10 Steps to Take BEFORE You Start Your Home Search

August 30, 2016

1.  Make 2 lists. Make one list of what features you MUST HAVE in your new home, and a second list of what you would LIKE to have in your new home. Now, prioritize your lists.

2.  Select where you want to live. Compile a list of three or four neighborhoods where you’d like to live, taking into account items such as convenience, schools, shopping, recreational facilities, and other personal considerations.

3.  Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.

4.  Decide what you can comfortable invest. Generally, you can afford a home equal in value to between two and three times your gross income. Factor maintenance and repair costs into your post-home buying budget.

5.  Investigate other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. National programs include the Nehemiah program, www.getdownpayment.com, and the American Dream Down Payment Fund form the Department of Housing and Urban Development, www.hud.gov.

6.  Explore different loan options. Are you more comfortable with a fixed rate or an adjustable rate mortgage? Would you like to pay your loan off sooner with a 15 year amortization instead of a 30 year?

7.  Determine your estimated closing costs. You’ll likely be responsible for a variety of fees and expenses that you will have to pay at the time of closing. Your lender must provide a good-faith estimate of all settlement costs.

8.  Get preapproved for a mortgage. Being pre-approved not just pre-qualified means the lender has already approved you and this allows you to make a firm commitment to buy and makes your offer more desirable to the seller.

9.  Seek homeowner insurance coverage as soon as your offer is approved. You must obtain insurance to buy. And you don’t want to be told at closing that the insurer has denied your coverage.

10.  Don’t go it alone! Select a good real estate agent who can help you. Home buying is a big commitment; it’s critical that you choose a highly skilled real estate agent you feel comfortable with.