Purchasing your first home, no matter the age, is a huge achievement and responsibility. Purchasing your first home can also be a daunting process, as the entire process is a new experience for you. If you think you are ready to purchase your first home, here are a few basic rules to follow that will help ease the learning curve of buying your first home.
Make Sure You Are Financially Ready
Before you start seriously looking for a home, you need to make sure you are financially ready. Ideally, you should start this process six months to a year before you want to buy a home. Start by obtaining your credit report from all three credit reporting agencies, and make sure the information is correct. If the information is inaccurate, you can gather proof that it is inaccurate, and get the information changed. This can take some time but is worth the effort. You can also take steps to improve your credit score, such as paying down credit cards, so your available credit to debt ratio is lower and you have regularly been making payments on time. To be financially ready, you also need to save up money for a down payment, home inspection, and closing costs.
Shop for a Loan
Second, when you are closer to being ready to looking at residential real estate for sale, you are going to want to start shopping for a loan. Research different loan programs to see which ones best fit your situation. You can often participate in loan programs that provide you with lower down payments as a first-time home buyer. Once you know the loan programs you are interested in, apply for pre-approval. Being pre-approved will make the process of putting in an offer on the home go smoother and being pre-approved will help determine how much of a home you can afford to purchase.
Determine What You Need
Third, you need to determine what you need from a home. Really think about your lifestyle, and what features you want in a home that would support you living the lifestyle you want to have. Look at homes online and get a feel for what you like and don't like in a home. Also, think about what type of mortgage payment you want to carry. Just because you get a big loan doesn't mean you should, set a budget that fits your personal budget for your life.
If you are ready to purchase a home, get to know your credit report and make sure it is accurate and in the best possible shape. Save up money for a down payment and other purchasing costs. Figure out what you want from a home, and get pre-approved before you start the home buying process.Share