So you want to buy a home.
Congratulations, and welcome to what is likely to be the biggest purchase of your life! Here are 5 action steps to start you on the process:
1. Meet with more than one local lender
Banks/Credit Unions/ Mortgage Brokers will ask for paperwork and look over your financial state of affairs to give you a better idea of what you can realistically borrow on a home. Think local, and be sure to price shop, as there will be different options on the type of loan, interest rates, services and closing costs. A great lender should give you a spread of calculations to show you what a monthly payment would look like when adding up the mortgage, interest, private mortgage insurance (PMI), taxes, etc. In a competitive market, you need to have a Pre-Approval Letter from at least one lender.
2. Avoid large purchases leading up to home buying
Want that new car or boat? Vacation to New Zealand? It needs to wait. Big purchases will affect your debt to income ratio as well as credit score.
3. Create a home buying wish list
Once you have an idea of the price range which fits your income and lifestyle, create a list of ‘Must Haves,’ ‘Would Like’ and ‘No Thanks.’ Having this list will help you save time and effort.
Must have: Sunny, open concept, quiet street, within 15 miles of work.
Would like: Contemporary style, hardwood floors
No thanks: House more than 100 years old, corner lot, only 1 bathroom
4. Find a great Buyer’s Agent
This is where I come in.
Did you know that without a signed buyer agency contract, all realtors showing you homes are actually working for the seller? A buyer’s agent works for you. This includes all things pertaining to your goal of home ownership: locating and showing you properties that fit your wish list, providing current market information, writing an offer and negotiating on your behalf, organizing inspection, communicating with your lender, list agent, and the title company.
In almost all transactions the buyers agent is paid in the transaction via the seller, not you.
Read more about the reasons why you should use a buyers agent.
5. Self Care
(Yes, this really is an action step)
Buying a home can at times be a stressful endeavor. The exciting opportunity to purchase real estate comes hand in hand with a range of emotions, and a small degree of unknowns. A walk in nature, coffee with a friend, any type of down time which helps you make decisions in a more grounded, calm state will benefit a successful transaction. Let your Realtor handle the stressful part and step back at times to be you and enjoy the present moment.