Buying a home will likely be the biggest purchase you ever make, so you should do all you can to make the process easier. Here are three tips to help you prepare to find and buy a home that fits your budget and your needs.
Review and Improve Your Credit
When you are going to apply for bank financing to buy a home, your credit score can help or hinder the process. Your credit score can also cause you to pay more or less in interest for a home loan.
Several months before you begin the search, request a free copy of your credit report from one of the three main credit bureaus. You can complete this online through each credit bureau's website or call them and request a paper copy to be mailed to you. Check your report for any errors, and dispute them through the credit bureau. Erroneous information, such as a delinquent account or a fraudulent credit card in your name can negatively affect your score.
If you have several credit cards, try to pay their balances down as soon as possible and close any unused credit card accounts. Having an excessive amount of credit cards on your report can lower your credit score.
Determine Your Budget
Next, you should look at your monthly income and expenses to calculate how much you can afford for your house payment. Make a list of all your monthly expenses and responsibilities, such as a car payment, utilities, student loans, child care, groceries, and any other regular expenses. Subtract these expenses from your monthly take-home pay to find out how much extra you will have to put toward your new home.
Take into consideration you will be responsible for paying your mortgage payment, property taxes, and home owner's insurance on your new home. Be sure to figure these into your budget. Your mortgage broker can help you determine your budget as you apply and qualify for home financing.
Hire a Realtor
Once you have a budget in mind, you can begin the search for your future home. Hiring a real estate agent is a good idea to help you through the process, as they are trained in real estate law and will work for you with your interests in mind. Your real estate agent will be able to search for homes for sale that fit the requirements on your wish list and help you make an offer an negotiate the purchase price. Contact a company like RE/MAX Regency to learn more.