A home is one of the biggest and the most exciting purchases that you will make in the course of your life. However, it also involves careful planning and consideration about how to make the most of this potential purchase. It is a major investment for the majority of people who purchase a home and in fact, it is likely to be the biggest purchase you will ever make. There are six key things that you need to consider as part of your must do process when purchasing a home.
Improve Your Credit Score
Taking a look at your credit score and making efforts to improve it will increase your chances of getting a loan that helps you purchase your ideal dream location. Doing this research well in advance of figuring out what you want to purchase will help you identify things within your budget. Here is a quick guide on how to do it: MyFico.
Select What You Can Afford
Make sure you select a home that allows you to be financially comfortable. As many different recessions can indicate, it can be challenging to end up in a home that you believe to be ideal but is far too expensive for your individual reach. Consider a home that has a realistic debt to income ratio as this will make your life easier now and well into the future.
Use a Checklist
Keep a checklist of all the things that you hope to accomplish before purchasing a home. You should also put together a checklist of the ideal features and amenities inside your dream home.
Save for Closing Costs, Loan Fees and Down Payment
Depending on the financing you receive, you may need to come up with between 3% and 20% of the home’s price. Factor in closing costs and loan fees as well so you have a good idea of what you can realistically afford. This might shift your original budget slightly. “This is why working with an expert is important, make sure your realtor is experienced enough to help you navigate through the process and get you the best deal on the purchase of your home.” This was great advice offered by Elionora Dudayeva of Chance Realty.
Ensure You Have a Savings Account
Building up a savings account can even be more important than setting aside money for your closing fees and your down payment. This is because the lender wants to see financial stability and a savings account helps you illustrate this for the lender. Plan this out six months in advance, if you can. A lender wants to see that you have made a consistent effort with your savings account. Having a comprehensive picture of financial stability and earnings potential may go a long way towards helping you accomplish your goals when it’s time to buy a home.
Be Preapproved for Mortgage
For anyone who is serious about purchasing a home, the number one thing you can do to increase your chances of finding the right property is to get financing in place. Most people are not aware that the preapproval process is far more extensive than it was several years ago. Documenting assets and income is very important and can be a lengthy process if you’re not prepared for it. This is why it is essential to do your research and preapproved for a home sooner rather than later.