Indeed, making a first home purchase is one of the most exciting and significant milestones in American life. But it can be daunting as well if you have no idea of where you should begin.
Luckily, by taking the right steps, you can navigate the process smoothly and find the perfect home for you and your loved ones. The following is a guide that you can use. Read on.
Know How Much You Can Afford For A Home
It’s recommended that you ask yourself about how much you can afford for a home if first time home buyer Virginia.
Begin by looking into your current financial situation including examining your total income, how much you spend, how much you have saved for downpayment, closing costs, and other expenses related to buying a home, and many more.
To make things much easier for you, you can utilize online mortgage calculators available so that you can have an idea of how much you can apply for a home mortgage. Financial experts believe that your monthly mortgage payments should be at a manageable amount and shouldn’t hit more than a third of your monthly income.
Check Your Current Credit Health
In today’s world, your credit status is very important and can help you unlock possibilities, including getting a favorable mortgage term.
Mortgage providers look at a potential homebuyer’s credit report in order to assess their credit worthiness i.e. if they’re responsible with their finances and credit lines and that they’re ready to take on another financial responsibility like a mortgage.
In order for you to get pre-approved for a home loan, and even get a favorable mortgage term, you should aim for a high credit score. You can increase your current credit score by paying your bills and utilities on time, disputing erroneous entries to your credit report, and many more.
Have A Sizeable Downpayment Amount Set Aside
Having a downpayment amount readily available is important when buying a new home. In fact, it’s said that it’s among the most significant upfront costs involved in the homebuying process, and many are said to have a hard time meeting it as a requirement.
As advised by real estate experts, it’s recommended that you have at least a fifth of the total amount of the price tag of the property you’re aiming for. This is for you to avoid paying for additional private mortgage insurance on top of your monthly mortgage payments.
Don’t worry though. There are home loans available that come with lower downpayment requirements, some even don’t require a downpayment amount at all.
Start saving early now and consider setting up a dedicated savings account to keep track of how much you have already for your downpayment for your dream home.
Talk To A Home Loan Provider In Order To Get Pre-Approved
After making preparations to boost your credit health and have an adequate downpayment amount available, the next step you need to prepare for is the pre-approval process.
Why go through pre-approval? Having a pre-approval letter from a lender is a chance for you to show home sellers that you’re a keen homebuyer and you’re ready to get down for business. Additionally, being pre-approved gives you an idea of how much you can apply and get approved for a home loan.
To proceed with pre-approval, get in touch with different home lenders and compare each one’s mortgage interests and terms. Aside from that, prepare important documents like your paystubs and other proof of income, bank account statements, and so on – lenders will have to look at these files, along with your credit history, to determine your credit worthiness.
Be Firm On Your Home Wants And Needs
Prepare a list consisting of home must-haves and nice-to-haves. This includes information like the number of baths and beds, home location, nearby amenities, and many more. When you’re preparing a list of home must-haves, consider your and your family’s way of living and long-term needs.
Having a list of must-haves will help you be laser-focused on your home search and reach your goal more effectively.
Work With A Highly Skilled Realtor
Having a highly skilled realtor by your side is a non-negotiable if you want to successfully close in on your chosen home. They have extensive market knowledge, can help you locate properties that meet your search criterion, walk you through the negotiation process, and many more.
When looking for a highly skilled realtor, you can ask for recommendations from friends and family. Aside from that, you can look for realtors with positive customer feedback online. At the end of the day, pick a realtor that you’re comfortable working with and who fully understands your wants and needs.
Begin House Hunting, Make A Formal Offer On A House, And Work On The Closing
With your budget, pre-approval, and wish list in hand, you can start viewing homes with your realtor. You can visit multiple homes, attend open houses, and many more. Take your time exploring your options; avoid rushing into making a decision.
Once you find a home you love, it’s time to make a formal offer. Your realtor will help you determine a fair offer price based on market conditions and so on. Be prepared for negotiations and counteroffers. Think of adding contingencies to your offer, such as a home inspection or financing contingency, to protect yourself.
After your offer is accepted, you need to work on finalizing your mortgage, doing home inspections, preparing documents, and many more. If you’re required to provide additional requirements and/or files, submit them to avoid any setbacks.
To Conclude
Preparing for your first home purchase involves careful planning and research yet everything is worth it. By following the steps mentioned above, you’ll be well-equipped to find a house that meets your needs and fits your budget. All the best!
