Homeownership is the number one way for Americans to build wealth. On the other hand, renting creates no equity and subjects tenants to an inexorable rent cost climb. Before looking for a home, it's essential to plan. Six months before starting a home search, check your credit report. Correct any errors and see if you can do anything to improve your score, such as paying off a credit card.
Also, avoid financing big purchases or increasing the balances on your credit cards. As the homebuying season approaches, create a homebuying checklist. This checklist will save time, define a realistic price range and help you find the perfect home.
Here are some critical checklist items:
Set a budget
Many homebuyers become emotionally attached to a home only to discover they can't afford it. Falling in love with a home that you can't afford wastes time and makes the experience unpleasant, causing them to start again from square one. To avoid this, define a budget based on your current income, then use a mortgage loan calculator to determine the price range that fits.
Remember that the mortgage isn't the only cost of ownership. Be sure your estimate factors in other expenses, such as:
· Utilities.
· Insurance.
· Property taxes.
· Mortgage insurance.
· Closing costs.
· HOA dues, if applicable.
Get pre-approved for a home mortgage Never home shop without a mortgage pre-approval. The pre-approval shows the seller you are serious, which gives you leverage in negotiations. It also defines the maximum price you can consider.
Keep in mind that just because a bank approves you for a maximum amount doesn't mean you can really afford it. You have to look at your own budget, spending habits and upcoming potential expenses that the bank has no way of knowing. For example, if you plan to have children and will need daycare, will the increased costs of child-rearing put you in the red?
Hire an engaged real estate professional
the Wood Team at HomeTown Lenders can help you find a great real estate agent in Montana, you can be assured of working with an experienced agent who understands the nuances of the
neighborhood and municipality you are considering. Real estate is very local, so you want someone who's plugged into the community.
Define what you're looking for in a home
List what's important, including items such as:
· Walkability.
· A garage.
· The school system.
· An extra bedroom.
· A basement.
· A yard.
· A pool.
A column for wants and a column for needs work best.
Take your time
The homebuying process takes time and effort, but it's always worthwhile to find the right house. Shopping online, visiting open houses and reviewing suggestions from your real estate agent should all be part of your checklist.
Buying a home can feel overwhelming at times. Many homebuyers find that getting advice from family members and friends helps them gain different perspectives and identify issues that they might encounter. Organizing important steps in a checklist helps you stay organized and focused on finding your dream home.
Don't hesitate to reach out the The Wood Team to help navigate any questions or confustion you might have when looking to buy a new home. Call us today