5 Tips Before You Buy Your First Home

Home Sweet Home

So, you found a house online listed for sale. You keep coming back to the twenty listing photos and start picturing your family in your next home – the first Christmas, birthday celebrations, backyard BBQs, and just daily life. Buying a home can be very emotional! Before you fall in love with the idea of the house you have to have….make sure you’re ready! Check out these tips to get you ready for the home-buying journey.

Improve your credit score

Pulling your own credit report will not affect your score! Consumers are entitled to one free copy of their credit report every 12 months from each of the three credit reporting agencies: Experian, Equifax and TransUnion.

Pull your credit reports from each bureau and make sure there are not any debts that have been reported as unpaid or anything else that would appear to hurt your score. You can file a dispute for anything that you believe is inaccurate or incomplete.

Purchasing your credit score will give you a better idea of where you are and what kind of rate you may qualify for when applying for a mortgage. A credit score of 720+ will typically qualify a borrower for the best rates (no points).

Know Your Budget

Buying a home is typically the largest purchase you will ever make. It’s important to remember that the expenses of being a homeowner go beyond your mortgage and interest monthly payment. You will also need to factor in property taxes, PMI (if required), HOA dues when applicable, basic maintenance and repairs.

Owning your home is a big responsibility and if you are not the handy type, be prepared to pay a professional for small jobs here and there. Gone are the days of calling your landlord when a lightbulb needs changed!

Save, save, save

Ideally, having a down payment of 20% of the home value will save you money. Most mortgage lenders will require PMI (Private Mortgage Insurance) if you finance more than 80% of the home’s value. Keep in mind this insurance protects the lender not you in the case that you are unable to make your mortgage payments.

Bulk up your savings account while you’re putting money aside. A little cash cushion demonstrates to your lender that you are not living paycheck to paycheck and can budget for emergencies. Not to mention, you may need it for those unexpected expenses for repairs and/or maintenance.

Get pre-approved

Don’t get emotionally attached to a home that is out of your price range. Before you even go look at a house with your realtor, get pre-approved for a mortgage with your lender. Pre-approval letters can also help when dealing with sellers and realtors by showing them you’re a qualified buyer; it may even strengthen the offer.

Don’t Settle

Finding and buying the house that’s just right for you and your family can be a lengthy process. If you have a list of ‘must-haves’ make sure you don’t sacrifice too much of what you want just for what’s available. Make sure your expectations are realistic, too.

It can take time to find THE ONE. You may even make an offer that doesn’t get accepted by a seller – but, that just means it wasn’t meant to be! Be patient and enjoy the process.