Its time. You’ve been online searching and daydreaming for months – you’re ready to make a move and buy a new home. So, where do you start? Here are 5 things you should do and know before buying your new home.
1. Hire an Agent
This is your best chance at finding the home of your dreams. Agents make the home buying process go much smoother. They know all the ins and outs of the market and can help you with all the legalities. Agents have the experience and know how to spot the perfect home that will fit your budget and they tend to have solid knowledge about the area they work in. Having an agent on your side ensures a professional eye is scooping out potential problems with the home and clauses you might not have noticed in the fine print. The best part – it costs you nothing to enlist an agent. Agents collect on the commission paid by the seller of the house.
2. Work on That Credit Score
Your credit score plays a huge role in buying a new home. It can affect everything from how much of a down payment you’re going to have to put down to what your mortgage rate will look like. Experts suggest having a score, at least, between 580-620 to be considered for a loan. Here are three ways you can bring your credit score up before entering the housing market:
Pay Down Balances – One of the quickest ways to boost your credit score is to get those credit card balances down as low as possible. Your credit score is partly based on your overall credit balance versus your total available credit.
Settle Collections – Have an old bill that fell into collections? The best thing you can do is make it a priority to get that bill cleared up. Debt owned by a collections agency will absolutely show up on your credit report and cause it to go down over time.
Limit Hard Inquiries – Every time you apply for a new credit card or auto loan it counts as an inquiry against your credit score. Too many of these inquires could end up lowering your over all score. If you know you’re going to be in the market for a home soon – try and keep these inquiries to a minimum or hold off all together until after you’ve closed on a home.
3. Balance Your Budget
Its important to know exactly how much you can actually afford to spend on a new home. This will affect where you’re looking, what kind of home you’ll be looking for, and what kind of loan you’ll be able to afford. You don’t want to run into financial hardships in the future because you didn’t plan accordingly. Outside of normal everyday expenses, you should really have an idea of how much money you can put toward the entire home buying process. This includes, money for a down payment, monthly housing expenses, closing costs, and any projects your future dream home might need done.
4. Get Pre-Approved
While you’re at it – it wouldn’t hurt to get pre-approved for a mortgage before you begin your house hunt. This will help tremendously when trying to plan out your expenses. The process is fairly straight forward. You’ll need proof of identity, employment, bank statements, and anything else that will show your overall financial condition. Once you get all of this information organized you can start researching lenders. A pre-approval letter may help, but doesn’t guarantee, a leg up against other potential home buyers. It shows the buyer your serious about the home buying process.
5. Know What You Want, What You Can Live Without
Your dream home is your dream home for a reason. Its a combination of everything you’re looking for in a house you plan on spending a good portion of your future in. However, just because you want it, doesn’t mean you can afford it. Its important to come up of a list of specifications you can’t live without and what could be compromised on. Maybe the home you’re looking at has the perfect amount of rooms and square footage, but is lacking a backyard. Maybe you want something move-in ready, but nothing you find is reflecting what your budget can afford. Knowing exactly what you’re looking for helps make for an easier buying process.
Think you’re ready to jump into the market? Contact Sea Breeze Realty for our currently listings or to talk to an agent about finding your dream home. Surf City Office (609) 494-7778 Beach Haven Office (609) 492-8800.