Steps for getting ready to buy your first home:
- Save money for a down payment. Having enough money for the down payment is the biggest obstacle for many first time buyers. 20% down on a $250,000 home is $50,000. That is a lot of money to have on hand. While 20% is often quoted as the amount you will need that is not always the case. 10% down is enough in many cases and sometimes even 5% will get you into a new home.
- Check your credit score. A bad credit score can prevent you from getting a mortgage or at the least push up the interest rate on your loan which will cost you money. Mistakes on your credit history or legitimate credit problems will take time to be cleared up. Raising a low credit score can take months.
- Find a good mortgage broker. A professional mortgage broker can help you in many ways. They will advise you as to the best ways to improve your credit score, inform you as to what your monthly payments will be based on the price of the home you buy and they can help find you any down payment assistance that is offered by the government.
- Obtain a great Realtor. Buying a home is a team effort. There are mortgage brokers, listing brokers, lawyers, home inspectors and buyer’s brokers. For most of us buying a home is the biggest financial decision we will make. A great realtor will not only help you find your dream home they will also coordinate the entire home buying process. They can advise you on the best lawyer, mortgage broker and home inspector for your home-buying needs. They will also work with the mortgage broker and lawyer ensuring that everything moves ahead smoothly. You can find a realtor by a friend’s recommendation or you can look at online broker reviews.
- Set a realistic budget. You need to determine what monthly mortgage payment you can actually afford. Why waste your time looking at homes that you cannot really afford. There are several websites that will give you your ideal home price once you input information like interest rates and monthly payments. You can also talk to a mortgage broker who will advise you as to the size of loan you can get based on your financial situation.
- Figure out what is important to you and what you can live without. Unless you have millions to spend you are going to have to make concessions. You will need to pick a city or neighborhood, house style, size and extras. A real estate broker will not only help you set your priorities, they will be able to tell you if they are realistic.
- Get a mortgage preapproval. Most home sellers will not seriously consider an offer without proof that you can get a mortgage. This step should not be done until you are seriously looking. They are only good for a short time