Few things in this world are as exciting as purchasing something substantial like a new home. Of course, few things are also as expensive. Because of this, your first home is one purchase that should not be taken lightly—and should, in fact, be adequately prepared for in more ways than just financially. Follow these four steps for a successful home buying experience:
1. Know what you can afford.
First thing’s first—before you can buy a new home, you need to be able to know that you can afford to. Think about adding an app to your phone to help you through house hunting and number crunching—with your tool at your fingertips, it’ll help you make sure you don’t overspend.
What sort of loan you can get is directly affected by your money habits. Because of this, you will need to find out your credit score, which will impact your eligibility—not just for your home loan of choice, but also for better rates.
Next, you also need to learn what types of loans and mortgages are available, as there are more options than you may realize. Consider getting a mortgage pre-approval to lock down competitive rates. If you need to boost your cash reserves to pull things off, the Los Angeles Times recommends selling securities before applying for pre-approval.
Choosing the best mortgage for you depends on a variety of factors, such as what you can afford by way of down payments and other upfront costs, term length, and more. Take conventional mortgages, for instance. These kinds of loans are low-cost and provide adjustable- or fixed-rate options. Conventional loans also have a good range of down payment options, and as a bonus, you may even avoid mortgage insurance altogether when you have a down payment of at least 20 percent.
2. Hire a real estate agent.
As soon as you know for sure that a home is within your purchasing power, it’s time to hire a real estate agent. While you can go through the process on your own, working with an agent is more compelling in many ways. At the most fundamental level, they have the experience and expertise to help you navigate the nitty-gritty of your home purchase—not to mention, the paperwork. They also generally have access to more properties for you to choose from.
Needless to say, choose an agent based on experience and knowledge of the local market. Good communication is also a factor and possibly even personal rapport. So as a rule of thumb, check out several real estate agents in your area and check out reviews from former clients.
3. Find your dream home.
As mentioned, it’s a good idea to work with an agent who has access to several properties that fit your criteria. Alternatively, you can also make use of other resources like property listing sites online and your local classifieds, to name just a few.
Of course, surface factors like curb appeal and staging will be huge elements in choosing a home. However, The DIY Playbook says you must also be aware of red flags so your investment is a sound one, like moisture and drainage issues. With that in mind, it’s prudent to get a home inspection completed before closing the deal, but don’t just go for any home inspector. Make sure that you choose a qualified home inspector with a wealth of verifiable experience and competitive rates.
4. Close the deal.
After all is said than done, it’s time to make an offer and upon acceptance, close the deal. Again, your real estate agent will be an invaluable resource at this stage to help you with the paperwork, and maybe even in establishing utilities and insurance and getting the house move-in-ready for you.
Indeed, the process and expense of purchasing a new home is a rigorous one. Thankfully, these tried-and-tested steps make it infinitely more manageable. And with the key to your new home in hand, it’ll all be worth it.