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The temptation for buying a home is both powerful and emotional. Whatever the reason for buying a home, here are the top tips to follow when buying a home!
1. Don't skip the pre-approval
It can be tempting to jump right in when hunting for your next home, or maybe your very first house. However knowing the prequalification's and what you can afford to buy is very important.
Knowing the difference between prequalification VS preapproval is the first step.
Prequalification: is an informal estimate of the amount of home loan you may be able to obtain based on your income, soft credit score, and other information.
Preapproval: is an official document from a mortgage lender telling you exactly what type of loan amount you can get based on your financial status, hard credit score, bank statements, and much more.
2. Stabilize Your Credit
Once your credit has been checked by a lender you want to make sure it stays stable during the loan process. Many landers check your credit multiple times during the loan process. This is not the time to open, close, or transfer accounts or balances. Additionally, you want to make sure you pay all your accounts on time. Any change to your credit has the potential to impact your final approval from a lender.
3. Understand Loan Options
There are many loan options available to you. The type of loan you choose will determine your down payment amount, the type of home you can buy, rates, and much more. Here are some of the most common loan types:
Conventional loans: Conventional loans are the most common type of home loans. You can purchase a home with as little as 3-10% down.
FHA loans: An FHA loan can allow you to buy a home with less strict financial and credit score requirements. You can get an FHA loan with a 3.5% down payment and a credit score as low as 580.
USDA loans: USDA loans are for people who want to buy a home in a qualified rural or suburban area. You can get a USDA loan with 0% down, subject to household income restrictions.
VA loans: VA loans are exclusively for veterans and members of the armed forces and National Guard, and qualified spouses. You can buy a home with 0% down if you qualify for a VA loan.
These are just the most common loan types available to you, make sure to do your own research and determine what loan is best for you and which ones you qualify for. ---> More Resources
4. Make a List of Needs & Must Haves
The reason for buying a home should be your guiding light. For instance if you are moving because you want your children in a better school district, want to be closer to your parents, or even need to relocate for a new career; your location and a bit of research will come in handy.
Needs: are things you need in order to maintain your lifestyle or even begin a new one. Location, Size, Number of Bedrooms, etc.
Must Haves: are things you must have in order to feel secure with your choice. Safety, Alarm Systems, Larger Garage, Certain Neighborhoods, etc.
5. Stay within your Budget
Many home buyers get emotionally invested in a house. This can backfire if they can’t get the loan for the house or they don’t have the funds to address major property issues that the inspection revealed, or that can arise when owning the home. Don’t go over your budget for a house, even if the house seems like the perfect choice. Be sure to budget in enough money for repairs and renovations. The right home is out there for you, so keep searching until you find a home that fits your budget and satisfies your list of must-haves.
6. Hire a Professional Inspector
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