Home buying is a complicated process. Sometimes you get lost in the mirage of processes involved. Hence it is important to approach your quest for a new home with purpose and direction in order to save time, money and unnecessary hassles. Before looking around at homes for sale, you need to do these six things to remove the ambiguity from the home buying process:
1. Carefully check your credit.
This means you need to request a credit report from at least two credit reporting institutions. For example, one from Experian and one from Equifax or Transunion. In that way, you offset any mistakes made by one with the other. Credit reports by any of these three institutions are usually free once a year. Most mortgage lenders will require a score of at least 550. Having a higher score qualifies you for a lower interest rate on your mortgage.
2. Consult with a mortgage broker.
You should seek out a trusted mortgage broker. You can ask for referrals from your friends, associates or relatives. You can also ask for recommendations from a trusted real estate agent. Your goal shouldn’t be to get pre-qualified but make sure you’re pre-approved for mortgage. Getting a pre-approval will make your home search easier. You’ll get information as to the price of real estate that is affordable to you and the type and price ranges of houses you should look at.
3. Know what you can carry.
For a loan that stays with you for 20-30 years, you should not have to rely on assumptions. Because you qualify does not mean you will be comfortable carrying a certain amount each month. Assess your options and select a loan that will be comfortable for you.
4. Know your needs and desires.
How many rooms do you need? How many bedrooms, bathrooms, etc? Is it going to be a starter home, or one to stay in for a long time? Differentiate between what you need and what you want, and understand you will never find a perfect home! Overlook colors of the walls and doors, because you can and most probably will change them. Do not be swayed by staging!
5. Hire the real estate agent for you.
Interview real estate professionals and ask about what they will do, how they will negotiate, if your relationship will be one of a client or a customer, etc. Many factors go into that decision, but it’s how you communicate with the realtor that is most impactful!
6. Set Realistic Expectations.
Do not look at million dollar homes, if you can afford a $750,000 one! If you have realistic expectations and know what you can afford, want and need, the journey will be easier. The better prepared you are, the easier the house - hunting project becomes!