You’ve been house hunting for a while. You’ve been attending open houses as if your life depends on it. For the past few weeks, your real estate agent has been hearing from you more than your best friend of 20 years.
But as you’ve been getting closer to finding the right house, you’ve been wondering:
“Is there anything I’m missing in my home search right now?”
“Are there things I should be doing that I’m not?”
If you’ve been asking yourself these questions more often lately, you’re in luck. Here’s our list of things that you need to do before picking up the phone and saying, “I want to buy that house.”.
1. Get a Pre-Approval
When you’re shopping for a new home, it’s not unusual to be asking yourself questions like “Is this a good neighborhood?” and “Could I see myself living here long term?”.
One of the questions that you don’t want to be asking as you tour the master bedroom is “Will the bank finance me if I make an offer on this house?”.
The fact of the matter is that a lot can go wrong when you’re waiting for an approval during your search. It takes time for the underwriting process to work itself out. And sometimes, even when your lender contacts you to let you know it’s a go, you might not be able to secure as much funding as you need.
Getting your mortgage pre-approved allows you to make an offer sooner simply because you’ll know what types of limits you’re working with.
2. Know Your Facts and Figures
Sometimes due to debts or other unexpected expenses, it’s possible to be up in a situation where even though you can technically “afford” a home, you’ll still have to scrape and save to cover your monthly payments.
That’s why it’s important to get your numbers straight before you start looking at houses.
What are the property taxes like? What types of mortgage rates do you see yourself being asked to pay? How much can you comfortably pay each month before “I can afford this no problem.” turns into “I can’t get ahead because of this bill!”?
The key to smoothing the financial transition from homebuyer to homeowner is to sit down and figure out your budgetary limits ahead of time.
3. Pay Down Your Debts and Build up Your Savings
Part of the reason why being cash poor and house rich isn’t considered an ideal situation is because of the toll that being spread too thin can take on your finances.
One way to get your homeownership journey started off on the right foot is to put yourself on better financial footing beforehand. One major advantage of lowering your debt and increasing your savings is that it’s a strategy that allows you to avoid living from paycheck to paycheck.
If you can cover your property taxes, your necessities, and sudden bill surges without problems because of your savings, you’ll be in a strong financial position.
4. Understand Where Your Limits Are
Even though most people would agree that buying a house is what “major purchase” all but refers to in the dictionary, it’s easy for eager homebuyers to bite off more than they can chew.
Sure, it starts off innocently enough. You walk in and you fall in love with the property. But then, suddenly, as more and more concerns start piling up, you’re willing to compromise on everything in order to make the purchase.
The house is further away than you would like for work? “No biggie. I’ll just wake up a little earlier and commute.” The stairs may need some repairs soon? “No worries! We can hire a contractor!” Next thing you know, you’ve purchased a house that’s an undercover fixer-upper and you’ve got way more repairs on your plate than you can handle.
For these reasons and more, it’s often recommended that you have your non-negotiables ready ahead of time. That way you’ll know when to compromise because you love the house and when you’ll need to walk away.
Here’s How You Can Make Buying a Home Easier
Making an offer is a big step in your journey towards becoming a homeowner. Sure, the seller might counter and you may end up having to do some additional negotiating behind the scenes. But if your offer is accepted, or about to be, you’re that much closer to officially owning a house. Using the tips we’ve just provided, however, you can simplify the process in a big way when the time comes.