoothly in the process.
- Start Saving – One of the best ways to reduce the interest rate on your loan is to have a down payment of at least 20%. This can be a substantial chunk of money up front and it may take some time before you’re able to afford the down payment. You can still look at some properties with 3CRE during that time and keep your finger on the pulse of the market. Do what you can to save up the money until you are able to actually purchase the home.
For some people, 20% of a mortgage is going to be way outside of their reach. Although this may mean that you’re going to pay more in interest on the loan, it is not out of the question to come in with a lower down payment. In addition, there may be some programs for first-time homebuyers that can help you with the down payment as well.
- Get Preapproval – once you have reached this point in the process and you’re ready to actually go out and begin looking at homes, it’s important to have a preapproval for the mortgage. Although it certainly is possible to go look at homes without a preapproval, most sellers are not going to think you are serious if you don’t have one available. A preapproval lets the seller know exactly how much you can spend on the home because it shows how much the mortgage lender has agreed to provide you as a loan. Of course, you don’t need to take the maximum amount, but a preapproval can work to your benefit.
- Stop Spending – A problem that many future homebuyers experience is taking themselves out of the game by making a major purchase prior to the time that they get into the new home. It is important not to make any major financial changes, including switching jobs, buying an automobile or even applying for a credit card. It doesn’t matter what you do financially, it will have an impact on your credit score and it can even take you out of the running for a mortgage in some cases.
- Keep Looking – When you first start looking for a home, you may find what you consider to be the perfect property for your needs. It is important to remember the old axiom, look before you leap. Don’t simply buy a new piece of property or a home because it seems to be the perfect option; make sure it is the perfect option. Have the home inspected professionally to make sure that there aren’t any problems. You should also continue looking because there may be another perfect home that is just around the corner.
- Look around – It is important to continue looking when you are shopping for a home but even if you find the one that is right for you, take a drive around the neighborhood. It may be that there is something in the nearby area that would keep you from feeling comfortable in your home. It may also be inconvenient at certain times of the day because of traffic patterns.
These are a few of the things that you can do when looking for a home. They can go a long way in helping you to make the home of your dreams a reality.