Planning Ahead – What to Do Before You Start House Hunting
There’s a lot of planning and preparation that goes into buying a new home. If you’ve been working toward homeownership, and you feel like you’re ready to take the plunge, here are a few things you need to do before you head out house hunting.
Review Your Budget
You can really narrow down your home search if you know ahead of time what price range you will be shopping in. Carefully plan out your monthly budget, leaving wiggle room for entertainment and savings, and determine how much you can afford to spend on your mortgage each month. Use an online mortgage calculator to run through some scenarios of price, loan term, and interest rate to see which homes will fall into your price range.
Get a good feel for how much your mortgage will be at different interest rates so there won’t be any surprises when you meet with a lender. Once you have your bottom line in mind, you’re ready to see which houses are on the market that fit your budget.
Check Your Credit
Rather than waiting for your lender to tell you what your credit report looks like, check it yourself ahead of time. This will let you know where you stand, and help you to identify any errors with your credit report that could cause problems when applying for a mortgage.
If you do find any issues on your credit report, address before you apply for a mortgage. Even a half percentage point difference on your mortgage interest rate can make a big difference over the life of your loan, so you want to make sure your credit is in tip-top shape when applying for a mortgage. Getting the best deal now will save you the time and hassle of having to refinance later.
Get Pre-Approved for a Mortgage
The real estate market is competitive right now, and there are often multiple offers on any given home. What you don’t want is to go out and find that perfect home, only to have it sold out from under you while you wait for your financing to come through.
Getting pre-approved for a mortgage will get you ready to make offers on homes as soon as you’re ready. It will also give you an idea of how much you’ll be approved for. Most real estate agents won’t even accept offers from buyers who are not pre-approved, so this is an essential part of planning ahead for a new home.
With a little care and planning, you can make the house hunting process so much smoother and focus on what you really want: a new place for you and your family.