Purchasing a home is something that most people aspire to do at some point in their life. The actual process, steps, and financial procedures required are often not openly discussed. This lack of information may leave you feeling in the dark. Good news! We’re here to help shed some light on the home buying process!
📋 Your Credit Report Matters
A good credit profile is when your credit history has been maintained in good standing for a certain length of time by making payments on time or having a good debt to income ratio. Knowing your credit score and working towards a good credit status is important. It can improve your chances of being approved for a home loan and get you better interest rates.
💰 Adding to Savings
The deposit you make on your new home gives you a boost when applying for a home loan. If you have a deposit to put down, the banks take this into account, and your affordability score will rise. Make sure your savings cover the deposit and any closing costs you may be required to pay. It’s a good idea to have at least 20 percent of the cost of the home you are wanting to purchase for the down payment.
🙋♂️ Choosing the Right Real Estate Agent
You’ll be working closely with your real estate agent, so you want to choose one that suits your needs. They should be knowledgeable about the area, communicate at a high level, and have excellent negotiation skills. Ask people you trust about their experiences with local real estate agents. Set up a meeting time to conduct an interview that allows you to ask important questions. Make your list ahead of time so you’re prepared. The right agent should be highly motivated, understand your wish list, and be willing to communicate in ways that meet your needs.
📝 Get a Mortgage Pre-Approval
Being pre-qualified for a home loan is a vital step as it will confirm the bond amount for which you will be able to qualify. A pre-qualified home loan will give first time home buyers a good indication of what house they can afford. This amount is not a guarantee from a bank but rather a guideline to be used when house hunting. Once your application has been approved, the bank will issue you with a quote stating information pertaining to the pre-qualified loan. Cited on your pre-qualification will be the bond amount, the interest rate and the installment amount.
📜 Create Your Wish List
Before you begin house hunting, it’s important to know what you’re looking for in your home by making a personal checklist. This list should incorporate the needs of each member of the household. You should ask yourself:
- How many bedrooms and bathrooms are required?
- Do I need off street parking?
- Do I need to be close to public transport?
- Do I have animals that require a large yard?
- Do I want to be close to work, schools or other amenities?
Drive around the neighborhood you are interested in and view other homes for sale, so you have a general idea of what to expect for your money.
🏠 What to Expect During Your Home Search
There are many options when it comes to the search for your dream home. You can go out house hunting or you can search online, but your biggest time saver will be your real estate agent. Using your wish list, they will select properties that most match your criteria. This saves you an incredible amount of time and money because it allows you to focus on exactly what’s important to you.
When looking at homes, be sure to look closely at the neighborhood, school district, access to local amenities, and the security of the community. Note how close you’ll be to the local hospital and shopping centers. Don’t just trust a day time drive around the neighborhood. Check things out at different times of the day and night to get a good idea of what you can expect once you purchase the home.
Make the most out of open houses. Use this as another opportunity to scope out the neighborhood and your potential neighbors. During the open house, pay close attention to the home’s overall condition and look for any smells, stains or items in disrepair. Ask a lot of questions about the home, such as when it was built, when items were last replaced and how old key systems like the air conditioning and the heating are.
Be prepared to compromise. It’s rare to find a house that’s perfect in every way, so think carefully about what you’re willing to compromise on and what you’re not. Perhaps no walk-in closet in the master bedroom is a deal breaker, but an outdated guest bathroom will be tolerable until you can renovate it.
Your real estate agent is the best source of information about the local community and real estate topics. Give Peter Klein a call today at 720-771-5757 to learn more about local areas, discuss selling a house, or tour available homes for sale.