1. Start saving
Many property virgins don’t realize the true out-of- pocket cost of buying a home. There is an earnest money deposit, a down-payment, closing costs, appraisal fee, Not only is there your down payment, but add closing costs, inspection fees and mortgage application fees. Now you’re looking at a whole different number. Ask your lender for an estimate of closing costs and what their application fee is. The important thing to know is how much money you’ll need, and how much you may need to save.
2. Check your credit report
The first step to purchasing a home is to decide how you will pay for the home. Will you make the purchase with cash or will you need financing. If financing, you will need to speak with a reputable Mortgage Lender to get pre-qualified. The Lender will eventually pull your credit report and score. It is a good idea for you to know what your credit score is before you get started and also to check the report for accuracy. The added bonus is that it’s free. You can access sites such as www.creditkarma.com or www.creditsesame.com.
3. Talk to a lender and get pre-qualified
If you do need financing, knowing how much you can afford is very important. Your Lender will let you know the maximum loan amount and also your maximum monthly payment. This way you will have a set budget and view houses that are affordable. Plus, you will need to submit your pre-qualification letter when you make an offer. Since you never know when the right house will come along, it’s best to have this done upfront.
4. Develop your wish list
Now that you have an idea of your price range, time to make your wish list. Write down everything that you would like in a home and then rank it from most important to least important. Ask yourself questions like: Is it important to have a garage?, do I want a fenced yard?, do I want a large kitchen?…..etc Most likely you will have to make some compromises when purchasing a home so if you know what is most important to you, it will make decisions easier.
5. Select your neighborhoods
When looking for a home, it is best to narrow down the search criteria as much as possible. You have written down your ‘wish list’ and decided what options are most important. The next step is to select specific cities and neighborhoods. Where do you want to live? Do you need to be near certain major roads? Do you need to be close to certain schools or facilities? Rank the locations from number 1, 2, 3…etc.
6. Set a timeline
Once you’ve done the above steps, it’s important to set a timeline for yourself. This can be based off a lease ending, saving money, or life changes like new job or marriage. Whatever your motivation, make sure you have a realistic timeline.
7. Schedule a meeting with Diana!
Your first time purchasing a home can be overwhelming. Diana is here to help make it as stress free as possible by guiding you through the process.