5 Crucial Steps to Buying a Home
For some, homeownership has been a goal that they have had for years. Others have rented for years are now ready to experience the joys and satisfaction of home ownership. Whatever your reason for wanting to buy, it is important to remember that purchasing a home is a big step and requires a lot of important decisions along the way. With some advanced planning and research, you can be sure your home purchase is something you feel good about for many years ahead. Here are a few of the basic steps that lead you to a successful transaction.
Knowing and Understanding What You Can Afford
Knowing and understanding what you can afford is different than knowing how much you qualify for. It means calculating how much of your budget you will devote to your home and how much money you want for other things. For example, if you are a person who loves to travel, odds are you can qualify for more house than they should buy. This is because in order to maintain a travel-friendly lifestyle some money has to be allocated towards accommodations on the road or other travel expenses. If you love fishing, boating, or a hobby such as restoring classic cars, factor the required budget for your preferred pastime into your overall household budget, or risk having to change your lifestyle.
Review Your Credit Report
Know your credit score prior to meeting with any banks, loan officers or mortgage brokers. A low credit score will result in a higher interest rate and possibly prevent you from qualifying for the loan you want. If there are errors on your credit report it is important to take care of it immediately, this is because it can take several months to correct any errors in your report. By reviewing your report a few months before home shopping, you could save yourself several thousands of dollars over the life of your mortgage.
Choosing Your Professionals
Did you know that the U.S. Department of Housing and Urban Development (HUD) advises potential homebuyers to attend a homeownership education class prior to choosing a mortgage? The Consumer Financial Protection Bureau was established to help protect consumers from predatory lending, it also mandates all required information about your loan and real estate transaction be written in clear, easy to understand wording – making it a fantastic resource for home buyers.
Negotiating the Contract
Buying a home is an emotional experience. Trust your home buying experience by finding yourself a qualified real estate professional who can guide you along the way. A qualified and knowledgeable real estate professional will be able to work with lenders, home sellers, and other real estate agents every day. They will advise you on negotiation strategies and be there to provide objective advice that protects your best interest in the transaction.
Get a Home Inspection
A thorough home inspection by a certified professional is crucial for any home purchase. You should attend the inspection and feel free to ask questions about any areas of concern. Once you have received the home inspection report, your real estate professional will review it with you. You may choose to ask the seller to make some needed repairs, negotiate a lower price, or accept the report and move forward with the transaction as it is.