Are you looking to buy a home from Granbury realtors?
Buying your first home is an exciting achievement and milestone in your life. It’s only natural to be eager to jump right in and find your dream home. But, if you’ve never bought before, it can be a daunting process. It’s easy for your dream to turn into a nightmare in the blink of an eye.
It doesn’t have to be like that though! Keep reading for these 7 things you need to do before you buy any home.
1. Shape Up Credit Scores
One of the first steps Granbury Real Estate recommends is you check your credit score, as lenders do. It’s one of the factors they use (as well as income and current expenses) to work out what payments you can afford.
You want to check at least 6-8 months before you want to buy a home. This will give you enough time to work on your score if it needs improvement. Experian, TransUnion, and Equifax all offer a free report each year, so get one and make sure it’s accurate.
If you find any issues, make sure you call the creditor it’s from. You need to confirm what’s right and make sure they correct that issue right away with the credit bureaus.
2. Reduce Credit Card Debt
Granbury Realty also recommends you reduce your credit card debt if you have any. If you’re one of the few debt-free individuals, keep it that way. If you have credit card debt, then check how it affects your score.
Get your credit card spending under control and work to reduce that debt before buying a home. How you’re managing credit cards makes up a large part of your score. Plan to spend less on your cards, you shouldn’t spend more than you can afford to pay off each month.
You can then pay down that debt over time and lessen the amount. As you do this, it will boost your credit score. It’s also something that lenders will notice, giving you better mortgage rates.
By getting out of credit card debt, you remove one more monthly burden. It’ll make your finances more stable. And it gives you more wiggle room for making comfortable mortgage payments.
3. Get a Saving Plan in Place
You can’t have a buying process budget if you’re not making savings. First, you need to start saving for your downpayment, even if it’s small at first, it’s better than not saving at all.
Work out the percentage you need to put down, the total loan figure you want first. Then, factor in things like moving expenses and estimated closing costs for completing.
Larger down payments mean lower mortgage repayments. This means more money in your pocket at the end of each month. In fact, you could save yourself hundreds of dollars a month. In the long-term, as your loan will be less, you’ll save thousands with reduced interest too.
Make sure you have a solid budget in place. It might seem like you’re missing out and restricting yourself but you’ll be grateful in the end. Keeping out of financial trouble is worth any temporary cuts in spending.
4. Cut Your Monthly Expenditure
When buying a house, you’ll have to make some sacrifices in the short term. The reality is the more payments you have, the less attractive your mortgage offer will be.
Before looking into a mortgage, reduce any of the monthly payments that you can. You still need to pay down your credit card debt though, so don’t stop that.
You want to look at things like car loans or personal loans. Is there a way that you can pay that off early? What about monthly subscriptions that are nice to have, but aren’t a necessity. The less you have to pay out each more, the smoother your first mortgage will go.
5. Balance Your Books
Even if you go for preapproval (see more in point 7), your budget should be the ruling factor. This could be the difference between paying your mortgage with ease and foreclosure.
You need to set a mortgage budget at a figure which allows you to meet all your monthly expenditures with ease. It should have room for leisure, so you can still afford hobbies, traveling and other joys of life.
On top of this, you still need to have enough money to put aside to build up your savings. Purchasing a home comes with responsibilities like home maintenance. Any repairs or insurance, you’ll need to pay for that. You’ll also have pre-sale costs to consider like home inspections.
So, say your preapproval tells you your lender will loan you $250,000. Does that work with your monthly budget or will you struggle to meet those payments? You need to adjust your mortgage to meet your budget, never the other way around or it could end in disaster.
6. Work Out What You Want
While you can look at every single house available, it’s not a good idea to do so. It’s best to narrow down what you’re looking for to help you make clearer, more informed choices. It will also help you understand what you need from a house, and what you simply would like.
Make a list of what your new home should have including:
- Non-negotiable must-have features
- Features you want but can be flexible on
- Preferred floor plans and layouts
- Style of house
- Neighborhood amenities
- Family & personal needs
- Driving distances
This will help you find the right home for you, not only one that’s within budget. there’s nothing worse than being stuck in a home that doesn’t work for your needs but you still have to pay for it.
7. Get Preapproved
Preapproval will be your first official step in getting into your dream home. Getting preapproval tells you how much your lender will let you loan and what price this will cover.
This will be the first solid piece of evidence that will let you know if the house you want is within reach. Or, if you need to revisit what you want/if it’s better to wait a little longer.
When you’re reading to make offers, preapproval puts you in a stronger position. If you have this backup ready, it puts sellers at ease and they’re more likely to accept. Especially if you’ve gone with a trustworthy lender.
Let Your Granbury Realtors Find Your Dream Home
So, there you have it! Now you know what you need to do, you and your Granbury Realtors will be in a better position to find your dream home.
Buying a home is a huge financial commitment, and the best thing you can do is clean up your finances. The stronger your financial position, the better mortgage rates, and terms will be. Going forward, these savings will make your monthly payments much more manageable.
If you’re looking to buy in the Granbury area, contact us today. At Granbury Realty, we’ve got the knowledge and skills to find you your dream home.