You’ve worked hard and planned for this moment. Buying your first home is just around the corner. What do you need to know before you begin searching available listings? Read this handy guide for first-time home buyers before you start the home buying process.
Check Your Credit Report
Thanks to The Fair Credit Reporting Act, you can receive a copy of your credit report at no charge once a year. In the time before you contact a real estate agent, use that free copy of your report to look for any errors or delinquent accounts that require attention. Report the mistakes and pay off any past due accounts to ensure that your credit report is in the best shape possible before you need to apply for a home loan. Also, try to avoid abruptly changing careers or purchasing large ticket items in the months before your home search to prevent changes to your debt to income ratio.
Money in the Bank
Your home mortgage loan will not cover all the expenses related to buying a home. You will want to pad your bank account as much as possible for these additional out of pocket costs that will appear. Some home mortgage loans require you to pay a down payment, which is typically twenty percent of the home’s purchase price. There are also situations where a seller won’t agree to cover closing costs, and those fees become your responsibility. You should be prepared to pay 2-8 percent of the home’s price to cover closing costs in that scenario.
Find a Real Estate Agent
There are many options to choose from when searching for a real estate agent. Talk with your family and friends to see who they recommend from their home buying experience. This advice may help you narrow down your choices. You want to make sure that your real estate agent is professional, resourceful, and genuinely working with your best interest in mind. A home purchase is one of the biggest investments you will make in your life, so be sure to weigh the pros/cons and reviews of each real estate agent before you make your final choice.
First Time Home Buyers Get Pre-Approved
It is a good idea to apply for a home mortgage loan pre-approval to receive an accurate idea of what your budget for your new home should be. You don’t want to waste time and energy looking at homes that end up realistically being out of your means. Know what your price range is and use that to your advantage to get the best bang for your buck. Sellers love to see a pre-approval letter. This approval lets them know that you are serious about the purchase and can follow through on your offer. The pre-approval for a mortgage loan can prove useful if you end up in a bidding war with other buyers.
Make a Wish List
Time is precious when you’re looking for a new home. Don’t waste valuable time by looking at properties that don’t fit your needs. Create a wish list that includes items you hope to find and items that are non-negotiable. Consider things like distance from work, the number of bedrooms, school zones, and community amenities. Give a copy of your wish list to the real estate agent. This list will help them choose homes that match your search criteria. When you get distracted by all the options that different homes offer, your wish list can keep you focused.
Most home buyers don’t find their dream home overnight. Go into your home search with a realistic expectation of how long you may have to weed out homes. Your real estate agent is there to help you along the way. They will move as through the process as quickly and as stress-free as possible. Trust in your agent and try not to be discouraged if your dream home doesn’t appear right away.
Your real estate agent is the best source of information about the local community and real estate topics. Give KLM Realty a call today at 319-372-1919 to learn more about local areas, discuss selling a house, or tour available homes for sale.