You have decided you want to buy a home. Now what? If you have been looking at all, you see that homes come on the market and sell right away! So what to do to help you buy a home in this market? The key is preparation!!
When are you planning to buy? If you are in the early stages, it may help you! Here are four steps if you have time:
- Check your credit
- Figure out your debt to income ratios
- Save money
- Figure out your budget
One of the most important things you can do is check your credit. I have had a couple clients lately that were surprised by information on their credit report. For two clients, it delayed when they could buy. So my suggestion is talk to a loan officer and have them check your credit. If you think things are ok, even looking online at Credit Karma or Annual Credit Report.com will help. That way you can see if there are any late payments that have been reported in error or any other issues you may not know about.
Think about what you are comfortable spending in a home. Look at your income and debt and set a budget. Many times I have clients come in and they are ready to buy but haven’t really thought about a comfort level in a house payment. Remember you will have utilities and other costs of owning a home to consider. You will want to set up a savings account for maintenance – when you own a home you are responsible for the maintenance. Once you know those numbers, it will help you figure out what you can spend on a new home.
While you are preparing to buy, save money! If you are living at home, pretend you are making a house payment and put that money into savings. If you are renting and the new payment will be more than your rent, try to put aside the extra money. It helps you get ready for the higher house payment and also gives you extra money in savings when it’s time to buy!
Are you ready to buy now? Here are some things to do to help you now:
- Research loan programs
- Get preapproved for your mortgage
- Find a realtor
- Be prepared to put down an earnest money deposit on your new home
Your loan officer will discuss different loan programs with you, but sometimes it helps to do a little research. I have had students in first time homebuyer classes tell me that their loan officer never discussed certain programs with them. It may be that the loan officer or their company may not participate in those programs or maybe they didn’t think the buyer would want use them. If you are buying your first home, you may qualify for first time homebuyer programs. Ask about them. They may help you but they may not – but if you don’t know about the program, you may be missing out on something.
You want to get your mortgage approval before you start looking. Most realtors will not show you homes until you are approved. Plus you want to know that you can afford the home you find – nothing worse than finding a home you love and then finding out you can’t qualify for it!!
Talk to friends and family about their real estate experience, get referrals for both loan officers and realtors. Sharlene is a great realtor -she will listen to your needs and help you find the home that is right for you! Remember your realtor and loan officer are going to work with you to find you the perfect home for you!
Make sure you have money set aside for your earnest money – this money goes towards your down payment and closing costs. You will need it when you write your purchase agreement. And remember, if you write a check, it will get cashed! I have had clients over the years get surprised by that! Make sure you have money in your account!
Buying a home can be a stressful time but we also try to make it fun!! Buying a home is a huge decision, so it’s important that you do not rush through the process. Always remember to ask questions if you are not sure about something! Lenders and realtors do this every day and sometimes forget that you may not understand what we are saying! Make it fun!! Enjoy shopping for your new home- it’s always easier when you are prepared!!
Leslie Vanderwerf, NMLS ID#335509, Everett Financial Inc, dba Supreme Lending, An Equal Housing Lender, NMLS#2129 – Email – Website
