Buying a home can be both a rewarding and stressful experience. Before you head down the path to homeownership, it’s important to consider key questions, so you can prepare yourself and your family for the tedious process.
3 Key Questions to Ask First:
Is it better for you to buy?
Renting could actually be a more expensive long term, so many families opt to buy a home, especially if you intend to stick around for awhile.
Realtor.com shares a special “Rent Vs. Buy” calculator that helps you gauge when you would cross over the “breakeven horizon.” The “breakeven horizon” is the point where buying equals the cost of renting.
Is it financially feasible?
Typically, buying a house would involve a down payment and then paying a mortgage monthly that could last up to 30 years. The ideal down payment outlined by Zillow is 20 percent because that can give you the best overall rates, but there are some down payments that can go as low as 3 percent.
Lenders want to loan money out to financially responsible individuals, so preparing yourself financially by making sure your credit score is excellent and having money saved is the best way to get set-up for a home loan.
Are you personally ready?
It comes down to a gut feeling as well. Do you feel like it is the time to buy a home? Can you be ready for whatever comes your way?
Owning a home is a big commitment and before signing the dotted line, you have to be ready to take on the little things like maintaining your lawn to basic indoor upkeep. There are major repairs like roof damage and structural issues that could come along as well. All of that would be in your hands.
Despite all the challenges that could drop on your lap, owning a home is also wonderfully gratifying.
Now, once you’re completely ready, be sure you go through the following steps in detail:
Check your credit
Before you do anything, make sure you are an ideal candidate for a home loan. Your credit report is important to lenders because it can give them a sense of your financial habits. Be sure you have a steady track record of paying all your bills on time as well. Here is a more detailed list from Realtor.com that outlines critical credit score information.
Calculate your budget
Zillow has a handy calculator that potential home buyers can use to gauge their budget. A huge thing to keep in mind is just because you might be able to qualify for a higher loan, it might not be financially smart to take it. Really consider how much you want to spend as well as how much you can spend.
Find a great real estate agent
This is where we come in! Once you’ve calculated your budget and made sure your credit report is clean, a real estate agent guides you through the rest of the process to make sure you locate and get through the process of home buying.
Get pre-approved by a lender
While not required, it’s a smart move to get pre-approved for a loan. You’re not even obligated to accept the loan from where you receive a pre-approval. Getting a pre-approved letter helps you keep ahead of the game and it’s recommended that you at least reach out to three lenders to compare rates.
Look at homes
This is where the fun begins! While home searching, keep your budget close and pass along any requirements in a home like bed/bath count. Consider ideal neighborhoods, home types, etc.!
Make an offer
Your agent will work closely with you to craft the perfect offer for the house of your dreams. This is also where nerves set in for home buyers! Keep in mind the listing price is only a starting point and your agent can help you figure out what would be your best move.
Closing on your home
Once your offer has been accepted, you will work on reading and signing a lot of papers, but this is when you can start doing the happy dance because you are almost done!
This is by far, the most exciting step in the whole process - you are now a homeowner. Let it sink in!