Becoming a homeowner is not as easy as 1…2…3. As much as real estate professionals aim to ease the burden on buyers, we get it. The process can be confusing, complicated, and sometimes frustrating.
Before viewing homes or even connecting with a real estate agent, there are some steps you should take to ensure your purchasing journey goes as smooth as possible and to help avoid disappointment. Your first home purchase can often be your most challenging, but we are here to be your guide.
Here are our top five tips for first-time homebuyers.
- Know what’s on your credit report.
- With so many online platforms making getting a copy of your credit report easy, you should know what’s on it before a financial institution pulls your report. This is your opportunity to be proactive about your credit. Does an unexpected inquiry or overdue account appear? Reach out to these credit agencies to see how you can correct any errors.
- Even if purchasing a home is still years away, get on top of your credit. A high credit score and a clean report will help you get the best interest rate.
- Pay off high-interest credit debt.
- If you have the spare cash but haven’t paid down high-interest credit cards or personal loans, now is the best time to do so. This monthly payment can significantly impact the mortgage amount you can qualify for. A $300 a month payment may not seem like much to you now, but it could impact your overall property budget by thousands.
- Understand the extra (hidden) costs that come with homeownership.
- The costs of owning a home are more than just your monthly mortgage payment and utilities; these additional costs aren’t discussed enough, so it’s not uncommon for first-time buyers to be unprepared. In addition to your mortgage and utilities, you’ll have property taxes, insurance, repair costs, and possibly Home Owners Association costs. Therefore, it’s essential that you include them in your budgeting.
- Research loan programs like FHA and VA loans.
- These government programs enable qualified borrowers to purchase homes with little to no money down and can offer far more attractive interest rates. These programs are government designed to make homeownership more accessible.
- Get pre-approved.
Getting pre-approved for a mortgage means having your finances reviewed and initially approved for a loan amount. The pre-approval process is necessary for buyers because it provides a concrete understanding of their budget. Still, perhaps, more importantly, it means that they are ready to make an offer when they find the right property.
Your real estate agent will likely ask to see a copy of your pre-approval letter before they start taking you through properties. In today’s market, offers made without an accompanying pre-approval are unlikely to be accepted, so save yourself the heartache and begin the pre-approval process right away.
If you’re ready to start your home buying journey but need guidance on loan programs or how to get pre-approved, schedule a no-obligation call with The Simpson Team now. We’ll take you through the process and help you secure the property you have been dreaming of.