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A home is a place where memories are made. If you are looking to buy a house for yourself and/or for your family, you have to ensure you are ready for this type of investment before you take a leap.
How do you prepare yourself before buying a home? Here is a checklist of the things you need to consider before going house shopping:
1. Credit card score
Check if your credit card score is strong. The higher score you have, the higher the interest rate you can get for your mortgage. If you have a good credit with your bank it could significantly lower your monthly payments. If you think your credit card score is not that great yet, wait. Work on building your credit card score. Don’t be in a hurry to buy a house if you are not ready to accept financial burdens.
2. Budget
Estimate a budget. Look online or hunt for houses that are within your price range. Determine what you can afford through overseeing what your general needs are for a home. Location, number of bedrooms and bathrooms, and even the school zones within the area are one of the many things you should consider.
3. Down-payment
Save up for at least 10% up to 20% of your down-payment. As much as possible it’s best to have cash as down-payment. Also try to save up for closing costs. It is better to pay 20% down-payment in order to lower your monthly costs.
4. Savings
Aside from the down-payment, save for unexpected expenses. Build a savings account that will ensure you can afford monthly amortizations. Also prepare for surprise expenses and be aware of any hidden costs. These unexpected expenses can be insurance, property tax, maintenance and utility expenses that can add to your monthly fees.
5. Mortgage
It is best if you can get a mortgage pre-approved. Once you have set aside a final budget, try to get a pre-qualification letter from a mortgage lender/broker or bank. This will show realtors and sellers how much you can afford. They often make multiple offers to those who are pre-qualified compared to those who aren’t. Compare offers first before you select which one to go with. The goal is to pick the home that would cost less.
6. Real estate agent
Lastly, it’s important to find an agent that knows your needs. Ask friends and family for recommendations. Spend time with the right agent to know their experience and expertise. Check floor plans and go out with them to see the properties personally. Once you have finally decided, make an offer that you’re comfortable with and close the deal.