If you feel like you’re ready to purchase your first home, you may be tempted to load up your phone with real estate apps and start scrolling. But hold that thought… There are a few things you should do first.
1) Check (and Maybe Fix) Your Credit
Before you start browsing your local home listings, take a hard, clear-eyed look at your credit. Pull free credit reports from all three of the major reporting agencies — TransUnion, Experian, and Equifax. If your score could be better, look into ways to help boost it, such as strategic credit card payments, becoming an authorized user on the card of a friend or a relative with good credit, disputing credit report errors, and more.
2) Figure Out the Down Payment
The size of the down payment often determines the kind of mortgage you’ll get and its terms. Typically, down payments range from 3.5% to 20% of the purchase price, though mortgage programs tailored for first-time homebuyers, such as FHA loans, tend to skew toward the lower end of that range. Look into ways to get help with a down payment, such as state programs or gift funds from a family member.
3) Get Mortgage Pre-Approval
You’ll want to know how much you can borrow, and a loan pre-approval can do just that. In the preapproval process, your lender will go over your financial information and provide you a preapproval letter. This is an official document saying how much money you can borrow. The letter tells a seller you’re serious about purchasing a property and it could potentially give you an edge over other potential buyers.
4) Make a Wants, Needs, and Must-Haves List
Start your home shopping with a plan – these three lists can help you nail down exactly what you require in a home. Your Must-Haves list might have a certain number of bedrooms, or proximity to your office, or backyard space. Your Needs list may include a good-sized kitchen and an area with top schools. You can put a swimming pool on your Wants list, but it may be far less determinative in choosing the home that’s right for you.
5) Work with a Reputable Real Estate Agent
You’ll want to interview at least three agents before choosing the agent who has experience in the area in which you want to live and understands exactly what you are looking for. When you find the right home, that agent will be indispensable in helping to negotiate with the seller.
For expert advice on buying your first home or to get the ball rolling on your mortgage pre-approval, you can the Decker Group at First United Bank Mortgage online or by phone at (972) 591-3097.
We love working with first time home buyers and are happy to discuss your scenario and what you may be able to qualify for in your exciting new purchase!