Buying your first house can be an overwhelming chore if you don’t know where to start. As always, the more you know, the better prepared you are. Here are 10 tips to help get you started:
1. Check your credit: Request a free credit report well before you begin house hunting. This will give you a chance to fix any mistakes and pay off debts you may have forgotten about. Seeing what lenders will see is an important first step.
2. Check selling prices: Do an internet search of homes in your area to get an idea of the current selling prices. This will give you realistic expectations when you’re working on your budget.
3. Calculate your budget: It’s recommended that home buyers spend no more than 28 percent of their income on housing costs. Calculate your monthly budget before going house hunting.
4. Calculate the estimated cost: You must consider more than just your estimated mortgage. Taxes and homeowners insurance (call your agent for a free quote) are often-overlooked expenses that can easily double your monthly payments. This total number should be within your budget.
5. Consider the big financial picture: Even if your estimated cost lies within your budget, you should ensure a financial cushion for unexpected events such as broken appliances and other maintenance/repair costs.
6. Talk with a real estate agent: These professionals are familiar with the current real-estate climate in your area and can be a valuable resource for your questions and concerns about the housing market.
7. Apply for a mortgage: Get organized before visiting a lender. Prepare a document including at least two recent paystubs, the previous two years’ W-2 forms, tax returns and your last two months of bank statements. With this information gathered, you should be able to easily apply for a mortgage.
8. Get an inspection: Before committing to any house, hire a professional to perform an inspection. Big problems may be hidden from the untrained eye. If problems are found, you may be able to negotiate with the sellers to have the repairs made.