Purchasing a home can be exciting but also stressful because you're spending a good chunk of money in a down payment and monthly mortgage. If you want to make sure that you're getting the best deal for your money, follow these steps to prepare for your first house purchase.
Check your credit.
Lenders want to know how good you are with managing money, so they check both your credit report and your credit score. While many services will give you the financial details for a fee, you can also obtain them for free. First, check with your credit card or bank, which may offer these documents as part of their customer service. If not, go to annualcreditreport.com to get a copy of your credit report and then browse Credit Karma for information on your credit score. Be sure to read the information in your credit report carefully. If you find any errors, tell the merchant who reported the information as well as the credit agency that compiled it, so that they can correct the mistake.
Determine what you can afford.
Unless you are paying the full cash price for a home, you'll need to get a loan. Utilize professionals and gain as much information as you can. You’ll need to figure out what your monthly mortgage payments will be based on the given price of the home, down payment, interest rate, and mortgage length in years. You can then limit your search to properties that fall within your mortgage range.
Pre-approval is a process that allows a lender look at your credit report, bank statements, federal returns and pay stubs to determine how much it would be willing to lend you. You then receive a pre-approval letter that you can use as a negotiating tool with home sellers. According to the Home Mortgage Disclosure Act, less than 10 percent of buyers get pre-approvals, so having one increases your chances of getting the house that you want.
Hire a real estate agent.
You want to a professional real estate agent on your side for several reasons. She can grant you access the properties that have yet to appear on any kind of a public list. She can point out the pros and cons of a home, and negotiate the best price for the money that you have to offer. Finally, she can ensure that all the complicated rules, regulations, laws and paperwork are completed correctly and efficiently, so that you're able to own the home of your dreams.
Your first home may be your permanent abode for the rest of your life or a stepping stone to a bigger place later on. Either way, you'll be living with the results of your efforts for a long time. Following these tips can ensure that you get the most for your money in an investment that increases in value over time.
About the author: Meghan Belnap is a freelance writer who enjoys spending time with her family. She loves being in the outdoors and exploring new opportunities whenever they arise. Meghan suggests using a mortgage calculator like the one offered by Cast Line Properties LLC to help with the budget process. Meghan finds happiness in researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure.