Buying a home is a process that requires extensive preparation, sometimes extending even years before you’re ready to put down a deposit. To assist you in having the best home-buying experience possible, here are some tips and tricks to put in practice throughout your preparation, as provided by the mortgage experts at Rex Homes.
1. Weigh the Importance of Needs vs. Wants
Clarify what you want to see in your new home and what you need to be included. The two-story home you’ve got your eye on may look nice, but is it ideal for older family members and visitors? Keep your options consistent and reasonable, based on these criteria.
2. Make a Budget
Overspending is a preventable mistake. Narrow your home search by setting a budget that aligns with your current income and debt.
3. Save for a 20% Deposit
The average down payment for a brand-new home is 20%. This is ideal for reducing future monthly payments and preventing the high costs associated with private mortgage insurance. Start saving for this as soon as possible!
4. Monitor Your Credit Score
Your credit score is central to your eligibility for buying a home, as it can make or break a lender’s perspective on whether you are a trustworthy borrower or not. Your score also plays a vital role in determining the interested rates offered to you once you’re approved for a mortgage. With these facts in mind, start monitoring your score early on and keep it in (or above) the mid-600s for the best borrowing opportunities.
5. Be Realistic
After you’ve taken a hard look at your credit score and set a solid budget, you may notice that your options for brand-new homes have changed. That’s ok! Be realistic in your expectations for home-buying opportunities and make sure they align with your finances. (This way, you won’t get attached to homes that are outside of your price range.)
6. Make Room for Surprises
You’ve already done the hard work of creating a reasonable budget. Now, as you narrow down the search to your top choices, you need to starting making adjustments for potential surprise costs. Unexpected costs may include surprise fees at closing, sudden repairs, and similar issues. Expand your budget slightly as you get closer to a final choice, so you don’t get blindsided.
7. Seek a Pre-Approval
This is crucial to finalizing your home search since a pre-approval will solidify the maximum amount of funding that a lender is willing to grant you. Pre-approvals are valid for a limited time, so proceed with this step only when you are sure of your decision to complete your search for a new home.
8. Have the Home Inspected
Even new homes must be inspected by a professional before closing. No matter how confident you feel about the house, do not commit to a purchase without first confirming that the structure is compliant with current construction codes.
9. Hire a Mortgage Professional
Make sure to get a qualified mortgage professional by your side. This expert will guide you through each step of the home-buying process, ensuring that you make the best decisions for your finances while avoiding predatory lending practices. Get in touch with a mortgage professional today to start your home search!