Its a new year and the real estate market is heating up, so now may be the right time to buy a home. The home buying experience isnt always an easy one and its important to be as prepared as possible. Having a plan in place will help make the process run smoother. What are some things you can do to make your real estate purchase a positive one? Here are some tips to get you started:
Decide on a budget: Money is, of course, always a big factor in the decision to purchase a house. Determine how much you can afford to pay monthly and what your likely down payment will be; generally it is recommended to put down about 20% of the purchase price to avoid additional fees and loan provisions. If your purchase timeline allows, begin setting more money aside to cover the initial down payment and any closing costs you will incur. Carefully consider the actual cost of buying and owning a home and factor this into the total home price. Know how much house you can afford and do your best to stay within that budgetyou wont enjoy your new home as much if its strapping you for cash.
Review and improve your credit: Credit score and history plays an important role in determining your eligibility and rate for a mortgage loan. Now is the best time to start cleaning up your credit and trying to raise your score as much as possible prior to purchasing the home. Mortgage lenders will be able to provide you with your FICO score, but its best to know well in advance of the loan process. This will allow you to pay off or close accounts that may help your overall report. The lower your interest rate the lower your monthly mortgage payments will be. Ultimately, having a positive credit rating could allow you to purchase a larger or more expensive home.
Prepare your current home to sell: If you are not a first-time home buyer you likely have another property to sell. Begin making any necessary repairs or updates to your existing home prior to listing it on the market. Once you have found your next home and secured an offer and mortgage, you dont want to pass it up in order to avoid having two mortgages. Having your home sale ready will eliminate potential financial stress and get you into your new home faster.
Shop smart: Research what you want in a new home; the size, location, and style. Knowing these things going in will save you time in the house hunt. It wont benefit you to look at homes that are too small for your family, for example, and you will waste valuable time and possibly miss out on the right place. Be specific with your realtor and also know where you are willing to compromiseyou may not find everything you want, but know what your must-haves are.
Buying a home can be a lot of fun, but also very stressful. Plan ahead and dont rush the processthis is the biggest purchase you are likely to make in your lifetime.