Purchasing a home as a first-time buyer—or even as a repeat buyer—can seem daunting. One way to help alleviate the process is to organize your finances before embarking on the house hunt. Unsure how to get yours in order? Remember A + B + C + D + E:
Ask + Budget + Check + Differentiate + Estimate
Before you start searching for a home, ask a real estate professional for guidance. He or she will have expertise related not only to your local real estate market, but also how to negotiate a deal in your favor.
Next, set a budget that takes into account your down payment, your anticipated monthly mortgage payment (with interest), and your closing costs. These figures are important considerations in the home-buying process, and if you have any questions, a local mortgage consultant can be a good resource to help you get started.
Prior to house-hunting, check your credit report and score. Your credit is a factor in a lender’s approval decision for your mortgage loan application, as well as your mortgage interest rate. Take steps to correct any errors on your report, or improve your score, if necessary.
Shop around for mortgage lenders to differentiate between loan offerings—a variation in rates or terms can lead to significant savings over the life of your loan. Your real estate professional may recommend a few lenders, but it is ultimately your choice with whom to obtain a mortgage.
Estimate oft-forgotten homeownership-related expenses, such as your monthly homeowners insurance premium, your maintenance costs, your moving expenditures, your property taxes and your utility rates. These can all play a role in your overall affordability.
Completing A, B, C, D and E will not only help prepare you for the home-buying process, but also lay a strong financial foundation for you as a new homeowner. And when you’re ready to apply for a mortgage loan, check out these additional tips to help the application process go smoothly!
Reprinted with permission from RISMedia. ©2016. All rights reserved.
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