After many years of renting, and being unable to make your residence your own, you have decided to buy. Purchasing property presents many opportunities for creativity and financial advancement. The road to homeownership, though, is not for the faint of heart. Here are five ways to start the home buying process right.
1. Start researching early
Do not wait until you have given your landlord notice that you are moving to begin searching for a home. Real estate buying takes more than several weeks, which means that you could very well be searching for the perfect residence more than six months after deciding to buy a home. There is also the issue of pre-approval that takes a few weeks. You should, therefore, begin your home buying process with research that gives you a gauge of how much property costs in your desired area.
2. Determine how much you can afford
You may want to live in the hills, but your budget may place you somewhere in the valley. Determining how much you can afford before pursuing pre-approval for a home loan is the best way to avoid the humiliation of denial. It is ideally a good idea to have your mortgage consume no more than 30 percent of your net monthly income. Those who are especially frugal purchase homes with monthly payments that account for 20 percent of their take-home pay.
3. Get pre-approved for a loan
Home buyers who enter the market with a pre-approval under their belts are ten times more likely to find the home of their dreams and win the bidding war for such residence. Sellers take your pre-approved loan amount as a sign that you are serious about home buying and, hence, may be more obliged to choose you to purchase their property over someone who lacks such undergirding.
You will need proof of income, a good residential history that dates back to at least two years, and an exceptional credit score to get the best interest rates and loan amount. Those with less-than-perfect credit also stand a chance of being pre-approved for home loans, though they may have to work harder to get the best deals.
4. Find a real estate agent
The ideal realtor listens to and understands your needs and wishes. He works tirelessly to ensure that your requirements are met and within your budget. The best real estate agents have a positive track record, but you should not discount new sales professionals who only need a chance to prove their brilliance. Some of the greatest real estate deals have come from new agents who understood the business of haggling for price deals.
5. Start touring homes
Entering the home viewing process under the notion of "the big picture" is the best way to find success. You should be aware of minor problems with the property, but you should not let such issues be the determining factor on whether you purchase the potential home. The surrounding community is also important as living in areas with elevated property crime rates will cause you to pay more for homeowners insurance and overall security.
Deciding to buy your first home is the easiest step in the process. The rest of the affair takes time and diligence. Nevertheless, purchasing your first piece of land is the best decision that you can make.